"How can you "sell" real estate if you don't own ( buy) it first? "

The question that comes up often at www.CashFlowDepot.com is "How can you "sell" real estate if you don't own ( buy) it first? "

Let me explain.

Think about this... when you BUY real estate you have to make monthly payments, pay interest
and principal, pay taxes and insurance, and pay the cost of upkeep.

There are benefits of buying real estate. You can rent it out and collect monthly cash flow. You
can sell with seller financing that wraps your underlying loan and get cash flow. If you buy right,
you can resell to make a nice profit.

At some point, the house will be paid for but even then you'll make payments every year to the
government for taxes. If you don't pay, you'll lose the house. So, in reality, you never really own
a house free and clear. Don't forget to add insurance to the costs too.

There are benefits to ownership as you can see, but there are risks and liabilities too.

If your real estate is rented or sold with seller financing and the tenant/buyer tears it up, then, as
the owner, you get the privilege of fixing it up (AGAIN) so it can be rented out or sold again. This
is usually a $5,000 - $10,000 expense.... Minimum.

If a someone gets hurt while at your property, you run the risk of a lawsuit.

I know an investor who rehabbed a house and two years later the buyer sued claiming it had foundation problems. The buyer's lender got a house inspection and foundation engineer report before they bought which said the house was in great condition. But the buyers still sued for $25,000 plus legal fees.

Just because you're right and just because you always do the right thing, it does not mean you won't get caught up in a lawsuit if you are the owner. The legal fees to get out of a frivolous lawsuit are always expensive... not to mention time consuming.

So, the question is how can you have all the benefits of ownership, like cash flow and profits and
appreciation ( equity), without the risks of ownership?

The simple answer ..... OPTIONS!

With options, you can have the advantages of owning real estate without actually buying.

With options, you can control real estate at a below market price then sell it for more to make
a nice profit.

With options, you can control future equity and appreciation.

And when you combine an option with a lease, you can get great cash flow for many years too.

What is a real estate option?

A real estate option gives you 'control' of a piece of real estate without buying it! By having an
option, you have the exclusive right to buy that property, or NOT buy. The choice (option) is yours.

It is an exclusive right. That means that NO ONE ELSE can buy or sell that particular property during the duration of our option. It can be a lot, a house, an apartment building, a mobile home, a warehouse, a farm, etc..

During your option period, the owner keeps paying all of the inherent costs of the property... mortgage payments, taxes, insurance, upkeep & maintenance.

During the option period you can sell the house. You are entitled to any monies received (profit) over your option strike price.

No one.. not even the owner or the property.. can 'buy' or 'sell' that property legally without first satisfying your option.

If the owner wanted to sell to someone else, they would have to pay you to release your option.

When you use an option, you are not buying real estate, you are buying the exclusive right to buy ( or not buy) that property. That means you also have the exclusive right to sell the property.

Using an option, you also have another advantage...

Instead of selling the real estate, you can sell your option for a quick profit. By doing so, you are selling your exclusive right to someone else and making a quick profit for yourself.

You can see why options were Jack Miller's favorite strategy!

In the coming weeks, I'll have many real examples of option deals. With today's uncertain economy, you'll soon see why OPTIONS are perhaps a better alternative than owning real estate.