Sometimes you can't see the forest for the trees and so maybe your approach in real estate needs some “outside the box” thinking. Have You Ever:
- Not made an offer because you didn't know the total repairs needed on the property.
- Just didn't feel comfortable with your knowledge of property values to make an offer.
- Didn't know 100% for sure if you could close on the deal if your offer is accepted.
What this all means is TRULY we're only limited by our imagination in creative real estate. So, if you fit any of the above listed items take a more open approach with OPTIONS! Now, Options are not anything new creative real estate but they may be on the way you should be using them. One thing I have learned and that was impounded in my head through the school of hard knocks is now my one motto:
on This Deal if My Offer is Accepted?”
If the answer to the above posed question is “no” then I either don't do the deal or change my offer. I only want deals that are no-brainer and can't lose. In fact I would rather do one great deal, versus ten marginal deals if my “worst-case” scenario would have a possibility of happening.
Makes Thousands With This One Magic Sentence
So, here we are and to my entire point and teaching that is absolutely necessary for you – I feel – to become a truly successful creative real estate investor. You definitely MUST use Options when they are needed to minimize your risk and those dreaded “worst- case” scenarios that eventually happen to us all.
There is one sentence you can use in your contract that can turn in ordinary “Offer To Purchase” into a straight option minimizing your risk:
If I feel a deal is marginal at best but still think there may be a possible opportunity then I will use my Option clause on any offer I make. For example, I may be concerned about the length of time it will take me to find a qualified tenant/buyer or if there is enough equity in the property to wholesale it.
In fact for all those wholesaling properties I feel this is an absolute must clause that you must utilize. If am of firm belief that wholesaling using total Options is critical. Many of those wholesaling properties simply are cash strapped which means you really have to utilize Options just like I have outlined here for you since you aren't in a strong financial position to buy/hold properties.
I'm simply NOT going to get stuck with a deal that doesn't lead me to profits and cashflow income –and neither should you! If the deal doesn't make total financial sense minimizing your risks, then put a total limit on your risk with a straight Option on your offer. Now, don't let your fear and even lack of knowledge limit your ability to make significant wealth in real estate. Good hunting as luck has absolutely nothing to do with it!