About the time I had done this, my neighbor introduced me to a company called Nouveau Riche.(If you want to get really smart in real estate really fast, contact me and I can help you sign up for it. 208-589-5599 Burke Bennett)
I signed up at the time because I wanted to learn how to do short sales since I didn't understand them at the time.
When I went to college down in Arizona, I took 6 days worth of classes.
I had been a realtor for over 6 years, but learned so much that it was like drinking from a fire hose.
I took a class from a guy named Chris Wilson. I was impressed that he had over 150 lease option homes.
One of the things he would do is buy his homes at a discount. He would make them put $10,000 the first year, and $5000 the second year. This $15,000 was option money. The soonest the renters could exercise the option was after they put the $5000 down in the second year, but they had up to 24 months to buy the home.
He would have them fill out a renter's agreement, and have a separate option agreement.
Renters were responsible for all maintenance, utilities, and repairs.
He then would pick a price in the future of what the home might be worth.
If the renter didn't buy the home, he kept their $15,000, plus all the rent, plus any appreciation of the home he might have enjoyed, not to mention all the tax write-offs.
If they bought the home, he would 1031 his gain into two more homes and never have to pay taxes on the proceeds.
I liked what he was doing and thought, "I could be the Chris Wilson of SE Idaho," but I knew it wouldn't fly in SE Idaho, so I made some adjustments.
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