Some Real Estate Course

7/31/2019 Some Real Estate Course

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Chapter 1 Preface

Chapter 2 Background

Chapter 3 Introduction

Chapter 4 The Process

Chapter 5 The Paperwork

Chapter 6 Expanding Your Career

Chapter 7 Resources

No part of this publication may be reproduced or transmitted in any form orby any means, electronic or mechanical, including photocopy, recording, orany information storage and retrieval system, without permission in writingfrom the publisher.

This publication is designed to provide accurate and authoritative information in regard to the subjectmatter covered. It is sold with the understanding that neither the author nor the publisher arerendering legal, accounting, or other professional service. If legal or other expert assistance is required,

the services of a competent professional person should be sought.

From a declaration of principles jointly adopted by a committee of the American Bar Association andcommittee of the Publishers Association.


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Welcome and congratulations on embarking on a potentially live-

changing career. I say this because to accurately employ an opportunity,any opportunity, in your life you must create a mindset of importance.

My guess is if you purchased this book, you are looking for a way to

change the manner in which money comes into your possession: an

income. To secure an income, a strategy is developed, and then

employed. For 90% of the population this strategy is a familiar course of

getting a school education and obtaining a job for a predetermined wage.

Or, some choose to embark on their own and create a small business

(including doctors and lawyers practices). The latter has potential for

greater earnings, yet with that potential comes exponential effort, time,

and responsibility.

The idea behind Profit Real Estate Speculation System (P.R.E.S.S.) is to cut

out these two hindrances to enjoying life: time consumption and

predetermined wages. Discovering this technique was testament to

persistence, and even desperation. I have tried every conceivable self-

employment tactic available over the last fifteen years, from vending

machines to independent consultant to real estate to investing . . . yes,even gambling strategies. Why? Because there is a way to make substantial

amounts of money. Even though the other paths Ive tried canafford a

comfortable lifestyle, the discrepancy is that almost all of them are still

labor intensive, or they require a bit too much reliance on uncontrollable


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events for you to profit effectively. Furthermore, a lot of the methods I

have research over this time contain enormous amounts of fluff that

leave you gasping for answers. You know, filler to make the product

appear effective.

This will not be the case with this system. View P.R.E.S.S. as a board game

that you take out of your closet to play in one evening. Of course you

will not complete the system in one evening, as it is a continuous and

ongoing activity. Instead it will be clear and concise. My connection to a

board game is that you are given instructions how to use it and the game

pieces, all you need to do is make it go. Matter of fact, you are just about

through the longest part of the editorial: the Preface.

In this book you will be given the tools in which to employ in a specific

manner: the instructions and forms. All you need is to do it. It will nottake a lot of time or investigation, as the method is complete in and of

itself. Simply put it to use. If you desire to expand upon it or complicate it

down the road, thats fine, and can lead to greater returns, but for now

just utilize your time as indicated in the book.

I wish you the greatest fortune in the future!


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P.R.E.S.S. was developed combining the best parts of both the

stock/commodity markets and the real estate investment market. By

definition, an option to by anything is the right but not the obligation to

buy something of value at a predetermined price. In Stocks and

Commodities (futures), this means that you buy an option to purchase

(or sell) the underlying stock or commodity contract if you decide to

exercise the option. An investor can opt (exercise) to purchase theunderlying item if it becomes profitable to do so. This is usually the case

when the price rises beyond value of the exercising of the option (strike

price). After it is exercised, the investor would resell the item at a profit.

This is as far as I am going to go into this, as you can investigate on your

own if you would like to explore this avenue. The unattractive part to

stock and commodity option trading, in my opinion, is that an investor

relies heavily on external factors controlling the price of the underlying

value. I prefer more control of the investment. By the way, in option

investing you have the right to notexercise the option, if the scenario is

not favorable. You can do this by simply allowing the option to expire.

This is done by simply not doing anything, since purchase options are

almost always written for a specific length of time, say 30 to 90 days.

Options themselves can also be bought and sold.


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Real Estate options to purchase are similar in the way you lock in a price,

set for a specified length of time, and are assignable (can be given or sold

to another individual). The manner in which they differ from Stock and

Commodities is that individual property agreements are not traded on anexchange, can be arranged by anyone, and do not rely on reaching the

predetermined price to become profitable. Real Estate options typically

come in two fashions: Option to Purchase and Lease with the Option to

Purchase. The type that P.R.E.S.S. focuses on is the straight Option to

Purchase variety. This limits the involvement of effort, in order to get in

and out quickly. There are many books available on the subject of deeper

involvement of Real Estate investing, a couple of the better ones I list at

the end if you are interested in gaining further information. I am going

to limit the discussion in this book to the simple process of making

money off the writing and selling of the Option to Purchase contracts

alone. This is the heart and soul of the system.

In combining the strategies of stock/commodity options and the control

of real estate options, the investing procedure takes on a unique ability to

produce easier and quicker results. Although higher returns might be

attained by using other forms of Real Estate options or indulging in

Stocks and Commodities, my personal interest has always leaned toward

the surer thing. Simply put, recall the tale of the tortoise and the hare.


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The main point that you have to keep in the forefront of your mind as

we move forward through the process is this:

Here are a few things you need to remember:

1. A Speculator is someone who has there own money at stake;

therefore a real estate license is not necessarily needed. (by the way,

if you got into Lease With Option to Buy, this would be considered

hedging)

2. You will not be closing on any of the real estate purchases using

P.R.E.S.S.

3. The process is meant to work as an easy-in/quick-out system.

4. This will not take a great deal of your own money to get started.

P.R.E.S.S. can be a very lucrative career. By stating this, I want you to view

your endeavors as ongoing events, one deal at a time. In time the

opportunity will present itself with the ability to have multiple deals on

the books running at the same time. This is, in essence, leveraging your

efforts: making more available to you in the same amount of time.

Utilizing this system is just a series of events that I will spell out fully.

Following the instructions, I have included a graphic flow chart to display


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the normal course of events in completing a typical deal. The paperwork

that I suggest you use is included in chapter five, with explanations.

Finally, treat P.R.E.S.S. as a business! The major problem with acquiring anopportunity that is easy to get into is that it is also easy to drop out of.

Stick with it!

You will notice a little symbol followedby a narrative, inserted at times in thisbook. These are my success strategiesinserted for your benefit. They are to giveyou points to remember as you work theprocess.


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Profit Real Estate Speculation System is a considerably easy formula to

employ and to make money from in comparison to other Real Estate

objectives. You will be doing two main activities, in which all other action

will revolve:

1. Writing an Option to Purchase on individual real estate.

2. Selling these options to other individuals.

The first thing you need to do is find the right properties to contract an

option against. Because your money is at stake, a little research goes a

long way. There are two prime, but not

exclusive, means for initiating your

search:

1. Real Estate Agents

2. Classified Ads (For Sale by Owner)

You will be looking for property offered

by motivated sellers. A motivated seller is

someone who, for whatever reason, is

extremely concerned with selling their real estate as soon as possible. To

start with, you want direct your attention to real estate with the most

potential (see box above). This will confine your valuable time to

properties that are worth considering. When you take the next step of

inquiringthat is to say visiting the real stateon the property, by

Residential property

Path of Progress

Offered/Listing six months or

longer (180 days+)

Motivated sellers (e.g., moving,

foreclosure pending, lifestyle

change, financial trouble, etc.)


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asking specific questions (see box below) you can quickly ascertain if the

seller is motivated to sell, or strictly feeling out the market. You can get a

lot of the initial questions answered by and MLS listing sheet or from

agents.

Developing your

particular niche to

cater to will assist

you in generating a momentum

of operation. For example,

operating in a retirement-

geared area, I option houses

and advertise them to retirees

in big cities, to move to a less-

costly more relaxing

community, conducive to their

lifestyle change.

How long have you owned the property? How long has the property been on the

market? What was your intial asking price?

What is the citys valuation of the house? Why are you selling? What do you like most about your

home? What do you like least?

These are just a few of the most importantquestions. Dont be reluctant to add to them,but be cautious of inundating the sellers. Youdont want to put them on edge.

The next step is to visit the properties to get a feel for the condition of

the real estate, location, neighborhood, and general appeal. Document

any remarks for consideration. Remember,

you will always want to have projects in the works while you have existingoptions on the books. This ensures that you will not have any lag-time

between deals.


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Step three, writing buyers offers. This is the easy-in portion of your

business. When you have narrowed your search to about three properties,

although you may compete for as many as you are comfortable with, it is

time to set the stage. You want to create (write) the Option to Purchaseagreement. If you are using an intermediary, you can utilize this agent as

the path of communication. The form included in the next chapter is an

easy fill-in application to write your option offer. Pass along your

completed Option to Purchase offer to the seller, or sellers agent,

completed, signed, and witnessed. The Option to Purchase is accompanied

by an earnest money down payment (premium) to purchase the

option. This is your investment in the project. This is a non-refundable

(and, strictly your maximum risk) deposit that allows you to have a

vested stake in the property. Without this, you would be considered

brokering the deal, which requires licensing in most areas. In most

situations you can offer $100 in earnest money to secure the option.

Real Estate brokers/agents are required by law to convey all

offers to sellers, reasonable or not. DO NOT be afraid to

assert this fact if they hesitate.

This effort may take some doing. Not all, or many, sellers may be

interested or be aware of the potential benefits to locking in a sales price.

The effort of building the value in agreeing to your offer greatly increases

your chances of success. For this reason, it is of the utmost importance to


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focus your time and energy on motivated sellers, with properties that

they are anxious to sell.

How do you set your offer price? You discount the current listing price by10%. If negotiations ensue, I wouldnt waiver on this price too much, as

your approach should be centered around building the value in your

proposal (e.g., a property listed at $150,000, you will offer $135,000).

Building value in your proposal is not such a major feat when

negotiating such points as: securing a fixed price (seller does

not have to worry about the market reflecting a lower price

reflecting greater loss to sellers profit); a limited time-frame; seller keeps

the earnest money if you decide not to exercise (purchase the property);

and, if another serious buyer comes along the seller can purchase the

option back from you and still sell at a gainknowing that the other buyer

has to compete with your offer.

Once you have secured the Option to Buy, it is time to take your

operation to the next level: finding buyers.

This is the quick-out step in the process! Remember, without securing a

potential buyer of the real estate, your earnest money (investment) is awaste. This can be the most testing portion of the process, as it is never

comforting to have a deal fall through due to lack of closure. At this

point you must remember that to make money it ALWAYS involves

sticking your neck out a bit. Fortunately, you are staking a minimal


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investment. Keep in mind, too, that you will be involved with your

learning curve as to begin. Growth in experience will always take some

lumps along the way, but I trust that you would never gamble with

money that you cant afford to lose. Hence, dont invest the rent money!

This step is where you enter the marketing phase of your project. Pick a

target area in which you can market the position you hold with the

option, and be available via telephone and Email to take all inquiries.

Place all of the relevant information in and ad, most of which you can get

from an MLS listing including photo. A classified ad need only be a few

lines in which interested parties can contact you (see examples in the

Paperwork chapter)

Convincing someone to purchase your option is actually a lot easier than

the sellers position of trying to sell the entire real estate. Why? Becausewhen you assign (transfer ownership of) the option itself to the potential

buyer, they then have the option to purchase or not. This is where you

want to build value in the buyers mind of what a discount they are

receiving: attraction of locale, location of property in locale, locked-in

discount of property priced under published value, plus any other benefits

you can create. They almost always will want to visit the property before

agreeing to purchase your option. Embrace this, as it is a definite sign of

progress. By the way, the potential buyers pay their travel and lodging

expenses, unless you have the means and profitable stance to incur such


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an expense. Having them visit with the agent that you astonished with the

existing arrangements you secured will extremely help seal the deal.

How do you price the sale of your option? Very simple . . . you mark upthe difference of your purchase margin by 30%. Your offer price for the

assignment of the option is a bit more flexible than the discount you

offer the property owner. This is because your profit is not affected

greatly by giving in a little to the price of the option, as it is with the

underlying purchase option discount. Here is an example to help you

visualize my point:

Listing Price $350,00010% Discount -$35,000Option Offer $315,000

Option Resell Price $10,50030%


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The final step in completing the entire transaction is assigning your

Option to Purchase to the buyer. This is transacted by using an

Assignment of Purchase Option (included in the next chapter).

The seller pays agents fees from the selling price of the

property. Closing costs (negotiable) are paid also by either the

seller or final purchaser. These items will not concern you.

After all this is completed, a CLEAN transaction has transpired. What I

mean by this is that you have none of the corresponding costs associated

with the actual purchase, everyone made out, and most of all you do not

have to handle the property: reselling or leasing!

A word on Escrow: Escrow is a third-party agent that holds

equity for distribution on the fulfillment of certain instructions.

Although it is not a requirement to process your contracts in

this manner, it may make the seller more comfortable, and thus bringing

your deal to terms. Understand that instituting an escrow account entails

certain fees and obligations. Research this step.

Having your agreements witnessed is strongly recommendedin the case of a future discrepancy. Remember get everything

on paper. Any individual reluctant to put things in writing is

probably not someone you wish to do business with anyway.


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Notary Public witnessing is not a requirement in all situations,

but they offer the most solid proof of evidence should

questions of legitimacy develop. Their fees are not generally

expensive, thus making this an attractive form of insurance against

problems if they occur. Remember that if you do decide to use their

services that you must not sign your papers until in their presence.

Yes

Start

No

No

Yes

Search the locality forhouses for sale --Utilize real estate agents asneeded --Keep aware of newopportunities of motivatedsellers --

Visit houses ofpotential

opportunity

Make

OptionOffer(Accepted?)

Advertise house& speak with

prospects

Show property

Receiveoffer

(assign?)

Continued Activity


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The following forms are the pieces that you will fill in along the way

during the deal. Most of them are pretty self explanatory, but for your

benefit remember to only sign the Option to Purchase and Assignment

of Option to Purchase contracts, at the appropriate times, in the presence

of a witness. It is a good safety measure to place the closing date no

sooner than 30 days after the expiration date of the option term.

Although these contracts are pretty standard, professional legal adviceshould be sought to review standards and laws in your area, and for

proper use of the forms.

You have full permission to duplicate and use this portion of the book for

the purposes of employing this system only.

1. Option Agreement for Purchase of Real Property

(use this form to obtain the option on the property)

2. Assignment of Option to Purchase Real Estate

(use this form to transfer the option to the buyer you located)


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After these contracts, you will find some examples of classified

advertisements that you may reproduce to solicit the interest of qualified

buyers.

There is a distinct difference between a buyer that is qualifiedto purchase a home with approved financing, and a qualifiedbuyer that wishes to lock-in at a particular price. Although,they are usually one in the same, your only concern is tounload your purchase option position.


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OPTION AGREEMENT FOR PURCHASE OF REAL PROPERTY

THIS OPTION AGREEMENT ("Agreement") made and entered into thisday of , 20 , by and between ,whose principal address is ,hereinafter referred to as "Seller" and ,whose principal address is ,

hereinafter referred to as "Purchaser":

W I T N E S S E T H:

WHEREAS, Seller is the simple owner of certain real property being, lying and situated inthe County of , State of , such real property having thestreet address of ("Premises") and such propertybeing more particularly described as follows (Insert Legal Description):

and,

WHEREAS, Purchaser desires to procure an option to purchase the Premises upon theterms and provisions as hereinafter set forth;

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency ofwhich is hereby acknowledged by the parties hereto and for the mutual covenants containedherein, Seller and Purchaser hereby agree as follows:

1. DEFINITIONS. For the purposes of this Agreement, the following terms shall have thefollowing meanings:

(a) "Execution Date" shall mean the day upon which the last party to this Agreementshall duly execute this Agreement;

(b) "Option Fee" shall mean the total sum of a down payment of $ , in earnest,payable as set forth below;

(c) "Option Term" shall mean that period of time commencing on the Execution Date andending on or before , 20 ;

(d) "Option Exercise Date" shall mean that date, within the Option Term, upon which thePurchaser shall send its written notice to Seller exercising its Option to Purchase;

(e) "Closing Date" shall mean the last day of the closing term or such other date during

the closing term selected by Purchaser.

2. GRANT OF OPTION. For and in consideration of the Option Fee payable to Seller asset forth herein, Seller does hereby grant to Purchaser the exclusive right and Option ("Option")to purchase the premises upon the terms and conditions as set forth herein.

3. PAYMENT OF OPTION FEE. Purchaser agrees to pay the Seller a down payment of$ , in earnest, upon the Execution Date.


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4. EXERCISE OF OPTION. Purchaser may exercise its exclusive right to purchase thePremises pursuant to the Option, at any time during the Option Term, by giving written noticethereof to Seller. As provided for above, the date of sending of said notice shall be the OptionExercise Date. In the event the Purchaser does not exercise its exclusive right to purchase thePremises granted by the Option during the Option Term, Seller shall be entitled to retain theOption Fee, and this agreement shall become absolutely null and void and neither party heretoshall have any other liability, obligation or duty hereinunder or pursuant to this Agreement.

5. CONTRACT FOR PURCHASE & SALE OF REAL PROPERTY. In the event that thePurchaser exercises its exclusive Option as provided for in the preceding paragraph, Selleragrees to sell and Purchaser agrees to buy the Premises and both parties agree to execute acontract for such purchase and sale of the Premises in accordance with the following terms andconditions:

(a) Purchase Price. The purchase price for the Premises shall be the sum of($ ); however, Purchaser shall receive a credit toward such

purchase price in the amount of the Option Fee thus, Purchaser shall pay to Seller at closing thesum of ($ );

(b) Closing Date. The closing date shall be on , 20 or at

any other date during the Option Term as may be selected by Purchaser;

(c) Closing Costs. Purchaser's and Seller's costs of closing the Contract shall be borneby Purchaser;

(d) Default by Purchaser; Remedies of Seller. In the event Purchaser, after exercise ofthe Option, fails to proceed with the closing of the purchase of the Premises pursuant to the termsand provisions as contained herein and/or under the Contract, Seller shall be entitled to retain theOption Fee as liquidated damages and shall have no further recourse against Purchaser;

(e) Default by Seller; Remedies of Purchaser. In the event Seller fails to close the sale ofthe Premises pursuant to the terms and provisions of this Agreement and/or under the Contract,

Purchaser shall be entitled to either sue for specific performance of the real estate purchase andsale contract or terminate such Contract and sue for money damages.

6. MISCELLANEOUS.

(a) Execution by Both Parties. This Agreement shall not become effective and bindinguntil fully executed by both Purchaser and Seller.

(b) Notice. All notices, demands and/or consents provided for in this Agreement shall bein writing and shall be delivered to the parties hereto by hand or by United States Mail withpostage pre-paid. Such notices shall be deemed to have been served on the date mailed,postage pre-paid. All such notices and communications shall be addressed to the Seller at

and to Purchaser at or at

such other address as either may specify to the other in writing.

(c) Fee Governing Law. This Agreement shall be governed by and construed inaccordance with the laws of the State of .

(d) Successors and Assigns. This Agreement shall apply to, inure to the benefit of and bebinding upon and enforceable against the parties hereto and their respective heirs, successors,and or assigns, to the extent as if specified at length throughout this Agreement.

(e) Time. Time is of the essence of this Agreement.


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(f) Headings. The headings inserted at the beginning of each paragraph and/orsubparagraph is for convenience of reference only and shall not limit or otherwise affect or beused in the construction of any terms or provisions hereof.

(g) Cost of this Agreement. Any cost and/or fees incurred by the Purchaser or Seller inexecuting this Agreement shall be borne by the respective party incurring such cost and/or fee.

(h) Entire Agreement. This Agreement contains all of the terms, promises, covenants,conditions and representations made or entered into by or between Seller and Purchaser andsupersedes all prior discussions and agreements whether written or oral between Seller andPurchaser with respect to the Option and all other matters contained herein and constitutes thesole and entire agreement between Seller and Purchaser with respect thereto. This Agreementmay not be modified or amended unless such amendment is set forth in writing and executed byboth Seller and Purchaser with the formalities hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executedunder proper authority:

As to Purchaser this day of , 20 .

"Purchaser" Witnesses:

As to Seller this day of , 20 .

"Seller" Witnesses:


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ASSIGNMENT OF OPTION TO PURCHASE REAL ESTATE

For value received, , of , assignor,assigns to , of , assignee, allrights and interest of assignor in an agreement, dated this day of , 20 ,hereby assignor was given the option to purchase from , of

, the following described real estate ata price and under the terms and conditions therein contained (Insert Legal Description):

Such option commenced on , 20 , and is good untilo'clock, .m., , 20 .

Assignor, by virtue of this assignment, grants to assignee the right to exercise or rejectthe option in good faith and the right to recover any moneys deposited by assignor to receive saidoption.

Dated , 20 .

Assignor Signature:

STATE OF

COUNTY OF

BEFORE ME, the undersigned authority, on this day of ,20 , personally appeared to me well known to be theperson described in and who signed the Foregoing, and acknowledged to me that he executedthe same freely and voluntarily for the uses and purposes therein expressed.

WITNESS my hand and official seal the date aforesaid.

NOTARY PUBLIC

My Commission Expires:


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House For Sale at

discount off naturalvalue. 123-456-7890

House For Sale.

Retire in Comfort, atdiscount, and bankthe rest. 123-456-7890

Buy This House.

Offering my interestin an undervaluedhouse.123-456-7890

Own More, PayLess. This housegives you morecomfort at a fractionof your currenthouse. 123-456-7890

These are just a sample of ads that can work. Get creative, and be enticing,but keep it short. You dont need to spend a lot of money. The main

point here is to get the phone call or Email.


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This is simply a starting point for you. Get creative and develop new

avenues for profits as you grow in skill and bank account. After you have

made money in a safer fashion, that is to say, using the technique covered

in this book, consider expanding you career by augmenting some of the

following methods. This is not to say that you should discontinue using

P.R.E.S.S., but simply adding to your line of work as you get more

confident. Your confidence will certainly be enhanced by the

accumulation of funds as you progress in real estate investing. These are

only a few combinations of ideas. Do not feel limited to these alone.

Option to Purchase exercise the option and resell the property in

full value.

Option on Spec option to be built houses in development

projects. Use P.R.E.S.S. to make an equitable gain.

Yank the Land as made famous by A.D. Kessler. This is creative

real estate at its best! Buy his book to get the full idea. Simply put,

Sell the house on the land and lease the land back to the owner.


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A FORTUNE AT YOUR FEET (ISBN 096745760-2)

A.D. Kessler, Fortune House Publishers (800-678-1223)

NOTHING DOWN FOR THE 2000s (ISBN 0743261550)

Robert G. Allen, Free Press

New York Times 800-238-4637

Los Angeles Times 800-528-4637

Chicago Tribune 800-874-2863

Take notice of where new businesses are locating

(especially retail), where house prices are on the rise; the condition of

properties and new construction (location, location, location!)

What are some outstanding attributes of your community (or

target community) that you can capitalize on? To whom would those

things be attractive, to attract their interest in relocating?


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Locate your advertisements in spots where your target

audience (buyers) will be most likely find them:

Yahoo! Real estate section is an effective online source.

Newspaper classified section. Heavily circulated publications are

certainly preferred.

Ebay is expensive, but has a broad reach and brand recognition.

Be honest in all endeavors and practice open disclosure of

known facts, and your reputation will precede you!

Help enough people get what they want, and you will get what you want.

Zig Ziglar

Keep Busy.

Harland Stonecipher

Some Real Estate Course

Documents

Transcript of Some Real Estate Course