March 22, 2004 at 5:07 pm #38
If I’m gonna use a NEO to gain an option on a property that I intend to flip to a mortgage money buyer using a Simple Land Trust, do I need to fill out all the sections on the NEO or are there some sections I am not going to need to use?March 22, 2004 at 8:31 pm #6983
I use the NEO all the time.
Case in point:
Seller owed $85,000 and would take $90,000. ?My comps came in at $115,000. ?I already had a buyer that was pre-approved for 100% up to $105,000. ?The house was a fit and we did the deal.
In my NEO I agreed to acquire an interest equal to the $15,000 difference.
In fact I will see if I can put a copy of my original NEO in the new ebook since the property did come from a lender.
I had the seller pay for the trust setup of $295. ?He named me a beneficiary with an interest equal to $15,000 and also named me the Trustee. ?WE (as beneficiaries) drafted a letter of direction to the Trustee that instructed guess who to sell the property and distribute the proceeds.
Loan Payoff: ?$85,000
Seller: ? ? ? ?March 22, 2004 at 11:01 pm #6984
C’mon guys, ?let’s be honest here,.
The NEO is basically a gimmick, a trick a ruse, a ding-dong whatzit, a yumboqeek…a form designed ?for you to get some breathing time during which to avoid paying an option fee, and to give you time enough to find someone with cash and/or credit before you have to make a iron-clad purchase decision.
The NEO is no different that any option to purchase, other than that it leaves the property on the market unless you decide it shouldn?t be; and it requires a cancellation notice and avoids an option fee…and gives you a good way to avoid commitment until you know you’re not going to have to bomb the deal and get sued for non-performance when you lack a buyer with the loot you need.
Don’t take the NEO too seriously. ?Its just a little insurance policy. ?If an ordinary option is is accepted without an option fee, then you don?t need the NEO.
BillMarch 23, 2004 at 6:48 pm #6985
Are we talking Matrix NEO or something else?March 23, 2004 at 6:59 pm #6986
NEO = Non-Exclusive OptionMarch 23, 2004 at 9:17 pm #6987
I keep sending emails to you and they keep coming back whazzz up??
BillMarch 24, 2004 at 11:24 pm #6988
Loan Payoff: ?$85,000
Seller: ? ? ? ? ??$ ?5,000
Me/My LLC: ? ?$15,000
All this is done in the regular closing and the Title Company makes out all the checks so I don’t have too. As the Trustee I also made a hundred bucks.
It is very easy when you disclose to the seller how much you are making and he is okay with it. However, I came across number of situations when the seller is not fine with an investor making 15K when he receives only $5k. Would you still use a Land Trust if you do not want to disclose how much you are making? If yes, what would the instructions say?
AleksMarch 25, 2004 at 12:53 pm #6989
I never use anything else.
I don’t understand, if you are giving the owner what he wants (full-price), then why is he concerned about how much you’ll make?
It’s all in the negotiation.
I know some Network Members that use a seperate Appendix #1 Purchase Offer Agreement with the owner and another with the RB.March 25, 2004 at 2:27 pm #6990
thank you Scott.
Well the short answer to your question is “Greed”.
Here is the deal I am considering:
TownhouseMarch 25, 2004 at 6:27 pm #6991
If you’re going to flip it, just put it in a simple trust, in the seller?s name.March 25, 2004 at 7:43 pm #6992
Thanks for providing examples of transactions.March 26, 2004 at 8:32 am #6993
jimmontyMemberQuote:If you’re going to flip it, just put it in a simple trust, in the seller?s name. ?Take an assignment of beneficiary in and become the trustee and the beneficiary, get a POA from the seller…and do whatever you want to do. ?The new lender will presume their client is buying the house from your seller and that the deed is being transferred normally (your beneficiary interest is silent). ?Its best to create the trust with the seller having 100% beneficiary interest, then do the assignment afterward…this way, if the lender insist on seeing the trust, they only see the seller?s name on it.
I know this is great (it is from Bill…) … but I am slow on the uptake and could use a little more explanation.March 26, 2004 at 9:04 am #6994
Not sure if the following will help or not:
SIMPLE ?FLIPS? WITHOUT ?DOUBLE-ESCROW? AND ?AGING? REQUIREMENTS
1.March 26, 2004 at 5:16 pm #6995
thank you, Bill and Sal. It is crystal clear except one item
What is “Purchase Order and Receipt for Deposit”?
AleksApril 12, 2004 at 6:23 pm #6996
When doing this type of a flip, what is the concensus as far as showing the home: After the NEO is signed, do most of you show the home to the buyers you have found or do you have the seller show the home? If you have the seller show the home, how do you keep the seller from circumventing you and working out a deal with your buyer directly?
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