Today’s episode is one of my more exciting ones: making money out of thin air. It’s not a hoax or a scam, but a viable way to create deals without taking money from your own pocket. It’s never really about the numbers or the asset: every deal is built on the foundation of a promise. A buyer creates a formal promise to a seller that they need to fulfill, and that’s where every deal begins.
There are different types of promises that we make to sellers when we create a deal for their property. We use promises such as:
- The Purchase Agreement, which is a mutual promise between the seller and the buyer.
- There is also the Promissory Note, which many college students or anyone who has ever taken out a loan will recognize.
- Next is the Mortgage, which details the repercussions if the promise is not kept (the Mortgage is not paid).
- There is also the Lease Agreement, detailing the stipulations of the lease during its term.
- An Option to Purchase is a promise that the buyer will buy the property down the road at today’s price.
- A Land Contract and a Contract for Deed.
Once you understand that EVERYTHING you do is a promise, then you’ll understand your integrity is on the line. In negotiations, you’re showing the sellers that you’re a person of integrity who can keep your promises. That’s how the best deals are made.
Don’t forget to visit us at LarryHarbolt.com for all your real estate education needs.
If you’d like copies of the forms we mentioned in the episode today, visit LarryHarbolt.com/ThinAir.
Good Luck and Happy Investing!