Question About Options And Foreclosures
Hello all,
I'm looking at some houses in foreclosure at the moment. I'm thinking of flipping them using a Option to Purchase contract. I have some questions about options in general and options related to foreclosures specifically.
1. Options to Purchase can be recorded to cloud the title? I remember reading this somewhere, but I'm unable to find the source. Could someone please confirm this for me?
2. Does anyone know where I can find an option to purchase contract? Thought I had one in Bronchick's book, but it appears not.
3. Is there anything I should be aware of when trying to option flip a property in foreclosure? Or will just about any investor who does foreclosure accept it?
4. Is there anything special when attempting to offer a promissory note as consideration in the option agreement? What should the terms of the note be?
Also, please include anything you think I should know about options in your response. Thank you all!
All those experienced please guide! 
I'll do my best to answer a few of your questions. I'm by no means an "expert" so please keep that in mind when you read my response.
1. You're wondering about clouding the title. I wouldn't use the same form that I'm having the owner sign with the purchase price and terms in it for the simple reason that it's public record. I wouldn't want anyone to just go an see what the owner and I agreed to. I'd use another form similiar to a Memorandum of Agreement. This way you have achieved your cloud on the title but the details of your transaction remain private. In my experience I haven't felt the need to cloud the title when dealing with pre-foreclosure. That's may simply be me.
2. Where can you find an option to purchase contract. This question has been asked countless times on this website and I think you're gonna get the same answer 99% of the time. To put it simply most investors pay a good deal of money to acquire their contracts either through courses or by working with a RE attorney. Somebody may very well give them to you, but I wouldn't expect investors to jump out of their seats to do this.
3. Is there anything you should be aware of when trying to option flip a property in foreclosure? I'm going to make the assumption you are talking about a property in pre-foreclosure. I'd obviously be aware of what kind of repairs (if any) the property needs, run a title check, get comps for the property, etc. I think this all falls into the category of due diligence.
4. I'm not really sure I understand your question here so I'm going to defer to the other investors.
Hope that helps,
Ryan J. Schnabel
I will tell you where to get an option contract. I bought a book called 301Legals Forms & Agreements. It has everything I ever needed in REI. It cost me about $19.00 with shipping charges.
Lori
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