Lease Options

Hello everybody. This is Gordon Moss with Quixote Adventures. And I'm very lucky to be joined with Jack Shea today. This morning we're coming from beautiful Aspen, Colorado. We're sitting on the balcony of a Snowmass condo that we just had a ski seminar. We had a great time. Jack's been one of my friends for a long time. And today we're going to talk about a specific real estate topic. What we think is the most powerful topic and the most overlooked topic out there. Options. Options on real estate, options on notes, a way to control property, take your risk away, etc. Jack came to me a couple years ago at a seminar and said, you know, you should double your IRA every year. And it kind of got my brain thinking, how am I going to do that? And I'd always heard about the option game and how to control things without much risk. And in my own instance, what I did was I went out and I bought non performing notes for a fraction of the price, a little bit of money. I effectively created an option on a property without much money down and without having to close on it. So I reduced my risk greatly, I reduced my output greatly. And we all know how crazy this real estate market is right now. Frankly, I'm of the mind that options is the only thing, the only way to operate right now. So let me introduce Jack and have him kind of talk about his extreme experience, vast experience in this field. And take it away, Jack.

Well, it's been the biggest, most profitable segment of my real estate business. I've been buying properties for almost 30 years. And for many years that was the only method I would use. It has the lowest amount of cash required and no risk. And at the time I didn't have much cash to invest. Years later, when I optioned 50 properties in one year, I had more options and properties than I needed, but I had them at the lowest entry cost. And the lack of risk was important to me. And when they went up in value, I prospered. If they crashed or something happened, I wasn't liable for it. So it's been very important for me for safety. High leverage, it's the highest leverage and it's perfectly legal. It's according to common law. Options are used in stocks and all over the world, the commercial world, and you can use it. And it's a technique that's not too complicated. There are certain laws and procedures to follow. And it's been really something that after about 15 years I wrote a book and put a course together about how you can Depreciate. I learned how you can depreciate, appreciate property without owning it. And that's exactly according to the tax code. And when a property sold, I was able to do a 1031 tax free sale, sometimes with 50 or 80,000 profit and I hadn't owned the property. But it's. The procedure is proper according to the tax code.

Jack, one thing specific we talked about earlier was the tenant option. Talk about that a little bit.

That's important, Gordon, that the tenant option is a different vehicle. We learned many years ago that I learned at least after spending a year in court that the judge said I couldn't evict the tenant. He had a right in the property. So we invented a contract for options. So the tenants get an option, they behave better. We've sold dozens and dozens of properties to people, but we didn't. If they didn't perform, we didn't have to perform form of eviction. So the course has two different types of options. One for you for buying. One is not quite an option for the other side. There's other devices in there that I think you'll find a boost to your real estate business. They're not available in all cases, but I found there's many that are and you can find them and it would be your most profitable investments also.

So to summarize, as far as being a real estate investor, we think the option is the most powerful tool out there, something you should look into. Jack's an expert at it. He has several courses on it. Make it real simple for you.

So jackshayrealestate.com on the web, you can read all about it. Give me a call.

Be happy to help you out until next time.