cashpoorParticipant@cashpoorJoin Date: 2004Post Count: 22
I am looking to use an option to purchase land. What I am wanting to do is take out a option on 15 x $40k blocks of land [$600k].My question is how do I on sell the blocks for say $50k after 12 months without settling the $600k?
Hope someone can help me.
Thank you in advance.
CashpoorTerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
Just sell the options? ie assign it over to the new purchaser. Even if you have to settle, you would do a simualtaeneous settlement, so you would not need finance.
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[email protected]cashpoorParticipant@cashpoorJoin Date: 2004Post Count: 22
Thank you for your reply.The way is clearer now.
CashpoorGeronimoMember@geronimoJoin Date: 2002Post Count: 167
Is 50k a good deal for the buyers of the options?
If you can’t sell the option, under a Put/Call Option contract you will still be obliged to settle on any blocks that haven’t been onsold so make sure you’re able to.
Get a really good solicitor on your side to do up the option contracts too.
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[email protected]Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
The answer is simple. Use a Put and Call Option and merely exercise the Option.
if you use 15 separate Option Contracts then you can nominate separate purchasers for each of the indidual blocks. (I assume that they individual title now)
richard at fhog.com.au
There is no such thing as a problem.
Just a solution waiting to be foundaaron12Participant@aaron12Join Date: 2003Post Count: 8
In the first place, how do you calculate the price of an option?
AaronGeronimoMember@geronimoJoin Date: 2002Post Count: 167techaMember@techaJoin Date: 2004Post Count: 79
Ive never seen the terminology for Options and how you could actually use the implications of the teminology with options to purchase a property.
Put options are options to sell a parcel of share at a pre determined price and time in the future.
Calls are to buy options at a predetermined price and time in the future.
You can also write both puts and calls.
How can you go short a property option?
Me thinks this terminology is being used incorrectly here!.AdministratorKeymaster@piadminJoin Date: 2013Post Count: 3,225
I think what is meant is that instead of immediately entering into a Contract of Sale what will happen is that the owner of the land sells an Option to Buy to the investor whilst the same investor sells an Option to Put to the investor
(which allows the owner to force the investor to buy the property in the event the investor doesn’t exercise his Option to Buy).
The ultimate outcome is that using this strategy the situation is just as if the two parties had entered into a Contract of Sale.
The advantage to the purchaser may be at least twofold :
1. he doesn’t have to pay the stampduty on the purchase immediately
2. if the Option is held by a fresh company the investor may be able to sell the company and thus achieve that a second lot of stampduty is avoided. (there are some doubts in my mind as it looks to me that this would be a case of evading rather than avoiding to pay stampduty).