My First Option Deal at 72 Years Old and I’ve Made $159,983!
Step 1: Getting Started
I attended Mark Rolton’s 3 day boot camp some 3 ½ years ago , learnt the basics and have been present at most ( if not all ) of Mark’s webinars and visits to Perth…am always prepared to look, listen and learn.
Lack of confidence prevented me from putting my knowledge into practice and therefore prevented me from initiating my first option agreement. ALL THAT PRECIOUS TIME LOST — WHAT A FOOL!
Step 2: Find the Deal
I targeted areas that have residential development potential with zonings R30 or higher and sent letters (hand written addresses) to about 80 owners, of who 7 responded. Many of these were not aware of what an OPTION meant and I took my time explaining to them the concept of such an agreement. I also advised them that unless they and I were both happy and satisfied with the arrangement, there would not be any option agreement. Most of the 7 parties stated that they were not looking for an option. However one party was happy to proceed to a formal agreement with the knowledge that his site has development potential…in fact he told me that it could sustain a 5 lot subdivision.
This agreement consisted of a 2 year term (24 months), a $1,000 option fee and a $1,010,000 option price.
Step 3: Choosing the Right Strategy
My further enquiries with the State Planning Commission and the Local Authority confirmed not only what was discussed with the land owner but enhanced the benefits because the Plot Ratio ( 0.6). On this site of 1012 sqm, the town plan permitted the construction of 607sqm of floor area, if Multiple Dwellings were to be constructed.
The unusually wide street frontage of 40.23 m and shallow depth of 25.15m would allow a very simple 5 lot subdivision to be approved, with each lot having its own street frontage of 8m +. It turned out to be a simple process that the council would fully support.
Step 4: Know the Numbers
In essence, this was a “NO BRAINER” and I therefore did not see the need to obtain a Development Approval and on sold it immediately as a Short Option.
I advertised both in printed and electronic media the “assignment of the BENEFITS of this option.” I received calls from valuers, local estate agents, builders, developers and eventually received conditional offers ranging in price from 2 offers of $40,000, 1 offer of $110,000 and 2 offers of $ 165,000. This eventually led to an unconditional assignment of $165,000 which was my original asking assignment price and from which I knew that the incoming assignee would benefit. It meant I received a nice profit and so does the owner of the property. Most importantly, for the new option holder there was still nearly 18 months outstanding before the option had to be exercised by this end buyer, a developer – which would give him plenty of time to get his Development Approval through Council for the 5 blocks.
Assignment Fee: $165,000
- Option Fee $1,000
- Legals $3,713
- Advertising $304
- Development Approval NIL $ 5,017
- Total Costs $ 5,017
- Profit $159,983
There are loads of opportunities available to anyone who wishes to pursue the control of properties through the use of options…my recommendation to any disbeliever or sceptic is : ” ATTEND A 3-DAY SEMINAR PRESENTED BY MASSLAND “.
If I can do it, anyone can – I AM 72 + YEARS OF AGE and I just banked $159,983! It’s an exciting way to spend my retirement and I love being debt free.