Due to their inherent low / risk-high / reward characteristics, options are ideal for building assets quickly. During the happy 70s and early 80s, everyone was trying to make a pyramid of a fortune through leveraged real estate. Then came the big slowdown in many parts of the country and many speculators turned their attention to other things. As long as the specter of inflation remains hidden and until John Q Public begins to perceive that inflation has returned, a moribund housing market will offer a spectacular option profit.

This is what a boy does. It offers full retail value for corner lots in urban growth areas, but your contract is subject to you obtaining a building permit for a 7/11 convenience store. Then he just lets the slow-motion re-zoning process do the work for him as inflation rises. You only exercise your Option if you can get the zoning change, which in itself can triple the property’s value or if inflation allows you to sell the Option or the lot at an acceptable profit. Usually, you deposit $ 500.

We all know that zero interest rate financing can build a fortune, just like anything else. Leases and options can effectively combine SUB-zero interest rate financing with leveraged appreciation. Here’s how: When you can lease with an option and get a reasonable percentage of your rent applied against the price of the FIXED on EQUITY option. That captures GROWTH and AMORTIZATION. But, suppose you can sublet the property for more than your own rent payments. You will also get a POSITIVE CASH FLOW. And most of the landlords you rent to have no idea how many benefits they have transferred to you.

You can also find ways to use Tax Free Cash Raising Options while waiting for the price to increase. You can SELL part or all of your Option or Lease for cash or paper. You can borrow on a well-secured and documented Option Security. You can use option actions to be more presentable to bankers by displaying option actions as ASSETS with no offsetting LIABILITIES to increase your personal or corporate NET EQUITY in order to obtain a loan. And you can contribute Options and Leases to a UNION in exchange for a majority stake that will allow you to earn salary and benefits.

Leave a Reply

Your email address will not be published. Required fields are marked *