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Laura AlAmery Presents Coach Mitch’s Famous $1 Option Series

Learn how to invest in tax delinquent properties with Coach Mitch's Ridiculously Simple System. Discover legal ways to access TDP lists and strategies for investing before and after auctions. Take control of your investments the Coach Mitch way!

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Laura AlAmery Presents Coach Mitch’s Famous $1 Option Series

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  1. Laura AlAmeryPresentsCoach Mitch’s Famous$1 Option Series

  2. DISCLAIMERThis document and accompanying options shall be used for informational purposes only and shall NOT be construed as legal advice. Mitchell Goldstein / Coach Mitch is not an attorney anddoes not offer legal advice. A licensed attorney and/or other professionals MUST be consulted prior to the use of any of these documents and information.

  3. Overview = Why Tax Delinquent Property – TDP1. Your J.O.B. (Just Over Broke) system provided enough to live but not enough to provide for a “life.”2. All the REI systems do work – if you work them.3. All REI systems concentrate on “motivated sellers.”4. Rehabs, divorces, multiple mortgages, must move, bad tenants, not interested in property, foreclosures, etc. = all property in the tax delinquent data base.5. Coach Mitch’s Ridiculously Simple System recognizes that “the tax delinquent is the most motivated of all motivated sellers” because when we can’t even pay property taxes, something is very wrong.

  4. Overview – Getting TDP Lists1. You can legally get the lists of property that are delinquent paying its property taxes, TD Roll. 2.You should be reading the states property tax collection statutes to understand the process.3. The states public access law gives you the legal clout to be able to get public information.4. The Tax Collector will often have the TD Roll available, on CD for a reasonable fee, e.g. $30-$50.5. The Public Access Information Officer is available to get the information if there is any issue.6. The tax lists are also online: Google them.This module will go over the ways to most easily implement Coach Mitch’s Ridiculously Simple System… ™

  5. Overview = How to invest in Tax Delinquent Property? The Conventional WayNormally, you invest in TDP During or After the tax auction.1. Tax liens pay high interest rates.TLC issues: bankruptcy, due process, not warranty deed, must wait years to collect, all cash2. Tax Deeds = Buy selected property at auction, up to 50% FMV.Deed Auction issues: near FMV, not warranty deed, all cash3. After Auction = Excess Proceeds Overage issues: county views surplus as “its” money

  6. Overview = How to invest in Tax Delilnquent Property? Quickstart The Coach Mitch Way – Before the Auction1. Before = With tax liens , 1 – 2 months prior to the end of owners redemption rights, 1. Use Coach Mitch’sfamous$1 Option in “The Vise” to control the property. But, the redemption clock is ticking… 2. Then quickly sell to TLC investor or REI wholesaler.2. Before = With tax deeds, deal 6 – 12 months prior to auction. 1. Buy at very low amount, to 50% FMV. Quit Claim Deed. OR 2. Use Coach Mitch’sfamous$1 Option to control the property, even through the auction. OR3. FREE: 1 month prior to auction seek free deed A. 1 in 300 letters gets free deed B. Get overages or pay taxes and keep property

  7. Overview = How to invest in Tax Delilnquent Property? Quickstart The Coach Mitch Way – After the Auction4. After = Excess Proceeds 1. Coach Mitch’sfamous$1 Option controls property through auction so you get overagesversus you trying to convince owner after auction that you are not a money finder scam2. No need to find the owner, you have the contact info5. After = With tax liens or deeds, use “The Vice” on OTC property 1. $1 Option controls property = ½ Vice2. Then you buy lien or deed in landtrust = ½ Vice3. You are in control of both sides of the transaction

  8. Warren Buffet“Choose your basket carefully and then put all your eggs into it.”You can do Passive investing = Giving someone else control over your investments and future. You hope for a good outcome but you have no control or input into decisions, e.g. stocks, mutual funds.You can do Active investing =You take hold of your own destiny, learn what to do and put your own plan into action.Buying OTC and working “The Vice” and using Coach Mitch’sfamous$1 Optionis your planned action.

  9. OVERVIEW: Over The Counter investingProbably the easiest and safest way to enter into the tax delinquent property market place.1. Tax lien certificates are available OTC in many markets, including FL, MO, IL.2. Look at the tax collector website for a listing of TLC’s that were not purchased.3. Determine if TLC qualifies. Compare the outstanding taxes, to the tax assessed value and FMV; < 50% taxes to FMV.4. Due Diligence: Check Google Earth, tax assessor records, path of progress, check comps, go to see the property. 6. If vacant, decide to buy TLC in trusts name and foreclose.7. If occupied, ask owner if they can pay taxes. If “No” then get CM famous $1 Option and then buy TLC and foreclose.

  10. OVERVIEW: “The Vice” TLC investingProbably the easiest, safest and cheapest way to do TLC investing. You get the property in 2 months, not 2 years. – similar to OTC Vice1. TLC’s available in over 50% of states, including FL, MO, IL.2. The tax collector website will show listings of sold TLC’s. 3. Go back the number of years for that state’s redemption period and find TLC’s out or about to be out of redemption time.3. Determine if the property qualifies. See the amount of the outstanding taxes, compare to the tax assessed value and FMV; should be no more than 30% taxes to FMV, 20% for owner.4. Check Google Earth, tax assessor records, path of progress, comps.5. Go to see the property.

  11. OVERVIEW: “The Vice” TLC investing6. If vacant, do skip trace.7. Ifoccupied,ask owner if they can pay taxes. If “No” then get Coach Mitch’sfamous$1 Option, max 30% for liens with 20% to owner. This is the first ½ Vice8. 2nd½ Vice: Offer property to TLC holder; offer good deal but not for cost of taxes.9. If “No” sell wholesale ORpay the taxes if owner gives you the deedand give previous owner a note for 20%10. Sell retail or wholesale

  12. Coach Mitch’sfamous$1 OptionBe a middleman, a wholesaler, a finder.Bring two people together and make something in the middle. The Tax Delinquent Property database allows you make more in the middle because the Tax Delinquent Property owners are more motivated and able to give away more equity than other motivated seller groups: Examples:foreclosures have high mortgagespeople moving have high mortgagesdisaffected landlords have high mortgages

  13. Why use the option:The option can be used to facilitate the sale of any kind of merchandise, from personal property to real property.The option is a perfect device to use in the effort to put together a transaction. The seller has someone working on selling his item, the middleman has something to sell, and the buyer has someone else looking to satisfy his need besides himself.

  14. Coach Mitch’sfamous$1 Option.With only $1, control property, without any liability.The single most powerful contract in the real estate investing world is the Option. How else can you take control of unlimited numbers of property, with only $1 each, make significant profits without owning the property, and best, without being liable for the properties upkeep, the mortgage, taxes or anything else. The record: $1 took control of a restaurant valued at $1,600,000 using Coach Mitch’sfamous$1 Option.

  15. What is an option?Definition: Option = to choose, to selectIn general legal terms, a straight real estate option agreement is a unilateral agreement, binding only on the optionor, the seller. The optionor / seller promises the exclusive, unrestricted and irrevocable right and option to purchase by the potential buyer / optionee, in exchange for performance, i.e. the exercising of the option to actually purchase the property. The purchase of a straight or “naked” real estate option does not impose any legal obligation upon the buyer / optionee to exercise the option and purchase the property.

  16. To exercise is to promise to perform. That is why, once exercised, the real estate option agreement turns from a unilateral agreement into a bilateral purchase agreement.Once the buyer / optionee exercises the straight real estate option, the agreement becomes a bilateral contract, binding on both parties, at which time thebuyer / optionee becomes the buyer, and the optionor becomes the seller.To perform is to close on the transaction.

  17. Key Parts to Every Real Estate Option1. Optionee: Optionee is the name given to the party buying a real estate option. Once a real estate option is exercised, the optionee becomes the Buyer.2. Optionor: Optionor is the name given to the party selling a real estate option. Once a real estate option is exercised, the optionor becomes the Seller.

  18. Key Parts to Every Real Estate Option3. Real estate option: When an optionee buys a real estate option, the optionee buys an exclusive, unrestricted, and irrevocable right and option to purchase a property at a fixed purchase price within a specified option period. There is also a non-exclusive option, where the seller / optionor seeks to create competition so that morethan one middleman will try to sell the property.4. Option consideration: Option consideration is the amount of money, goods, or promises paid by an optionee/buyer to buy a real estate option from an optionor/seller.

  19. Key Parts to Every Real Estate Option5. Option period: The option period is the specific period of time that the option is in effect, as stated in the real estate option agreement. I use 12 months.6. Exercise of option: The exercising of a real estate option occurs when the optionee notifies the optionor, in writing, that he is going to exercise the real estate option and purchase the property under option. To exercise is to promise to perform.7. Expiration of option: A real estate option expires when an optionee fails to exercise his real estate option within the option period stated in the real estate option agreement.

  20. How A Real Estate Option Transaction WorksStep #1: The optionee/buyer pays option consideration to the optionor/seller. Some judges allow $10, some require $100. Coach Mitchpays $1 and always will. I label the consideration at $100 and give $1 as the down payment. This is unique.Step #2: A Memorandum of Option is recorded at the County Recorder’s office. This secures the optionee/buyer position because the optionor/ seller must deal with this legal device if choosing to abrogate the option without permission.

  21. How A Real Estate Option Transaction WorksStep #3: A real estate option is executed when the optionor/seller grants the optionee/buyer the exclusive right and option to purchase the property at a fixed purchase price during the option period. A non-exclusive option is sometimes granted when the seller / optionor does not want to grant exclusive rights to the buyer / optionee.Step #4: The optionee/buyer exercises his option, or lets it expire. To “exercise” is to promise to perform, stating you will buy the property.

  22. How A Real Estate Option Transaction WorksStep #5: Once exercised, a real estate option agreement turns into a bilateral purchase agreementin which the optionee is now labeled the buyer, and the optionor is labeled the seller.Step #6: The buyer and the seller can execute a detailed purchase agreement or the buyer simply performs the purchase as stated in the option Or, at any time, the buyer can sell his position via an Assignment.Step #7: The seller transfers the property title to the buyer at a closing.

  23. Memorandum of OptionThis is an important document. It is wise to let a seller know that your position is protected. This can be done by recording the option at the County Recorders. However, recording the actual option document allows the entire world to know the terms of the purchase. Instead, record a Memorandum of Option, which is a document saying that the buyer / optionee has an option against the property and that anyone interested in the property should contact the buyer / optionee. Recording the Memo of Option document puts a cloud upon the title to the property. A title company will consider the Memo before allowing a sale of the property under its auspices.

  24. Prepare Yourself This is what I do1 Create packets with at least one of each of the main type of options. Label each packet appropriately; Option #1 to #4. Memorize what each does.2 Each packet should contain two copies of everything: the option, a Memorandum of Option, a $1 bill plus a copy of the $1 bill with a signature receipt line, and one copy of all the Coach Mitch clauses. The serial number of the $1 bill should be typed in the option, as the Deposit.

  25. This is what I do 3 Question the seller. Find out “what they want to accomplish.”Use this information to determine which option you will use. Calculate your numbers and terms before you mention them so that you know the consequences of what you are offering.4 Negotiate the transaction within the framework of the option. If your negotiation calls for splitting the profit, then use the Split Profit Option, as it has been designed for this purpose.

  26. This is what I do.5 When explaining a clause, try and stick to the phrases that I have developed. They seem to work. Always try to answer in a simple butcomplete manner, explaining your rationale and how the seller benefits.6 Show the appropriate option, saying, “This is the document that I have found works best for this type of transaction.” Fill in any agreed upon terms, using plain English. Print clearly. All parties should initial any changes.

  27. This is what I do.7 Agree on all language. Then say, “Congratulations, you just sold yourproperty.” Give the $1 bill to the seller, saying, “This makes it legal.” Have the seller sign the copy of the $1 bill showing that he received $1.8 Now, all principles should find a notary and sign two copies of the option and the Memorandum of Option. Record the Memorandum of Option - typical $35 fee. Option is still a legal document if not recorded.

  28. Basic Clauses and ThoughtsUnderstand the thought behind each clause. Be prepared to defend each thought.>>> Right to Purchase. Seller gives the Buyer the exclusive right to buy the Property described below within the terms set forth in this document, or as renegotiated.>>> Option Consideration. For the Buyer having received an Option to Purchase the Property, the Buyer gives $100 in Option Consideration to the Seller. Payment shall be made as follows:

  29. Basic Clauses and Thoughts>>> Deposit. Buyer gives the Seller the sum of $1, with the Serial Number _____________________, receipt of which is hereby acknowledged, for theright to buy the Property. The Deposit shall be nonrefundable and is considered the fullliquidated damages.

  30. Basic Clause and Thoughts>>> Term. The term of this Option shall be for a period of ____________ (__12___) months, and called the Option Period. The Option Period shall commence on the ______day of ______________ 2014, and shall be automatically renewed, OptionPeriod after Option Period, unless, thirty days prior to the end of an Option Period, the Seller terminates the Option, in writing, return receipt accepted, and with Buyer’s written permission.

  31. Basic Clauses and Thoughts>>> If Buyer has a resale contract in place at the time of the Option's end date, the Option will continue until a closing has occurred. Time of Essence shall not be invoked. Having a buyer makes the Option able to continue without end.>>> Should tasks need to be completed at the property, the Option shall be extended to include the time needed to complete the tasks, plus the full, original Option term.

  32. Basic Clauses and Thoughts>>> Purchase Price The Buyer agrees to pay for the Property, and the Seller agrees to accept as the Purchase Price, a sum equal to:The amount of the encumbrances, believed to be about ________ $_______ (_______________________)plus Initial________ $_______ (______________________) InitialORFor an unencumbered title, the base purchase amount of: _________ $_______ (______________________)Initial

  33. Clause for SPLIT PROFIT OptionOR The base purchase amount _________ $25,000 ( twenty five thousand dollars) Initial plus The Buyer agrees that any profit over the base purchase amount less the costs of selling and settling the Property shall be split with the Seller on the following basis: Seller 50% Buyer 50%.

  34. Basic Clauses and ThoughtsThe Purchase Price shall be due as follows:1. $ 1 Deposit, plus2. $99 Upon the Exercise of the Option, OR upon Exercise at closing, plus3. $___________ (________________________)4. ______________________________________Paid within 10 business days after closing of title, with good funds.

  35. ONLY FOR AREAS WHERE OVERAGES GO TO THE PREVIOUS OWNER OR WHERE RECISSION RIGHTS MIGHT BE A FACTORThe Seller transfers their rescission rights to the Buyer and Seller shall execute documents to this effect.The Seller transfers their rights to any excess proceeds to the Buyer and Seller shall execute documents to this effect.

  36. Option #1 = Exclusive Option Option #2 = Non-Exclusive Option Option #3 = Tax Sale Option Option #4 = Split Profit Option OPTION CONTRACT #1 TO PURCHASE REAL OR PERSONAL PROPERTYAgreement made this 2nd day of January, 2014,by and between I.M. Investor, the Buyer(s), and/or assigns, having an address at 1Mansion Way, Gold Rush, CA 90210AndJohn Doe and Jane Doe, the Seller(s), having an address at123 Broadway, Someplace, NY 12345In consideration of the mutual promises stated in this document, and other good and valuable consideration, receipt of which is hereby acknowledged,theparties agree as follows:Right to Purchase. Seller gives the Buyer the exclusive right to buy the Property described below within the terms set forth in this document, or as renegotiated.Property 10 Perfect Place, Hot Spot, NV 11711Option Consideration. For the Buyer having received an Option to Purchase the Property, the Buyer gives $100 in Option Consideration to the Seller. Payment shall be made as follows: Option is assignable to wholesale or retail buyer • Fill in as much data as you know from the initial call or tax/property records. • Have several options filled out with different figures or terms. Prep conversation. • Only show one option, or • you look like a conniver. • Make any changes to it.

  37. Deposit. Buyer gives the Seller the sum of $1, with the Serial Number F 24823305 P, receipt of which is hereby acknowledged, for the right to buy the Property. The Deposit shall be nonrefundable and is considered the full liquidated damages.Term. The term of this Option shall be for a period of ____________ (_____) months, and called the Option Period. The Option Period shall commence on the ______day of ______________ 2014, and shall be automatically renewed, Option Period after Option Period, unless, thirty days prior to the end of an Option Period, the Seller terminates the Option, in writing, return receipt accepted, and with Buyer’s written permission.Purchase Terms and Conditions of this Agreement are as described below:If Buyer has a resale contract in place at the time of the Option's end date, the Option will continue until a closing has occurred. Time of Essence shall not be invoked.Should tasks need to be completed at the property, the Option shall be extended to include the time needed to complete the tasks, plus the full, original Option term.

  38. > Have all of Coach Mitch’s Option clauses available. > New clauses should state the thought clearly. Use sellers’ words if possible. _____________________________________________________________________________________________________________________________________________________________________________________________________________Purchase Price The Buyer agrees to pay for the Property, and the Seller agrees to accept as the Purchase price, a sum equal to:The amount of the encumbrances, believed to be about_________ $___________ (__________________________________) plusInitial_________ $___________ (__________________________________) InitialOR For an unencumbered title,the full purchase amount_________ $___________ (_____________________________________________)InitialThe Purchase Price shall be due as follows:1. $ 1 Deposit, plus2. $99 Upon the Exercise of the Option, OR Exercise at closing, plus3. $___________ (___________________________________________________)4. ________________________________________________________________Within 10 business days after closing of title, with good funds.Seller Date Buyer DateSeller Date Buyer DateSTATE OF ________________ , COUNTY OF ________________ SS: STATE OF ________________ , COUNTY OF ________________SS:On the __________ day of ______________ 20 , before me personally On the __________ day of ______________ 20 , before me personallycame ___________________________________ to me, known to be the came ___________________________________ to me, known to be theIndividual described in and who executed the forgoing instrument, and Individual described in and who executed the forgoing instrument, andacknowledged that s(he) executed same. acknowledged that s(he) executed same._________________________________ _________________________________STATE OF ________________ , COUNTY OF ________________ SS: STATE OF ________________ , COUNTY OF ________________SS:On the __________ day of ______________ 20 , before me personally On the __________ day of ______________ 20 , before me personallycame ___________________________________ to me, known to be the came ___________________________________ to me, known to be theIndividual described in and who executed the forgoing instrument, and Individual described in and who executed the forgoing instrument, andacknowledged that s(he) executed same. acknowledged that s(he) executed same._________________________________ _________________________________ • Choose only one pricing structure. • Encumbrances are approximate, current • Principal of mortgage, taxes, liens, etc. • Exact price known only at closing. • Exercise Option at closing. • Only $1 out of pocket.

  39. Copy a $1 bill onto receipt. • Paperclip original $1 bill to receipt. • Keep $1 Deposit sheet in each packet. • Say, “This $1 bill makes our deal legal.” • Keep signed receipt.

  40. Rules to live by or you will dieRule #1 CHOOSE YOUR DEALS CAREFULLY1. Only deal with highly motivated sellers2. Do not gamble – except on sure things3. You must be able to purchase low enough to prevent any loss.4. If price is above 50% then option, I never purchase.Rule #2 ONLY DEAL WITH DESPERATE SELLERS1. Only deal with people who are in worse financial shape than yourself. You have the power.2. The best candidates are those who are facing very desperate circumstances, like Tax Foreclosure.3. Try offering 25% to someone who is not desperate and see the angry reaction you get.4. Sellers facing tax auction in a few days will shrug their shouldersand nod, “Yes.” They don’t blame you.

  41. Rules to live by or you will dieRule #3 ONLY BUY AT FIRESALE PRICES1. Either buy a property or option it.2. Don’t ever pay more than 50% of the FMV. ($5000)3. Real estate is unpredictable and every transaction should have a very significant potential profit.4. If forced by circumstances, you must be able to lower your price so that you can “quick sell” the property, even at wholesale or below.5. Be empathic; you get more with honey.

  42. Rules to live by or you will dieRule #4 IF NOT BUYING THE PROPERTY, THEN OPTION IT1. Whatever the asking price, Coach Mitchsays, “Just Say Yes.” If the seller thinks you credible, you’ve made a deal.2. By putting out only $1, to control one property, you can Option as many properties as you can find.3. AD: “Real estate investor has too many properties all over area. Must sell now. Will finance. PLEASE Call 23-4567”

  43. Rules to live by or you will dieRule #5 USE CoachMitch'sfamous$1OPTION1. Coach Mitch’s$1 Option is KISS – Keep It Simple Stupid2. People feel that you are honest if your document has large type, is short, and is clear and understandable, without legal terminology.3. Seller’s believe that the option covers the necessary points and does not see anything that can harm them.4. Because of my simple, easy approach, Seller’s don't even involve their lawyer. No lawyer has changed a clause.Because the reason for any clause can be easily explained, Sellers feel placated.Because there are no surprises, Sellers feel confident that they are making the right choice.5. I have purposefully kept out the obvious weasel clauses. They are not necessary. You only lose $1.

  44. Rules to live by or you will dieRule #6 THIS SALES CONVERSATION LEADS TO A PURCHASE1. “What are you trying to accomplish?” Listen to the answer carefully, memorize it.2. Determine if this is what the seller needs and give it to him – but in a way that you can make a profit.3. If seller is desperate - then buy.4. Help to move.

  45. Rules to live by or you will dieRule #7 If dealing with someone who is not desperate - then OPTION1. Find the seller’s hot button2. You can try for a lower price….but…3. Whatever the asking price, Coach Mitch says, “Just say Yes.”4. Remember, “or as renegotiated”

  46. Rules to live by or you will dieRule #8 If seller is not motivated at all – then OPTION.1. It does not matter the price you optioned the property at because you can change your offer at any time.2. Your goal is to get inventory.3. “$1 – Is it legal?” – “Yes, The option consideration is actually $100 and that is legal, the down payment is $1.”4. Seller questions $1, you say, “You’re worried about my incentive to sell the property?”“You want the property sold right? We both know that I am going to have to market the property. That is going to take money. The more I give you now, the less I will have for ads. Now, I know that a $1000 DP is not going to make you, and$1000 is not going to break me, but that’s $1000 less available to advertise the property. Which is more important to you today? Money for a nice dinner or do you want to get the property sold so you can get that new house?”

  47. Rules to live by or you will dieRule #9 THE CONTRACT TERMS CAN BE RENEGOTIATED!1. Everything in a contract is negotiable until the transaction has closed.2. Seller’s resistance melts when I point out that they had agreed to renegotiate any of the terms, in writing.3. The Seller can renegotiate, “I really need more. Couldyou see if your buyer will go higher, like … (number?)”Now you know the real bottom line for the seller.Rule #10 THE COOKIE CUTTER IS...KISS - KEEP IT SIMPLE, SIMPLE, SIMPLE, SIMPLE

  48. Additional Clauses#2. Non-Exclusive Option#3. Tax Sale Option#4. Split Profit Optionother clauses – all included in course.

  49. Using the $1 Option, I controlled this property for one year. I got the house across the street for $100. After selling that property for $89K, I purchased this house for $50K cash. It appraised for $127K.

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