Using Options to Pyramid Your Assets

Website design By BotEap.comDue to their inherent low/high-risk/reward characteristics, Options are ideal for building assets quickly. During the halcyon years of the 1970s and early 1980s, everyone was trying to pyramid fortunes through leveraged real estate. Then came the big slowdown in many parts of the country and many speculators turned their attention elsewhere. As long as the specter of inflation remains hidden and until John Q Public begins to perceive that inflation has returned, a dying housing market will offer spectacular option profits.

Website design By BotEap.comThis is what a man does. It offers full retail value for corner lots in urban growth areas, but your contract is dependent on you getting a building permit for a 7/11 convenience store. Then he lets the slow-motion rezoning process do the work for him as inflation rises. He only exercises the Option on it if he can obtain the zoning change, which, in itself, can triple the value of the property, or if inflation allows him to sell the Option or the lot at an acceptable profit. Usually he puts down a $500 down payment.

Website design By BotEap.comWe all know that zero interest rate financing can create a fortune as well as anything else. Leases and options can effectively combine sub-zero financing with leveraged appreciation. Here’s how: When you can Lease with an Option and get a reasonable percentage of your rents applied against the price of the FIXED Option in the PARTICIPATION. 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 landlords who rent have no idea how much profit they’ve passed on to you.

Website design By BotEap.comYou can also find ways to use Options to collect tax-free cash while you wait for the price to rise. You may SELL part or all of your Option or Lease for cash or paper. You can borrow on well-secured and documented Option Capital. You can use Option equity to make yourself more presentable to bankers by displaying Option securities as ASSETS that have no offsetting LIABILITIES to increase your personal or corporate NET WORTH to obtain a loan. And you can contribute Options and Leases to a UNION in exchange for a majority share that will earn you wages and benefits.

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