Property options, What the hell am I missing?

Hi boogz
ok first things first, correct on Rolton. Grab one large barge pole, use to distance, repeat. Do not touch under any circumstances.
Next, yes in 'theory' the process is that simple. Its the complexities that are a great deal more complex than Rolton or other seminar salespeople would have you think.
the issues arise (and happy for others to correct or add to this list as well) in a couple of areas:
1 – locating an appopriate site: depends on your sector, but convincing a vendor who knows what he's got of the 'benefits' of using an option that in Rolton's model doesn't benefit the vendor in any way what so ever, is challenging to say the least. Options in and of themselves are complex and fluid documents, that are different for each deal (outside of the basic Call, Put, or C&P combo). Conditions and structure are where the devil and detail come into play. That said, they are a commonly used, and powerful tool, but a $1000 refundable deposit for a 24 month option? I suppose anything is possible if you find a vendor who's ignorant of what they're sitting on, but I would encourage you to operate transparently and ethically *(only my personal opinion and standpoint, I don't pretend or imply I speak for others).
2 – At present, banks/funders are KILLING developers of all sectors and sizes, including large property funds. There is not a shortage of DA stock out there across multiple sectors including resi, comm, industrial etc. Its about finding a deal that stacks up, and finding a developer who's a) willing to take a punt, and b) has the funds to do it. THAT, in the current marketplace, is a BIG challenge. Most are looking for that 'golden egg' site that minimises their risk as much as possible. Choose your sector, region, site and so on very carefully.
3 – Finding a vendor who's willing to wait 18-24months for their 'possible' payout. Most vendors, fi there's an agent involved or its on the market, want money now now now now now now. Many are resistant to waiting that long, or operating under developers conditions (subject to DA/development agreement etc). This needs to be explained in some detail to them, as many simply don't know. Not their fault, and circumstances will vary with each vendor. Sure anything's possible with persistence, and the reality of it is, if they want to sell to a developer of any flavour, then operating under those conditions is a non negotiable factor in the contract side of things. Sure, again, you can structure it with phased payments over different completed stages of the DA, you can to a JV or any other variation. So one message to take away is this – find a knowledgeable and experience solicitor who's done this kind of thing many times before. I know a few, they may know a few in Perth, can't say for sure yet.
4 – Persistence. As some would have you believe, finding options and having pie eyed vendors who's attention and compliance you can grab simply by offering more money is not as easy as picking daisies in the field. It is time consuming, frustrating, and you will sometime face verbal abuse from vendors. Seriously. They either don't understand, or think you're trying to rob them somehow. Its again not their fault, but we all handle that in our own way I guess.. and yes, some are just ar$eholes.
5 – Cost – only my opinion, but having something like RP Data or PDS live is a very important key tool to have. Can it be done without it? Sure, but it complicates things further not having that RP information, including price, vendor details etc. I use RPD myself and find it invaluable.

All in all, can it be done? Sure thing. Just don't fall into the NLP laden BS seminar spruiking circuit like some have. Stick to the real world, talk to agents, developers, lawyers, town planners etc. Expand your network, write out who you need, and why, and where. Plan. Research. Be patient.

Good luck.

Gday Boogz
Mate I'd never discourage anyone from giving it a go. If the research backs the area you're considering, and you have the legal, time, and financial resources, plus enough marketing contacts and consultants to do the DA, then go for it. Yes they do take a lot of work, sometimes they come off easy a lot of the time they don't come off at all, but if they were just 'the standard' everyone would be doin them Its risk vs reward and payoff etc.
As you say, start somewhere. You could even try and look for a simple block to subdivide, use an option to do that instead of a big land subdivision or DA. Start small. And yes (although i'm goin to be stubborn and say it aint his catchphrase either ) and agree that you never go broke making a profit!
I certainly wasn't trying to discourage you (or anyone) from doing options. and by no means do I pretend to be the most experienced at them here either. My intention is bring a dose of reality to it all, make sure people are firmly based in the realities of the situation and not caught up in marketing hype.
Maybe a simple buy hold renovate and refinance is a good start.. or vendor financing… or flipping.. lol .. point being is there's a ton of strategies out there.. there will be one that suits your circumstances and goals. Just make a start, do it smart, and go upwards from there.

Keep posting, and us posted.

Cheers!

Never say die mate. Ever. There is ALWAYS a way to do something. Always. IT may not happen as fast as you want, or even how you want it to..but if you stay focussed, motivated, then a solution will come your way.
Use the time it'll take to get some capital growth in your home and reduce some personal debt to learn, educate, make connections witih people, stuff that doesn't cost much if anything to do. As long as its something that contributes towards the end goal. Keep asking questions, there are plenty of people on this forum with bigger brains than me who may well know of ways and means to get you there. No such thing as a dumb question in my book.

never admit defeat. Defeat, like treason, is all about timing and perspective… think about it.

Hi Ryan,
I  have done some option deals ..with cash in the bank. Happy to talk whenever it suits .
Thanks
David

Hi David,

Would you care to share some of your experiences in Property Options? I'm not really after specifics as such but would love to know how you got into it and what type of deals you have done that gave you cash in the bank.

Cheers

Tips In Investing A Property:

– Take a long-term view
– Positive vs. negative gearing
– Consider using the equity in any other property you own.
– Choose a loan tailored to your current needs.
– Use a buyers agent/property finder
– Visit a financial adviser and/or accountant

Hi 4141…
on solicitors etc, definitely, get 'em on your team, A good lawyer, agent, town planner, architect maybe, builder, form relationships with them even if you don't have deals, let them know what you're planning on doing, initially it'll be 'ok we'll see if you do' but if/when you turn up with something, the people will be there in place.

On finding land, believe me people wish councils would disclose all the upcoming zoning changes etc, large developers spend a lot of effort anticipating this and landbanking as much as they can. again, I think it's worth forming a relationship with the local planning and development people. Not sure if they'll disclose, (or even know) whats coming up or not, but its worth a go!

Its about perseverance and patience. LOTS of both. You may have to 'nearly get' 100 of them before the one comes your way.. just keep going.