What about a title insurance company or even a termite company? You may need to find a real estate agent. Whatever the partnership needs are that you must fulfill to put together a successful transaction, by using a real estate option, you will give yourself the necessary time to form the partnership(s).
7. Watch the Direction of the Market
You can use an option to tie up a property and watch the direction of the market. Everyone has 20/20 hindsight with regard to the turning points of the real estate market. The trick is to have 20/20 foresight with regard to these turning points. When things are going well, that is easy to recognize. When things are going not so well, that is easy to recognize.
We have already told you in Chapter 2 that the economic cycle is one of expansion, prosperity, recession, and depression. Then it repeats itself. Real estate value is greatly influenced by the economic cycle. Typically, real estate is said to do well in the expansion and prosperity phases and poorly in the recession and depression phases.
Remember our example from the previous chapter. We said we made an offer on a five-bedroom,four-bathroom,5,000-square-foot single family home in a great neighborhood. Our offer was in the form of a real estate option contract. We wanted a six-month option period because we were concerned about which way the market was headed.