Real Estate Options with Expert, Bill Tan

By Christina Suter on Apr 26, 2014 at 09:09 AM in Real Estate Issues
Real Estate Options with Expert, Bill Tan

I recently had the pleasure of interviewing real estate expert Bill Tan, and he discussed using real estate options. Bill presented about options at my monthly real estate meeting called FIBI (For Investors By Investors) Pasadena. During the FIBI meetings we invite experts in the real estate industry to come and educate on their area of expertise. Meetings are held at the Courtyard by Marriot in Old Town Pasadena and we meet every third Thursday evening. If you want to know more then you can find the meeting on Just type in FIBI and look for the Pasadena Chapter. Given the depth of this presentation I thought it would be a great fit that he talk about options on the show.

Bill offered his first single-family properties as a lease option to give his renters a chance to purchase them from him. He found that when time to purchase came, buyers didn’t have the money. Bill, not wanting the properties back, helped finance the sale of the properties and took back seconds on the properties. He then found other investors who were in a similar situation so they took back notes on the sale of their properties and Bill bought their notes at a discount. Bill considers himself a transactioneer (a transaction engineer), which means he uses technician strategies to put together deals that most people wouldn’t see as an opportunity. Bill Tan Investments buys, sells, and exchanges real estate and mortgage investments for themselves and their clients for profit and cash flow. He finds deals and uses transaction engineering to put the deals together.

Bill uses options frequently in his real estate decisions and defines an option as a contract by which a landowner gives the future buyer (the optionee) the right to buy their land at a fixed price at a specified time. If the buyer wants to purchase their land at any time, they are allowed, whether the price goes up or down. This unilateral, underutilized agreement leaves the control in the hands of the buyer because they get to decide whether they want to purchase or not and the seller must sell.

Many contracts have a segment in them in the form of a contingency clause so that buyers have the option to pursue the deal or walk away from it with no risk. Options are used to borrow money against or to flip homes, where people purchase, fix up, sell it, and pay the buyer off. There are also lease options where you rent the property, have the right to buy today or tomorrow for a specified price and you control the property for a long period of time and have the option to purchase it in the future. There is also a sandwich lease option where you can lease at one price, rent it at a higher price and give the renter an option price that’s higher than the one the owner charges. Another big option being used right now is asking the city how long and how much to build on a vacant lot and the builders 

Bill believes in and uses options often because they are powerful and malleable. Bill can be reached at 760.634.0492 or by email at [email protected]  

Honestly, it would benefit you greatly to listen to the show. There is so much content and knoweldge that it can not all be captured here.