Option Purchase
What it is
You reserve a property during renovation by paying a nonrefundable option fee that is applied to your purchase price at closing. We finish the rehab to rental HQS standards and deliver a rent‑ready, city‑certified asset. You get built‑in equity by locking the price before completion.
How it works
Select a property that is in pre‑renovation or mid‑renovation.
Sign an option agreement and pay the option fee. The fee applies to your purchase price at close.
We complete scope to rental HQS standard and pursue city certification.
When deliverables are met, you close at the pre‑agreed price.
Typical timeline
60 to 120 days. Most deals land near 90 days from option to close.
Deliverable
Rent‑ready property, city certified, rehabbed to rental HQS spec. These are clean, durable rentals, not high‑end flips.
Pricing and return profile
Purchase price is typically 10 to 15 percent below ARV at delivery.
You start with equity on day one. If you finance, your starting LTV is stronger.
Cash outlay and exposure
Option fee: a few thousand dollars, applied to purchase at close.
Holding risk: your fee sits for the option period. Exposure is limited to the fee plus any third‑party costs you choose to incur.
Risks and how they are handled
Seller or title delays. If the window in the contract is exceeded, you can extend, pivot to a different property, or take a fee refund if the agreement provides for it.
Rehab or city certification delays. Same remedies as above per contract.
Not a flip spread. This model is built for buy‑and‑hold investors.
Best for
Investors who want a simple path to forced appreciation without managing construction.
Buyers targeting stabilized rentals with day‑one equity and stronger LTV.
Not ideal for
Short‑term flippers. The discount is designed for hold economics, not a quick resale after closing.
Buyers who want to control all of the factors in their property finish. The deliverable is a rent ready city certified property.
Documents typically used
Option Agreement
Purchase Agreement triggered by deliverables
Scope outline and finish level (HQS rental standard)
City certification requirements summary