Here's the special twist about option contracts. The contract is transferable. The buyer with the option can sell that option contract. This is actually better than buying and selling the real estate, because such a tactic will involve two sets of closing costs. By selling the contract to a prospective buyer, the investor avoids all the real estate transfer stamps and closing costs.
For example, let's say that Ronald buys an option on a 4-flat for $200,000. A month later, he finds Albert who is willing to buy the property from him for $250,000—a $50,000 profit for Ronald. Ronald can do one of two things:
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