Putt and Call options

[WebBoard]

From: Sam Coster


Can anyone help me.
i am trying to prepare some Putt and call
options, but the only person who has them has
sown them up tight. intellectual property and
all that.
My solicitor and accountants are working on
it but, but it seems there are twists and
turns we are not aware of.
We are trying to purchase Putt and Call O for multiple
Units of the plan in NSW.
Samc
Enjoy the journey, its half the fun.

 

[Robert]

Reply: 1
From: Robert Forward


Hi Sam

Just a quick question. Why would you be taking out options on units in an over heated market??

If the units aren't worth the purchase price when they are finished what will you then do with them???

I'd be interested in your thoughts on an "out" strategy for this issue should it arise.

Regards
Robert

 

[WebBoard]

Reply: 1.1
From: Sam Coster


It all comes back to due diligence.
We would not think of purchasing units in an
area of glut.
Believe it or not there are places in and
around Syd. that people want to live in.
If you buy right, with a reasonable discount
and and the period is long enough there is a
minimum of at least 12-15% margin, and if the
market falls that far we will all be in the
same bucket.
Samc
Enjoy the journey, its half the fun.

 

[paulzag]

Reply: 1.1.1
From: Paul Zagoridis


At the peak af the 1991 boom I had a property valued at $130K. It was sold in the 1992 bust at mortgagee auction for $72K (valuation was ~$95K). That's 25% below value and 45% below peak valuation.

10-15% is what at market overshoots if you are lucky. A 10-15% safety margin is good in a normal market. Caveat emptor.

Having said that I don't think median suburb prices in Sydney will come off too dramatically whenever the correction happens this time. But bargains will be easier to find.

Also Sam, if the Put and Call package is tied up so tightly why not retain that lawyer? I am normally happy to become a client of a firm whose intellectual property makes me money.

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz