From Greg Wilson, chief analyst, The Legacy Portfolio: It’s your dream home. But it’s listed for $500,000… $100K more than you’re willing to pay. The seller isn’t interested in your offer.
So, you come up with a creative solution to keep yourself in the game…
You offer to buy the house for $400,000.
But to sweeten the deal for the seller, you add this carrot: The seller can accept your $400K bid at any time over the next year.
The seller likes this because it gives him time to try to find a buyer who’ll pay more for his house. It also gives him reassurance he’ll still get money from you if he can’t find another buyer.
But in exchange for this new contingency offer, the seller must give you $5,000. And you get to keep this $5K… whether or not you end up buying his house.
Now, if the seller agrees, one of two things can happen…
- Sometime over the next year, he’ll agree to sell you the property at your initial asking price of $400K.
Maybe housing prices will fall dramatically… or he’ll need to move quickly… or he just won’t find a buyer willing to pay more.
In either case, you’ll get the house for $400,000. Plus, you’ll get to keep the $5,000.
- He’ll never sell you the house. Maybe he’ll find someone who’ll pay his $500,000 asking price, or he’ll decide not to sell at all. Still, you’ll get to keep the $5,000.
So, while you didn’t get the property you wanted, you’ll generate an easy $5,000 in income.
This is the essence of the new Legacy Portfolio options strategy.
Except, instead of making an offer on a house, we’re making an offer on our Legacy stocks. We can use it to acquire our favorite Legacy stocks at discounts. And we can collect additional income while we wait.
Behind the scenes, Mark and his broker, Dominick, have been testing out this strategy on Mark’s Legacy portfolio. The results are impressive.
To date, Mark has generated over $150,000 of options income. It’s boosted his total returns by 2-3%.
Remember, our goal is still to buy the world’s most elite businesses at great prices. Then, we’ll hold for the long term, letting our money compound.
This options strategy merely provides us a way to generate cash while we wait for the market to offer us better entry prices.
Reeves’ Note: The Legacy Portfolio is now closed to new members. But if you’re interested in learning the Palm Beach method of safe options trading, consider Palm Beach Current Income (PBCI).
The PBCI team has racked up a 98.2% overall win rate since the service was created in 2012. The average annualized yield is 16.7%. And for a limited time, we’re offering an unprecedented performance guarantee. Click here to learn more.
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