How to Attract Investors to Assign to Your Deals

Hi Sully,
I’m very new at this and of course have a lot of questions. If you can help me out I’ll appreciate it.
-How or where you guys get or find those deals?
Let say for an instant I found a great deal, now do I need to do any paperwork in order to secure this deal?... if so, where can I find those documents? … Do I need a license in order to do so?
Once I have all of this done then I need an investor willing to buy this property right...
Let say I also found an Investor in CL like everybody else… How do I prevent this investor to go over me and finish buying this property by himself without giving me a single penny?
Sincerely,
Federico

I want to share a new way to find Investors to assign deals. I recently took a course called Real Estate Investor 2.0 where I learned how to find Investors. The most productive was creating a facebook page. I created a facebook page and was able to build my buyers list dramatically. Once you create your facebook page join all of the Real Estate groups in your area and start sending friends invitations to the people in the group.

I was able to build my buyers list from 50 buyers to over 200 in 1 week.

Just a little FYI for my DG family

Carol,

Would you let me know where i can find your ads in Facebook so that i can get an idea of where you post, what your ad consists of and other ideas. I am completely new to Facebook, so any heads up would be appreciated. I am in need of building a buyers list and i'm not having too much success on Craigslist.
Please help me.
Thank you.
Mati

Hi everyone,
this is my first time here, I would appreciate ALL advice or help you can give. I just lost my job, my unemployment will soon run out.so I jumped in and made a seller finance offer on a duplex, my first try we negotiated a deal. the property needs work but I feel I can get it rentable in @4 weeks I moved into 1 unit already(I got evicted from my previous dump) it will bring between 200 and 250 positive cash flow after all contract expense taxes ins etc.My credit is @500 it sucks.I want to establish a line of credit or refinance for investment capital.there are a ton of multi unit and single family properties in my area that need work for real cheap, i can do it all myself easily but need start up cash, material money, etc. I would like to build monthly income rather than flip, but I am open to any strategy that wil get me going, any thoughts?

Hi everyone,
this is my first time here, I would appreciate ALL advice or help you can give. I just lost my job, my unemployment will soon run out.so I jumped in and made a seller finance offer on a duplex, my first try we negotiated a deal. the property needs work but I feel I can get it rentable in @4 weeks I moved into 1 unit already(I got evicted from my previous dump) it will bring between 200 and 250 positive cash flow after all contract expense taxes ins etc.My credit is @500 it sucks.I want to establish a line of credit or refinance for investment capital.there are a ton of multi unit and single family properties in my area that need work for real cheap, i can do it all myself easily but need start up cash, material money, etc. I would like to build monthly income rather than flip, but I am open to any strategy that wil get me going, any thoughts?

Hi, i am also new, I looked on realtor,com searched in my area. found a property that needed work for cheap ,called the agent,loked at it, made a offer with seller financing 100% thatI could afford, we negotiated a deal in about 2 hours. I have no job no credit, this all took place the same day,on the first property i looked at.just jump in, the worst that can happen is you learn something.

Does any one have ANY incite on this matter???

Regarding your first question:
"I have a friend who is very near having his home forclosed on. With the incite of "THINKING CREATIVELY" I think I may be able to help him. He has about $150,000 in equity in his home and his bank won't refinance because the house has depreciated in value and his mortgage now is worth more that what the home is currently worth."

What you could consider doing is contacting the bank and asking them to consider doing a short sale on the property. Let them know what the FMV is on the property, what repairs it requires and what you think is fair to offer for the home. They may take a few weeks to get back to you with their response. If you are not familiar with dealing with Short Sales, maybe find a realtor or attorney who could put the package together for you. This will at least give you an opportunity to purchase the home before it goes into Foreclosure and for bidding.

Question 2:
"Could I buy (or lock in on contract) his property for his outstanding mortgage and sell (or assign the contract) it back to him for a small profit? That way he doesn't have his credit ruined and he can get a new mortgage at these historically low fixed rates."

Most of the time, banks that are dealing with Short Sales or Foreclosures, don't like "assignment of contracts", and if in your case you are showing your end buyer to be the original home owner, i think you will get turned down. What you might want to do is purchase the home yourself and then lease option it back to him. He could pay you enough to cover the mortgage and a little extra for profit and then in a year or so he could exercise his right to purchase the home from you. This method would allow him to save his credit, still have a place to live currently and still own the home in the future, once he gets back up on his feet and established.

Another option would be if you wanted to do some seller financing. You could own the deed on the property, they would pay you the monthly mortgage until it is paid off. This is a good method if you want to avoid selling a property outright and having to pay capital gains on it.

Good luck. I'm still waiting to do my first deal, so you might want to consult with the others before taking my advise to heart.

Mati

Beware of using the Exit Strategy of Curing the Default for the Homeowner, Then L/O the home back to Him/Her, This is a VERY Risky Strategy, I know a LOT of Investors that have Got "Burned" trying to HELP the home owner(s) out this way. If you are going to do it make Absolutley Sure that the Home owners Situation is a TEMPORARY One and NOT a "Cronic" Situation, SULLY

Thanks Sully. I of course don't know EVERY detail, but I've known him for a while and he's always seemed like he has it together. With the market though... (???)

I'll be sure to get more details.

Hi everyone. There is so much great information on this site! Thanks to all of you who have given us "newbies" so much helpful info! We have found several great investment properties and we have a pretty good buyer's list. Our problem is that all of the homes we are interested in are bank-owned. We have heard again and again that banks DO NOT like assignment of contract. We have no money to purchase the props and re-sell them, so we were wondering if anyone had any ideas of getting around this problem! Thanks in advance!!

"We have heard again and again that banks DO NOT like assignment of contract. We have no money to purchase the props and re-sell them, so we were wondering if anyone had any ideas of getting around this problem!"

One method that has been suggested to me by other investors and RE agents in my area is to create a land trust and submit your offer to the bank in the name of the trust. If the bank accepts your offer you as the trutee can transfer the property to another buyer without a formal closing because property held in a trust is considered personal property and not real property. I have not yet used this method myself because the properties I have purchased so far have not been REOs. But I do personally know several real estate agent/investors who have and they had no issues with the banks accepting their offer.

Anyone out there every used this technique with bank REOs?

Tony

I pasted the definition of a land trust from Wikepedia down below:

This sounds like a terrific vehicle to hold real property in, just look at all the pros of owning real property this way.

The only thing I find confusing is the 1st sentence in the 1st paragraph where it states the the "trustee" (buyer) agrees to hold the real property FOR THE BENEFIT OF ANOTHER PARTY (the beneficiary). I am not too sure what to make of this terminology. If we buy a property under the name of the land trust, why is their a beneficiary??? Everything else seems self explanatory. I think I will run this by an atty I know and see what she makes of this because this seems like a great way to buy properties and then "interest can be transferred quickly without recording a deed" as noted at the bottom. There are so many pros, just want to understand the 1st sentence. And I don't see any cons that jump out. Wonder what the tax implications are? Thanks for the post. Like you said, would love to hear from someone that has done this or has knowledge about land trusts.

Neil

Here is the definition:

A land trust is an agreement whereby one party (the trustee) agrees to hold ownership of a piece of real property for the benefit of another party (the beneficiary). Land trusts are used by nonprofit organizations to hold conservation easements, by corporations and investment groups to compile large tracts of land, and by individuals to keep their real estate ownership private, avoid probate and provide several other benefits.

A community or conservation land trust is an organization established to hold land and to administer use of the land according to the charter of the organization. A land trust is a useful way to manage complex divisions of the Bundle of Rights that people can own in real estate, and can be used to manage something as large and complex as a multi-state REIT, or as common and small as a single-family home.

Corporations sometimes set up land trusts when they want to compile large tracts of land without arousing suspicion or alerting people to their plans (which would cause the asking price to rise). For example, the land for Walt Disney World near Orlando Florida was put together by using many land trusts to buy smaller tracts of land.

Individuals use land trusts mainly for privacy and to avoid probate. No one knows what one's bank balance or stock investments are, yet anyone with an internet connection can look up a person's real estate holdings. A person who has an auto accident or a doctor who accidentally injures a patient is a much better target for a lawsuit if he or she owns real estate investments. So some investors buy their properties in land trusts so their name does not appear in the public records. The land trust also allows the property to immediately pass to their heirs at the moment of death, rather than go through a long probate process.

Some of the other advantages of land trusts for individuals are:

Sales price of the property can be kept off the public records
Property taxes are lower if the purchase price is kept private
Judgments or liens (such as IRS liens) against an individual's name are not a lien against their land trust property
Partners can more easily continue a project if one dies or is divorced
Interests can be transferred quickly without recording a deed
Managing a rental property is easier when the trustee can be blamed
Negotiating a purchase or sale can be easier when the trustee can be blamed
Liability on financing can be limited to the assets of the trust

Ok Here is some data on land trusts. If you're going to buy a property through an REO agent to wholeasle. The most effective way to do this is by using a Land Trust. I'm told it is pretty simple. Here's how it works, if you are buying a property at 1313 Mockingbird Lane you write the offer in the name of the 1313 Mockingbird Lane Trust, and you (John Doe) are the Trustee.
And you sign your name at the bottom of the offer John Doe Trustee. Whatever your name is. So you take title in the land trust (as in the example above) and then the next day or whenever you go to your wholesale buyer and you sign him as 'my beneficial interest in the trust'. Again you're going to sign the Beneficial Interest in your land trust over to him. He pays you your assignment fee and closes on the deal.

Now some banks will not let you close in a land trust and if they don't - here's what you do, you make the offer in your own name or you could use your corporation name and at the bottom of the offer you write this: VESTING TO BE DETERMINED AT CLOSE OF ESCROW.
Now if you are asked what does this mean here's what you say, Well, I don't really know how I'm going to take title yet. I may take title in my LLC or I may take title in my land trust, I may take title in my own name or I may take title in my partners name or maybe my corporation's name. I don't know yet. And usually they do not have a problem with that.

Great suggestions on how to get around purchasing REO's when "and/or assigns" will be more than likely rejected/questioned. However, my question to all of you out there is how are you showing proof of funds at the time that you submit your Purchase Contract for the REO property to an agent, lets say. You might go the route of doing it under your LLC, a new Land Trust, what ever .... this jut eases the task of later assigning it to Mr. Investor, but how are you showing that you can pay for this if Mr. Investor is still not on board and you have to market property to get it sold.

Suggestions my friends,

Mati

Mati,

Go to Coastal-funding.com. They atre an HML that will "rent" you all the money you need (of course for a price based on asliding scale (deals under $1 Million are 2 pts + $595 processing fee). Invoke the tab on the left hand said "Proof of finds" and fill in the blanks, name of your LLC (or your name), amount (s/b purchase price) and address of property being purchased.

You show this letter to the bank to show that you have proof of funds for the entire purchase price. I also asked a few questions regarding if you can still use this letter even if you don't end up using them (say you are doing an assignment, you will not need to use them for this type of transaction). From what I have heard from other threads, you can ALWAYS use this letter to show proof of funds to a bank/seller and then proceed with any way you want to handle the deal. If you decide to use Coastal there 1 main caveat is that they REQUIRE they be paid back the same day they "rent" you this money. Matter of fact, you have to have your end buyer picked out and they have to show proof of funds that they can buy the prop from you (they might have to have the funds already escrowed...I am not sure).

Now you have to do 2 closings the same day. The 1st one is between you and the original seller, whereby Coastal will wire funds to the title/escrow co to secure this transaction. The key here is that this transaction needs to take place say at 9 am so you can then do the 2nd closing that afternoon (say at 1 PM) with your end buyer and you as the new owner.

Voila.......here is your proof of funds!
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Michael B,

I see you are in the bay area. I live in the east bay. I will PM you so we can chat offline.

Thanks for explaining the step by step procedures as to how to use a land trust to purcahse props. The 1 question I have is does the bank require that you to know who your beneficiary is when you are locking up the deal with the bank. I would hope not since we would need to shop around for an end buyer (say 30 days). Can we say something like "beneficiary to be named at time of closing" or something similar? I wonder how the bank will feel about this?

And I have seen the clause "vesting to be determined at time of close of escrow" in previous threads,. I think this is a great clause to use.

Just curious, if the banks allow this verbiage, it almost sounds like all you need is an LLC, becuase you can tell the bank that you haven't made up your mind if you are using your LLC or purchasing the prop under your name. But after all the reading I have done on land trusts, I don't understand why ALL investors don't use this technique. It seems to have a lot of advantages. would like to know what some of the disadvantages are i.e. tax implications, etc.

Sorry for the long thread! Look forward to your responses.

Neil

Hey Amy, Sistreat has some great info. to guide you around this issue.... You should PM her with your questions??? Shalom!

Not only Facebook, which I planned to use next week as one of my ads, but YouTube, MySpace and Ebay???? You may need to review their terms/agreement before placing your ads, but utilizing the E-commerce system is the way to go.... Shalom!

Christopher, Thanks for the additional data on building a buyers list. Good to know.

Neil asked, "The 1 question I have is does the bank require you to know who your beneficiary is when you are locking up the deal with the bank?"

To the best of my knowledge, the answer is 'No'.
One thing with dealing with a bank owned property (or auction properties as well), you can tie these up with no money or no credit and you could wholesale them to other investors using the Land Trust. As explained above in my post. For more info on this PM me. Although I do not come to this site everyday but I will answer you as soon as I can

I am a NEWBIE to facebook, but I will get on that IMMEDIATELY.

Thanks for the advise free...

When you tie up a property under contract with the intention of assigning it to someone else, you do so by placing your name in the buyer's line and or assignee. You are not acting as an agent in any way. It is exercising your right to purchase the property or sell it to someone else. That is why your name goes in the buyer's line. That would not be so with an agent. An agent has to specify that they are the agent.

hjmac1219

1.) What does escrow mean?

2.) What is equity and how is it calculated?

3.) Do I need either a title company familiar with assignments or a lawyer or both?

I want to start wholesaling houses in ohio. do you know if its illiegal here or a way I can find out? thx

how do i get access to all of website? do i have to buy book at phone no. on tv ad or can i simply buy book for $19.95 on this web site?

How do i get started? I have not purchased book as yet. Can i buy book off this website or do i need to call phone no. given on tv ad?

kwhartford12 You can buy it here, Go to the home page and scroll down. Look on the right side and you will see the books. click on the one you want and add to cart.

You say it is illegal in some states to assign contracts. Does anyone know what states it is illegal in or where to find out??
I am a newbie, like many other people and I have been reading on this forum for hours trying to figure out how to get started. The information is GREAT!! There is so much to digest. How can one keep his head on straight??
How does one know where to start??
I see you post on craigslist,etc to find buyers. Then you go out to find houses,under market value, to assign to them. Is this correct??
Then, what is the next step?? What kind of paperwork,etc??

Hey Everyone - In one of these threads, I asked Jason (I think!) to list the banks' REO websites and I can't seem to find it any more.

I know this is a bit of a nuisance, but if anyone runs across that post, can you point me in the right direction. I know that a lot of us visit the same threads, so I was wondering if you guys can help me out.

Thanks.

Hi cbrpower:

Thank you for your very encouraging comments. You really blessed me!
If you have any more information that'll be helpful that you don't mind sharing would you please email me at

birthright4@****

I would appreciate it very much. I'm a newbie at this and I'm just getting started. And I am as nervous as heck!

Hello,

I am a newbie in Deans program and am really just now getting all of my processes in place so it will be easier going forward. I am learning every day and am thankful for this site and this new found opportunity I am pursuing. Keep up the good comments they are appreciated. JUST DO IT!

Marie