I did it!!!!! My first $10,000.00 assignment!

I knew you could do it. That is awesome! Now go out and find another deal!

Congratulations girl, great job! I'm so happy for you. Can you tell us what you did? Did you need credit or money? Other new members would really benefit from your experience. Thank you for sharing your wonderful news with all of us, like CBR says go do another one!

I still have 2 properties locked up and I went to look at a deal tonight. I have only just begun . Wow what a ride!!!!

here is what I did for this deal...

I called rental ads and asked the owner if he would consider selling the property if I could offer him cash and close in 30 days. He said that he would not only sell this one but he had 3 more he wanted to sell. I am telling you call the "for rent" adds in your local paper. Most of them are people who cannot sell their house in today's market and are trying to rent so they can continue to pay the mortgage.

I also put an add on craigslist that said "Investor needed for multiple investment properties" You would not believe how many calls I got. I built my buyers list in leaps and bounds overnight.

My husband and I went to look at the properties that we inquired about in the rental adds. We did a cost evaluation (copy of one in Dean's book) on each one. before we went I researched the property to find out how much it was last sold for. This gave me a good idea of how much negotiating I can do on the price.

One of the properties was a four unit quadplex for $249,000.00. We spoke to the owner and found out that he had to get the full amount because he had taken out multiple loans on the property and had to pay them off. I locked the deal in 3 days later for the full amount. No money down!

I added $10,000.00 to the price and called my investors and offered the property to them at $259,000.00.

I assigned the deal 13 days after I locked it. Tomorrow morning I will take both contracts to a title company here that does assignment deals and they will take it from here. The investor is prepared to settle within 2 weeks.

I WILL GET A CHECK FOR $10,000.00!!!

I still can't believe it's for real!

I must thank cbrpower and Rina for walking me through this deal. You guys are AWESOME!!! Thank you!

YOU did it! Woo-hoooo!!!
Like you said, THIS IS JUST THE BEGINNING!!!

Love ya and so proud,

Rina

Carol, in your previous post you didn't mension at what % of ARV you bought the propery for? You had said "the owner had multiple liens on the quadplex and needed $249,000", when you ran COMPS on this property, what was the difference between ARV and what you SOLD it for? This information would be good to know for various reasons, so we can see what FORMULA was used?, SULLY

The ARV on the property is $439,000.00. I had my realtor run comps on similar properties that recently sold in the area. The closest comp was another quadplex that was exactly the same only it had garages for each unit instead of off street parking. That property recently sold for $469,000.00.

I sold the property for $259,000.00. It needed aprox $30,000.00 in repairs. So after closing costs etc... the investor will have aprox. $139,000.00 in instant equity. The rental income on this property is $3,500.00 per month.

I am still new at this so I hope this answers your question Sully.

Carol,

I'm happy for you.I'm right behind you. I can't wait to post the same news. You're right about all the help that everyone contributes here, they're great!.

How much money did you lock the deal up with? You said you gave full price, and added $10,000. How much profit was left for your investor?

Congrats,

Bob

That is SOOO awesome. Congrats!!!! Be VERY proud of yourself!!!

Hi Bob,

I locked up the deal with no money down. The investor received instant equity of $159,000.00 ( after repairs).

If I did it you can do it!! I can't wait to hear info. on your first deal!

Carol,

How did you lock it up with no money down? That's what I need to do.LOL

I'm trying to work on a deal right now from an ad that I put on Craigslist. It's a tricky one and I'm not giving up. An investor contacted me to assign a short sale to me.He's trying to lock it up and assign it to me,which I want to assign it to my investor. I don't know how this is going to work out!

I'm going through the forums for info to see if I can make this one happen.

Thanks for the words of encouragement.

Bob

Carol I am so inspired by you - (and of course everyone on this site) Doing this kind of deal is so 'out of the box' for me - but as always everyone here makes me realize anything is possible for all of us if we put our minds and time into it. I absolutely LOVED every minute of work on my first fix and flip deal and have offers in on three other places at the moment, but I am really going to step outside my comfort zone and explore assigning. Thanks so much for sharing!
Laura

Hey Carol,
I feel your excitement SO MUCH, it is getting ME excited. I am SO happy for you! You are really on a ROLL! Congratulations!!
_________________________________________________________________

Michael B

This is great! I am so happy for you!

After you've put in the effort and it pays off, looking back it almost seems easy now, doesn't it?

Once you break the ice with your first deal, they start falling together a lot easier after that!

Also, your investor must LOVE you right now, because you got him a GREAT deal based on those numbers... he's probably as excited or more so than you, which is great, because you've just landed yourself a premier relationship with an investor!

You know, there might be someone to offering up a great deal without taking as much as you as can on the assignment in terms of relationship building. I say this because you could have likely gotten more, but it seems like that extra money on this deal had you pressed it will be nothing compared the money from the continued opportunities over time!

Keep up the great work! The team is very excited that there are people who are able to see this market for what it is, a huge opportunity, and they are pulling out profits as proof!

The window on it being a free for all in terms of insane deals won't last forever. It's the chance of a lifetime to have virtually ground floor opportunities all over the country. The big investors know this, we know this, and that is why money is being diverted to real estate market in droves for DEALS like these.

Let us know when the deal closes!

Don't forget to start planning to do your own investing with some of the profits!

I just hope everyone has a chance to pick up a great deal, especially one cash flowing, of their own while the chance is there!

Also, I believe there is some new tax incentives right now that can be structured to eliminate a lot of the tax on assignment profits through buying real estate. I'll try to go back through my notes, but I saw a good writeup on shifting that burden via phantom losses and other techniques.

Just wanted to add....That you did a wonderful job and theirs a reason why your deal got passed on so quick, no investor would pass on an Instant Equity of $159,000----When you come across a deal like this again, i just want you to know that you could have made $20,000-$30,000 easily, maybe even more, In this type of situation if you didn't want your "end buyer" to see how much money you were making you could just do a "DOUBLE CLOSE", you'll pay a little more in CLOSING COSTS, however your payoff is MUCH BIGGER, non the less, you did a GREAT JOB, SULLY

Sully, I am still not educated enough about double closings. I thought that I would have to be approved for the purchase before I could do closing #1 in order to go to closing #2. The whole double closing process confuses me. I guess I will learn over time.

I know that I could have gotten more for this deal but I am still new at it and I will learn how to be more aggressive as I move forward. I have built a relationship with this investor that will bring me in much more money in the future so I do not regret only getting 4 % of the deal. To Me this $10,000.00 is like getting a million. It feels great!!

Thanks for the encouragement and teaching.

How do I know how much of an assignment fee to add to the wholesale price? Is there a formula to use?

There is no strict formula. Everyone has their preference. Some might be prefer just to make a quick profit by pricing it really well as opposed to ensuring they get as much as they can. Some will shop it.

Once you do more deals you'll find what margin maximizes your profits.

Like I said, in this deal you may have been able to get more, but then again, an extra $10k could have made the investor not analyze the numbers and you'd have nothing. The relationship is worth WAYYYY more than an extra $10k. You did great, bottom line.

In the future, look to price the profit around 10-20% conservative instant equity. Use the upper ends depending on the deal, and go highest depending on the cash flow (not just amount, but long term stability and such).

Great job Carol! Now start a deal streak that makes us all drool! You are position for it nicely with this investor!

I have not done one of these, but I have thought about it a lot. I think I would figure that the end buyer would want a percentage of equity in the property if they were going to buy. Say that was 30% so they could do 100% financing. Determine the ARV, subtract repairs, take 70%, and offer the property for that amount. The amount between your offer to seller plus your costs (if any), and your sale price to the end buyer would be your fee (profit).

I would like to hear how the veterans do it.

Great move on calling the for rent ads! You never know until you ask. Great job!

Calling the for rent ads has become a regular thing for me now. I am actually finding great deals and motivated sellers. Hey whatever works right?

You did great. You know, we are all proud of you and look forward to bigger and better things from you and me likewise. God Bless.

Sandra

This is sweet. I am so happy for you. God answers prayer. This, I trust, is the first step on a long journey of REI accomplishments. I just added Pro 3:5,6 to my REI scripture file. Check it out, follow it, and may you duplicate over and over what you have just shared with us. Pas. Greg. May God's riches blessings be upon you along your REI journey.

In reference to Al's question on using certain formula's for purchasing property, i cant speak for everyone else, but the truth is: I use SEVERAL DIFFERENT FORMULA'S depending upon the buying senario, let me re-phrase that, the FORMULA stays the same the only thing that changes are the NUMBERS in the FORMULA, and what i mean by that is this: If i'm looking at a property that's owned FREE & CLEAR and the homeowner is NOT willing to "OWNER FINANCE" the property(or be flexable on TERMS), then i would be looking at an offer like this: 60%-70% x ARV -REPAIRS, -ASSIGNMENT FEE= MAO
This is the FORMULA that i'm currently using in my market, now if i were in a SELLER'S MARKET or if the SELLER were offering TERMS i would be adjusting my numbers accordingly, SULLY

Thanks Sully, but I think Carol's question was how to establish what dollar amount the assignment fee would be.

Al

Oh, i thought you(Al) had asked how the "veterans" do it, meaning how they came up with there offers, my bad, SULLY

I understand the misunderstanding. How do you go about determining how much of an assignment fee you are going to add to the deal?

Al

I have been adding 4% of the deal as my assignment fee. I do not want to get greedy because I am more interested in building a relationship with the investor. I figure if I stay at 4% the investor will consider future deals with me. Realtors get 7% but they split that 3 or 4 ways right?

4% sounds reasonable. A Realtor would get about 3% for bringing a buyer to the seller.

Al