assigning a deal

I have contacted a few of the ads "I buy homes" I talked to them and they told me the general areas that they are interested in...my delima is...my realtor is sending me many homes well below FMV, however I am unsure how to match a property with that investor. Do I go out and put many offers on many properties in the hope that he wants to let me assign the contract to him for a fee? He wants me to give him the addresses up front...Or can I ask him to sign a non-circumvent agreement prior to me placing a contract on a pecific property and once he says he wants property "A".... I then lock it up in a contract?

In your process...Once you assign the contract to the investor...when does the investor pay you the difference between the seller's price and the amount you sold it to them for? And how do you calculate what % to charge above the seller's amount?

I am so confident this will be a great thing in my life...I just need a little specific direction to get to my 1st deal with Dean's program!

Thank You,
Christina

Great assignment of contract questions.

Here are a few items to cover:
1) Never (in my opinion) give an investor information on properties before you have them under contract. The reason is it is too easy for them to go around you and tell you how much you will be paid. Instead put an offer on the property below their criteria then present the property to the investor.

2) You should know if the investor buys from assignments of contract. If not you need to find out if they will.

3) General profit (as my suggestion) for an assignment of contract is 10-12% of the equity you provide for the investor. For example if you put a property under contract for $60,000 and the house is worth $100,000 I would look to make, as a minimum, $4,000 to $5,500 for a fee.

4) The fee can be paid before closing (my preference) or after closing - this is something you will want to discuss with the investor up front. Keep in mind that sometimes if you get paid upfront before closing you may make less. The reason is the investor will be taking on risk giving up money before the deal is completed and finalized.

Where do you go to find buyers once a seller is found at an agreed upon price and do you trust the buyer if it is out of town?
Also in today's RE market it is fairly easy to find distressed seller/home owners, the key here will be negotiating then contacting a buyer/investor you can trust because do the buyer need to know the area before commit?

thank you,

JG

Do the house have to have a good equity for you to be able to make a good profit on it? If it can someone break it down for me? Do you got to have an LLC in order to assign property?

I had a meeting today with a mortgage broker that stated to me that assigning a property to another investor or buyer is acting as a real estate agent, which I do not have a license and is against real estate laws in Kentucky. Buy signing the "Investor Disclosure Statement and Seller's Acknowledgment" or a "Purchase Agreement" with assigns is acting as a real estate agent and could carry at very least a fine and/or jail time since property is never actually put into my name. Does anyone have input on this issue or know Commonwealth of Kentucky law on this issue?

Because contract rights are considered property, they can be transferred to others just like a piece of property such as a home or car.

Let's say you have a contract to purchase a number of items each month from a dealer, at a certain price. The contract runs for a year. You then decided the product is no longer working out for you, and you'd rather not buy any more. As long as your contract allows it, and it is legal to assign the contract , you can just find someone else who wants to buy the same number of items each month and "assign" your rights and obligations under the contract to him.

Most contracts permit an assignment as long as the other party to the contract approves the assignment. And many contracts require the other party to approve of an assignment as long as the assignment is "reasonable," meaning that the assignment won't jeopardize the security
of the other party or increase the other party's risks."

So in conclusion, what I have shared with you is that once you have a property locked up, all rights of the contract is considered "property" and therefore under your control. Therefore you reserve the right to do what you want with it. Assigning your right to purchase the property
once it is locked up is your right. (lawyers.com)

“When we have the right to buy (purchase & sale agreement from the seller to us), we have the right to sell” Attorney William Bronchick – real estate lawyer and also investor. Make sure you put an option to assign on your contract. Options can be sold or exercised.

When you sign a purchase agreement with a seller simply put and/or assign next to your name. This will enable you to assign the contract to another buyer.

As far as acting as a Realtor, I have posted this on my blog "Realtor or Wholesaler... what's the difference?" it may help answer some questions.

do you need a real eastate licence to assign properties?

I am working on my very first deal and I presented the purchase/sale agreement to my seller. I have told him of my intentions to assign this property to another investor, etc, etc, etc,....He asked to take the paperwork to his attorney and she says it's illegal, we could "both end up in jail" because I would be "acting as an agent". When asked if he'd pursue this assignment with another closing agent who is familiar with it, he repectfully declined saying he'd have to take his attorney's advise. He's supposed to be getting back with me about her doing a double closing, but no word yet....

Why is there SO MUCH controversy about this technique if it's being done all over the country????? Why, why, why????

One way to get out of a contract is what's called assignment, which
is finding someone else to take over your obligations. Because contract
rights are considered property, they can be transferred to others just
like a piece of property such as a home or car.

Let's say you have a contract to purchase a number of items each month from a dealer, at a certain price. The contract runs for a year. You then decided the product is no longer working out for you, and you'd rather not buy any more. As long as your contract allows it, and it is
legal to assign the contract , you can just find someone else who wants to buy the same number of items each month and "assign" your rights and obligations under the contract to him.

once you have a property locked up, all rights of the contract is considered "property" and therefore under your control. Therefore you reserve the right to do what you want with it. Assigning your right to purchase the property
once it is locked up is your right. (lawyers.com)

“When we have the right to buy (purchase & sale agreement from the seller to us), we have the right to sell” Attorney William Bronchick – real estate lawyer and also investor. Make sure you put an option to assign on your contract. Options can be sold or exercised.

Also there is a big difference between a Wholesaler and a Real Estate Agent.
Real Estate Agents have a license to sell real estate because according to the law you need a license to sell real estate. Wholesalers do not need a license because they are not selling real estate they are selling their rights to a certain real estate property ( the contract). Because contract rights are considered property, they can be transferred to others just like a piece of property such as a home or car.

One more thing... There is so much controversy because people do not understand the facts in regards to assigning or wholesaling for that matter. Every one in the Realtor world gets defensive because they feel you are selling houses without a license. In reality you are selling contracts not houses. You don't need a license to sell a contract. It is this ignorance that is the reason for the controversy.

Hey, thanks for the clarification. And by the way, I'll say it again...I love your blog!

I am new to this site and have read hundreds of posts the last few weeks. My eyes are straining, lol. Anyway, your answers put me at ease so much. I just want to say thank you to you, among all the others of the DG family. Excellent job.

And btw, I have searched on here, on many websites, and trying to find the proper Assignment Contract for California. Any ideas...? Without paying an attorney to do so or paying online fees for it, can I use the one on this website, or any ideas? Please and thanks again.

While reading your post...I saw the part where you said

*Point Note* In the State of Connecticut it is eligal for an investor/buyer to pay you a finders fee for locating property for them.

Just curious, I'm completely new at this and very nervous of breaking any laws accidentally. How did you happen to know this fact about CT and is there a website or resource that you're aware of that a new investor can go to to research specific laws that are in effect for the area you're looking to invest in?

Thanks in advance,
Suzi

I've just recently relocated down to NC myself and am unaware of the RE laws down here. Please let me know what you found out regarding this, because I'd also like to know this before getting into a deal.

Thanks,
Suzi

Hi,
This is my first post and I have a question concerning assigns. Can anyone tell me if this practice is legal in NJ? I've read in a few places that some states don't allow assigns.
Thanks

I had an reo property that I put and or assign on the purchase contract but I forgot to sign it and or assign. well that deal did not go through the banks got a full price offer. what would happen if the banks took my deal would I still be able to reassign it. Also I have an agent who sends me alot of deals but she tells me that she is ok with the assignment of contract but also tells me that to work on one deal at a time so I dont end up with to many accepted offers and not enough buyers. How many deals should a new investor like myself take on at a time. I feel that one at a time is too slow for me. please everyone respond I need input Mahalo RA.

Matt Larsen says in the book profit right now from real estate is to make sure you hire a good realestate laywer for all your assignment deals until you get it down That is worth the money you pay. I bought a resturant 10 years ago and I got a deal so good for the seller that I could not breath the minute I took over the business. Some how I lasted 7 years but was still in debt after we closed our doors when 911 hit. Also I bought my first Realestate deal Last year for 1.2 million $5000 down and owner finance for 5 years and then ballon pmt. I thought I had the deal of the centry.Well I did everything with the seller who was a seasond investor but he had to move back to switzeland and was a motivated seller. However as soon as the deal was done I found myself with out 2 of the tennats that came with the deal and the price we were getting for rent was a false price in the market last year. 2 of the renters contract expired the same month I bought it. So I learned that using a laywer or a good realestate agent to do my deals is a must until I can swim myself. I hope this helps

Mahalo from Hawaii RA

Matt Larsen says in the book profit right now from real estate is to make sure you hire a good realestate laywer for all your assignment deals until you get it down That is worth the money you pay. I bought a resturant 10 years ago and I got a deal so good for the seller that I could not breath the minute I took over the business. Some how I lasted 7 years but was still in debt after we closed our doors when 911 hit. Also I bought my first Realestate deal Last year for 1.2 million $5000 down and owner finance for 5 years and then ballon pmt. I thought I had the deal of the centry.Well I did everything with the seller who was a seasond investor but he had to move back to switzeland and was a motivated seller. However as soon as the deal was done I found myself with out 2 of the tennats that came with the deal and the price we were getting for rent was a false price in the market last year. 2 of the renters contract expired the same month I bought it. So I learned that using a laywer or a good realestate agent to do my deals is a must until I can swim myself. I hope this helps

Mahalo from Hawaii RA

if contract is for 14 days, am I screwed?

Why are you screwed

I'm a new investor and have never done an assignment deal. One of the first investors/buyers that I contacted is interested in commercial properties. I pretty much understand how a residential assignment works, I also know little bit about Cap rate, NOI, Operating costs,etc. What I need to know is how to structure a deal. Who should I contact first after I find a property the seller or my buyer? How should I work out my compensation (what %,etc.)? If possible can someone please give me some info on how I should start this process. Thanks.

Assignments are not illegal in NJ. I do them all the time. You just have to find a Title Agency that is willing to do them.

Hi Carol,
Thanks for answering my question about assigning in NJ. I'm completely new to this and am in North Jersey. I wanted to be sure this was legal before looking further into the No Money down approach.
RF0374

I have been going over this information for at least a month. I just want to make some money! (As do we all...) I have yet to find help specifically in TEXAS, that specifically answers this: How do you reassign REO's in TEXAS?

I have a realtor that is willing to make offers for me. In my mind, I already know that I will pay her 15% of my assignment fee (15% of $10k, hopefully, and I haven't told her this, but it's in my plan.)

NOW, I have read here on the site that I must show proof of funds in the state of TEXAS? ---Is this true? I also read that there is a way to get around that, so I am not worried.

Number B (lol) --- Do I HAVE to put up earnest money, even with a realtor?

Thank you in advance for your help, DG Family!

Aloha Everybody,
Do I need a real estate agent to get started? I found a lot of properties in my area that look like potential deals. I want to pursue the middleman technique, where you get payed a finder's fee from the buyer by passing on a great deal, and I also wanted to try Matt Larson 25:1 technique. Can anyone give me a simple step by step process on how I can begin all this, much Mahalo for your time.

Another question, does anyone know if it is illegal to do assignments here in Hawaii? Much Aloha for your time.

Im new to this REAL Estate investing but ive been reading alot of these posts and i've grasped how a standard assignment works. What i need some clarification on is what the differences between an REO and a foreclosure? also what is a short sale? and in what situation is a short sale used?

What is an instant equity exchange?

Lastly, what is the 25:1 technique?

If anyone can help me it would be greatly appreciated.

A short sale means that the bank is accepting less than what they are due on the mortgage. For example: The bank is due $150,000 but after negotiations the bank accepts $110,000. That is $40,000 less than what they are due or in other words a short sale.

You would use a short sale when there is little to no equity in the property.

Instant equity exchange is a way Dean has created to do a transaction similar to assignments of contract with people that do not have cash like investor in assignments of contract.

The 25:1 technique was designed by Matt Larson, one of Deans Students. He makes 25 offers expecting to get one of the offers accepted.

My home state is Florida, so I contacted a local RE attorney who agreed to review the Investor Disclosure Notice and Seller's Acknowledgment, Investor Purchase Agreement, Property Disclosure Notices, and Discharge of Agreement to Purchase forms discussed in Chapter 8, Profit for RE Right Now. I wrote a 3-page memo explaining my fast cash approach for the next 6 months using contract assignments as a major vehicle. The RE attorney did not recommend using the Investor Disclosure form because this puts the investor too close to being an unlicensed real estate agent (too much gray zone for comfort). I am meeting the week of Oct 5th with the attorney to finalize the use of all forms that have been edited to meet FL real estate laws and ethical standards. I highly recommend all investors consult with a local attorney regarding state real estate laws and ethical practices regarding contract assignments and fee payments.

Also, I am meeting with another attorney who represents banks and other financial institutions with foreclosures to understand the process from the lenders perspective.

Joey.

I just got Dean's books about two weeks ago and want to do assignments. I live in Florida and was wondering if anyone else lives in Florida and has done assignments that could give me some pointers or tell me how you did your deal.

Thanks,
Eric