AND/OR ASSIGNS - How to Use It and Get It Accepted!

I have a property that is bank owned... they want $6,000, the house needs about $20k in work, but the home ARV is about $110k. I have a cash buyer and I want to assign.

How do I proceed with the banks agent?
Do I send them Deans contract or do I use theirs?
What/who do I need to complete this assignment deal?
And if you can; can you summarize the process of this type of deal (banked owned assignments where I have no agent and the bank does)?

Could anyone who is "enrolled" with the ITS program please tell me if you know wether the website is temporarily down for some reason? I cannot log on today for some reason. Thanks

it worked for me...

Here is the post on doing assignments. glad to be of help

I was wondering if anyone can give me more insight on purchasing
REO's. Can I assign REO's? I'm just getting started with the whole thing and I'm a little confused as to what would be the best strategy to use in the VA area, especially since I have very little or no money. I'd appreciate and advice, thanks

Hello all.
Read this entire thread - what education! Really concentrating on the "Assignment of Contract" Strategy. Special thanks to all especially Anita, Elena, Sully, and Rina. We are determined to succeed!
To build buyers list we have ads out in our Northern AZ local papers and on Craigslist right now. Here it is (PV or Prescott Valley) is the name of our town.

"FREE! local PV home search! Save $$!
Local investor finds homes for you!
Call and tell us what you are looking for!
759-2687 or 1-877-849-5832"

* So far we have had no calls. I know it takes time especially with things the way they are. Is this something like you all use?
* We found an SFR that was trashed inside by renters who got evicted. I mean really trashed. They tried to rip the wiring out of the walls wrecking the electrical and most of the drywall in the process. Pulled ceilings down, ripped up all the floors, ruined the bathrooms, broke windows, took all the appliances etc... It is listed for $93,900. Called the realtor - they were surprised with our level of knowledge and also were suspicious of us? There ad says it needs lots of TLC (that is an understatement!). We figure 50K to 60K of repairs. The question here is at what point will the city condemn a property?
* Is Double Closing legal in the state of Arizona? It sounds like you cannot basically sell the house before you bought it - which would make sense of course.
* I could see tension between investors and realtors, especially if we take there commissions away? I know there is a lot of Dog-E-Dog stuff going on up here with the RE market and many RE companies have gone out of business.

Lastly - This thread has brought up a lot of important aspects. As we find out stuff we will report it here. Thank you everyone.

DFand3Kids

thanks for your experiences girls. i like your 'tudes!

this is what i downloaded right from Deans' site on this subject. i reread every once in a while to refresh. it is long...sorry! the wording is slightly different: Trustee, exact vesting TBD at closing. i offer as a trust, so you are protected even further...i have to send back a few offers with an addendum since my agent did not put on the first offer. i will let you know if it causing a problem.

Right now is the perfect time to be investing in real estate! Home prices are at an all time low, and the market is flooded with short sales and foreclosures just waiting for savvy investors to snatch them up. Unfortunately, if you have poor credit or no money to invest with than real estate investing can be scary. A good investing strategy for someone who has poor credit and no money is wholesaling. Wholesaling is where you find a property 30% to 50% below market, lock it up with a contract that states you can reassign the deal, find an end buyer and sell that contract for $5k, $10k, etc. Bingo! You just made $5k and you didn’t use a dime of your money, except maybe a small earnest deposit of at least $1. If you do 10 or more of these deals, soon you will be able to leverage your money to purchase your own property and start creating passive income. You’re on your way to being a millionaire! Right about now, you’re probably thinking to yourself “This is awesome!” Not so fast my friend. Regrettably, due to the banks owning all the homes this scenario is difficult to practice.
Banks employ people who have no clue how the real estate market works. After all, they’re in the business of loaning money, not property. As a result, you will find that the banks have “restrictions,” “guidelines,” and “regulations.” You can put an offer in on a house 25% below the fair market value (FMV) and they won’t accept it. So, the house sits on the market for another month or two. You decide to put in another offer 5 weeks later. You’re kind of ticked that they didn’t take your first offer, so you offer them even less. You offer 50% below FMV. Bingo! The bank has accepted your offer. About now you’re scratching your head because 5 weeks ago you were willing to pay 25% more for the property, but they wouldn’t accept it. Now they just lost 25% more money for themselves. Perplexing isn’t it? Don’t think to hard on this because they are clueless… plain and simple. Due to their cluelessness they don’t understand investors. So, when you go sign your paperwork with the intention of assigning your deal to another investor, don’t be surprised if the agent tells you, “No way! The bank will not accept an offer with “and/or assignee” on the title. No ifs, ands or buts!” You think, “Who cares who takes title as long as the bank receives their money?” Again, they’re clueless, but WE are SMART, SAVVY investors! We know how to break the bank’s “restrictions,” “guidelines,” and “regulations.” And the best part… it is ALL legal! So, how do you assign bank owned property? With a land trust, of course!
First, what is a land trust? A land trust is an agreement between two parties, the trustee and the beneficiary. The trustee agrees to hold ownership of a property for the benefit of the beneficiary. On title is the trustees’ name not the beneficiary. The beneficiary holds all the equity of the property. Investors (smart ones) who own multiple properties use a land trust to keep their personal information private. For example, your trustee takes title to a property you own, but you’re the beneficiary. That means if someone wanted to sue you and they looked for property you owned, they wouldn’t find any because it is under your trustee’s name. Most likely, the attorney would tell the suing individual there is nothing to sue for because on record it appears that you don’t own anything. So, how does the land trust work in wholesaling reo property?
When you make your offer, you are going to tell the agent that you are purchasing the property through a trust. Therefore, you want to take title as… Joe Sample, Trustee, exact vesting TBD at closing. Now the reason you need to add “exact vesting TBD at closing” is because you want to have time to sell (or assign) the beneficiary rights to another investor. If the agent asks you why you can’t determine vesting now, you tell them that you have several investing partners and depending on what you all decide to do with the property will determine which LLC or investor is going to take hold of the vesting. Once your offer is accepted, you immediately take pictures of the property, write an ad on CL saying something like “Wow! 50c on the dollar! Great cash flow property! Hurry before you miss out on the best deal in town!” You are also going to want to email all your buyers from your buyer list. When you find a buyer, you’re going to want to explain to them why you took title as a trustee. You want your fee upfront and a proof of funds letter immediately. You can’t wait around for a loan approval. Your buyer needs to have cash.
Now, you have two options. The first, and best option, is to call escrow and tell them that you and your partners have decided how you’re going to take vesting. Give escrow a copy of your end buyers proof of funds letter and his/her information. The escrow company will remove your name from the title. Now you can walk away (make sure you have your fee first) from the deal and the end buyer finishes the deal. What if the escrow company says, “No way, your name is on title as trustee, and if you want to finish this transaction it needs to stay on title”? This is where option number two comes into play. You still collect your fee from the end buyer, but you tell them that the bank will not allow you to put his/her name on title. So, you’re going to finish the transaction (with the buyer’s money) as trustee, but put his/her name as the beneficiary. After you close, you immediately deed the property to the buyer, thus dissolving the trust automatically. Option one is a much cleaner method.
About now, you’re probably thinking “Wow, great method, but what about putting money down”? Well, you’re going to have to at least put a few hundred (preferably not more than $500) earnest money down if the offer is accepted. The key to getting your offer accepted is telling the bank you’re paying CASH for the house through private funds. You can get a proof of funds letter from a hard money lender or coastal-funding.com allows you to do it online. Just remember to have the amount you’re offering exactly the same on your proof of funds letter. You don’t want to offer $60k for a house, but on your proof of funds letter it says you are approved for $70k. The bank will definitely come back asking for more money if they can get it.
I am going to tell you right now that only a few, and I mean a few, lawyers know about land trusts. In California, I found one! That’s right one attorney! So, if you go to your attorney and they start giving you a bunch of nonsense (one told me I needed a probate attorney and that I should think of using LLC’s) then you need to be forceful and tell them to research an Illinois Land Trust. I've attached a copy of a land trust. You might want to have your attorney look at it.

quick question for any1 familiar with assignments. how exactly do you put in contingencies in a contract to give you an escape clause? are they like documents themselves that you attach to the purchase agreement? And how exactly do you come up with the assignment fee when you find an end buyer? For example, lets say you find a house and lock it up at 150k and it has a FMV of 220k and you sell the rights to the contract to another investor for 180k, you would be getting the difference which would be 30k right?

Hi everybody,

I'm new to Real Estate and the site and I've been reading through all of the material furiously in order to get better acquainted with everything. I'm a recent college grad with minimal starting money and so I wanted to capitalize on Assignments (is "wholesaling" another way of saying "assignments"?) . Anyways, I'm slowly but surely starting to develop a solid understanding of the process, but I have a couple general questions.

1. Assignments alone seem like a pretty profitable business... Lets say I work on assignments full-time and bring in $5,000 worth of profit a week. At that rate, I'm set to rake it about $260,000 a year (AND THAT'S WITH NO REAL ESTATE LICENSE OR ANY TYPE OF QUALIFICATIONS). This seems a little too good to be true and so I'm looking for positive reinforcement! haha

2. That brings me to my second question... Are assignments really as easy to conduct as it seems? That is to say, Is it really as easy as it seems to assemble a list of investors, find these distressed properties, and sell them to these investors (who are more knowledgeable of Real Estate than myself) at a profit?

3. Lastly, assuming I've gotten this far, some other people have been posting concerns such as, "Why wouldn't the investor just wait out my purchase agreement and go straight to the original seller for a lower price? ...to which others have replied, "Because if you have already assembled a stockpile of investors, you can use this as a way of assuring each invetor that if they do not close on the deal then someone else will do it!" I was wondering whether or not creating this bidding war actually works and keeps investors from waiting out your purchase agreement.

I guess I'm just looking for people who have experience dealing with these particular issues and how to solve them.

What are some main problems/setbacks that people experience when assigning contracts?

I'm sorry for the long post, I just really want to get as knowledgeable and confident of the material as possible and you guys have been really helpful so far. Thanks in advance to everyone and I'm really learning a lot from all this material!

Momma E, CrocRina, and SuperWomanAnita your my heriones!

Sully is of course a hero also!

Scott

PS. I feel sorry for the guy who makes you 3 mad.

Made my first offer on a property. Waiting to hear back from the realtor. I have buyer lined up with cash. This this should be exciting to see how it all unfolds. I learned a lot by reading what everone has mention on the topic of assignment. Thanks DG Family.

I am having second thoughs about assigning this property because I stand to make more money if I could rehab myself.I have a hard money leander going out to see the property for the cash I will need to put this deal together myself or at lease a back up plan. I will keep you posted. Hay "studentscott" you are right at my back door. I got your PM. I will call you so we can network with what I am doing in Austin.Tx.

Sounds like the beginning of our mastermind group, Edward. Count me in!

Thank you again Anita for all the help you give us all!
I am going to assign a property here in Tucson in the next 2 weeks. I think. I am still thinking that it would be a good one to keep.......triplex with a SFR on the same property: the owner is selling them as one property. He calls it a 4plex. So I am thinking of splitting them up selling the SFR and keeping the triplex as a rent/hold.

Scott

I have heard that it is against the law to "ASSIGN" in TX. How do we get around this? Is there different paperwork or maybe just the right title company? Can the fee go on the HUD-1?

I have heard that it is against the law to "ASSIGN" in TX. How do we get around this? Is there different paperwork or maybe just the right title company? Can the fee go on the HUD-1?

Welcome to the DG family, Julie.
It is NOT illegal to assign in Tx, but lease options are.
Join our Tx group. Link is below in my signature. We are working on finding a solution to that obstacle.

Scott

Im so excited and I just cant hide it, I think I like it!

In the past I have read about using the (and/or assignee). Is there a diffrence in the legalees (Im part of Deans club I cant spell either ) or is the "and/or assigns" wording just seem to work better.

And after reading that you should sign all documents with "and/or assigns" I wonder how it might work out on the next speeding ticket someone might recieve. Just thinking a little diffrently .

Thank you all for all the time you put in to this site. I have not posted in quite a while and I have not been in the family for very long but I have seen a ton of wonderful things happen in the time I have been here.

I luv the speeding ticket idea..lol
Mark use the search box (top left on each page). Do a search for 'assign'. You will have more information on the specifics then you may want. I just did it to check and got 104 pages of threads to read. Try to think of a question about assigning that has not been answered on those pages.

Scott

Hello Rina and Elena thanks for all the great info and inspiration that you give to us all and you too sully. With all these good teachers here I think I am back in school again trying to learn all I can. I purchased deans books about a year ago, have made a lot of offers all rejected because they were too low and no counter offer either except on which was still too high for the area it was in. Am currently working on a tenant buyers list which I have six on them at the moment. One wants just to rent then the others never thought about rent to own and seems like something they would really consider doing. I am going to look at a property later today that is in a good location due to an Ihop going to be built and a target as well in this town. The property is located not too far from a hwy that was recently extended and this is where these two business will be building. I think it would be a good place to consider in purchasing due to location and the town is growing plus it is listed well under market value. A lot of times I get discouraged due to my long work hours I have at my normal job, then come home and spend about two hours on the pc looking at properties and reading post on here and still no luck. I had the chance to join the success academy but with my current financial situation it is not possible to come up with the money to pay for it. Well any way Rina, Elan, Sully and all of the others here thanks for all the great info you give us it is greatly appreciated.

ba3000

Set your goals in your life high and do your best to reach them. The sky is my limit and I am attempting to reach this one.

Im a new-b and I could not agree w/ you more and I'm so glad I went this far into the forum and its a reminder that its necessary. I'm already putting myself out there and getting results. I make the phone calls not knowing exactly what to say other than common sense and truthfulness. And these individuals schedule times and places to meet them to thoroughly explain the process. If I'm not mistaken, the more busy and active in these peoples business it means more business for them so they want us to be competent w/in transactions. Thank you and I'll tune my ear to you and implement. Greatest days to you.