JAIL TIME???????

Stop letting those REA's freighten you. Anytime there hear of something new and different than what they are used to, it makes them afraid and mad that money can be made in real estate without paying all the $$$ they've paid to become a licensed and struggling REA. Just do your thing and no one's going to steer you wrong. Keep looking and you'll find the right agent to work for you, but you don't actually need one working with you. Just learn how to USE them to your advantage.

Good Luck!

Bryant

When a property is listed with HUD, I believe it is first offered to owner/occupant buyers for the 1st 14 or 16 days. If it is not sold during that time, then they offer it to everyone, owner/occupant and investors. So, look at how long the HUD property has been on the market. I've never bought a HUD, but a lot investors do. It's not illegal or they wouldn't be buying them. Sorry I can't give you more info. Hope someone with more experience will see this thread and comment. Good luck.

If that was true I would be in jail right now. That is more than likely a bunch of scare tactic BS. I just had to laugh!! It is legal to assign contracts almost anywhere. Check with your local REI club and a friendly RE attorney concerning the law in Mississippi. You can assign a contract on a pile of dog poop if you have a buyer and a seller and an assignable contract. You are not buying and selling real estate, you represent no one but yourself and you are assigning a CONTRACT not buying and selling real estate. I have over 20 Hud 1 statements that show me receiving my fee! Totally legal.
Now go find a seller, get it under contract (assignable contract) find a buyer, assign the original contract to the buyer using your assignment contract. Take both contracts to an investor friendly title company/lawyer and close!
Walk away with your check or do what we do and have the title company wire the money directly into your account.

Michael Mangham
MD Home Acquisitions LLC

I have found an real estate agent, It is just the closing I am wondering about. What happens when it is time for me (the investor), the seller, and all the other closing cost to be paid. These items have to explained on the HUD 1 form, which is filed with the Real estate authority of any state. As I stated, when they ( the real estate authority) see's my (the investor's)name on that form as someone who received a fee, commissions, payment, consultation fee; whatever you want to call it. There will probably be a problem with the real estate commission with today's law structure. Don't get me wrong I still believe in the programs of no-money-down. But I have a family and I cant afford unnecessary fines or legal trouble. I have not found any information on this site to tell u how to get around that. And that's my question. How do you get around that? The only thing I can think of is a word of mouth agreement with the buyer and trust and believe he/she will pay you after closing.

Any advice is accepted.
Thanks and have a blessed day.

So, How do I classify myself on the HUD 1, consultant, counselor, investor,
wholesaler or is there some other wording I will use?

Thanks again for the advice Mr. Mike
And have a blessed day.

Thank you for the advice.

And have a blessed day.

Look at post number 4. And Thanks for the Advice.
Have a blessed day.

Find a RE Attorney in you area that is familiar with Assignment of Contract and/or Double Closings. THEY will not do anything illegal (jeopardizing their license to practice law). You may have to call 5 or 100 but you'll find one if you persevere.

You aren't buying and selling real estate. You are assigning your right to purchase to a 3rd party based on your contract having assignable contingencies. Yes, you can get into trouble when you try and 'act' as a Real Estate Agent (meaning representing a buyer or a seller in a transaction). You will be doing neither.

Look at it this way, you are putting a contract on a property as the buyer and/or assigns. Your buyer pays you a fee to 'step into your shoes' as the buyer on the property. You're selling the contract not the property.

I wouldn't recommend verbal agreements. You have no standing. Their word MAY not be as good as yours.

Find the real estate professional to add to your team that knows your state laws (not advice from just any agent that took a test and got a license).

Relax, you aren't going to assignment jail. If so, Michael and I'll save you a seat! lol!

Seriously, we don't know what we don't know. That's why we have qualified professionals on our team to assist in covering our six! lol

God bless,
Jen

http://www.deangraziosi.com/real-estate-forums/contracts-and-offers/7411...

That is a thread referring to the Instant Equity Exchange. The attorney goes into detail as to why he has a problem with it, although he states the buyer has a right to assign the contract. I have never understood why anyone would use the IEE rather than a simple assignment or even a double closing if the spread was high. But if you look at it in terms of who pays the investor in each transaction, one could see why the IEE could be construed as a brokerage fee. In an assignment, the end buyer is paying the investor for the assignment. In the IEE there is a new purchase and sale agreement between the seller and the end buyer. The investor receives his money from the seller's proceeds from the new PSA, much like an agent receives a commission. Just my opinion and I may be wrong.

Good advice bamagirl,now the trick is to find that lawyer that is willing to work with you, most can be persuaded with a little help from my friend Ben Franklin and the crew. lol

I was required to do an IEE when the buyer was pulling traditional funds to purchase. The underwriter required the seller (be one recorded on deed at least 30 days prior) and the buyer listed on the PA be their client. SOOO I had the buyer and seller meet me at the property, we did a new PA at the revised amount (to include my fee) and additional agreement between me and seller nulifying original PA and he signed aknowledging my profitable gain from sale. Which therefore acts as an invoice that goes to closing agent along with PA and yes listed on HUD.
In an IEE both ends are completely transparent.
Everything was fine in the end, but I almost lost the deal because it was a low end property and I only had a small fee on it. If I pulled transactional funding and held for time allotment to satisfy deed recording/seasoning, transaction fees would have killed any profitable gains.
Bottom line....I didn't plan well. But learned the lesson. lol

This deal was closed with a RE Attorney in AL. No problemo......

just a bit of info if buying a HUD property:
When a HUD property is put on the market, it will be listed as 'exclusive' and will have a contingency for a set period of time; it can be anywhere from 15 days to 30 days; during this period only government agencies or owner occupied buyers can purchase the property. Buyers are required to sign an owner occupied certification stating that they plan to live in the property.

After this period, anyone can purchase the property, including investors. At this time, you are no longer required to sign the owner occupied certification. Sometimes, HUD will accept an offer, and if for some reason it does not close, then the property will be re-advertised, and again, will have a contingency again.

Only HUD registered real estate agents can submit offers for HUD properties. I don't know if you cando an assignment with a HUD-you have to make sure there's no paragraphs stating otherwise in the purchase agreeement; but I don't see why you couldn't do a double closing.

Learning and proegressing every day,
Valerie

By doing Instant Equity Exchange, you are getting a fee as a Consultant...
So I think that's the way to go here.

Thanks for your post

Dennis

Thank you for your advice MS Jen

Have a blessed and Wonderful Day

Thanks Mr. Dennis for your advice.

Have a blessed Day.

Stop making me feel old(lol). Just call me Bryant and you're welcome!

"The underwriter required the seller (be one recorded on deed at least 30 days prior) and the buyer listed on the PA be their client."

That would be an instance to use an IEE. But you had originally gone with an assignment, correct?

This is how my fee is listed on Hud 1s from deals I assigned.
On line 1301. In the buyers column: Required services that you can shop for: Shows $10,000 (or whatever the fee is)
On line 1304. In buyers column: Assignment fee to MD Home Acquisitions LLC $10,000
Line 1400. In buyers column: Total settlement charges. Shows an amount that my fee is included in.
Remember it is called nothing but an "assignment fee". If it is listed as a marketing fee, consulting fee, commission, then you will have big trouble. Unless of course you have a license.

No problems filing these docs with the IRS for the past several years! They gladly allow me to be taxed on my assignment fee.

Michael Mangham
MD Home Acquisitions LLC

Yes, I am going with an assignment. I will try the IEE later.

Ooooooo, :-0, Thanks for the advice.

And have a blessed day.

thank you for sharing your knowledge; I wasn't sure if you could assign HUD properties, but after reading your post, I do know now.

thanks again!

Learning and progressing every day,

Valerie

yes, correct. I just had a signed assignment contract with buyer and collected her non-refundable earnest. THEN she decides not to use her inheritance and pay cash, but pull a small mortgage on property and use remaining cash for capital improvements. It all worked out, just threw a kink in the chain and had to extend the contract date to allow for appraisals, inspections, underwriting, etc.

Everyone left the table happy.

Hey! This is my first day on this site and I've learned so much already about this process. Good question to start with and thanks to all who participated answering the question. Looking forward to starting my career in real estate.
Norman

Thanks Erik:

O, I was wondering about that one.

Good Information.

Thanks and have a blessed day.

Richard,

Michael and Jen gave some GREAT guidance and special kudos to Michael for breaking it down regarding what goes where on the HUD. When it comes to the closing attorney's here in my area, some of the people you may speak to may not be the "praciting attorney" in the office so that person may be confused with what you're trying to do. Some of the closing attorny's I've worked with in regular residential (home buyer/home seller) deals are real estate investors and they understand how a HUD needs to be prepared for investment deals. As I said earlier, Michael and Jen are correct, you're not representing the buyer or the seller in the transaction (which believe me, that can be a blessing these days!!!) so you will be fine.

Hope this helps!

Thank you for the advice Mr Kendall

And have a blessed day.

I am in mississippi also so hello fellow mississippian.

I so glad you ask this ??

Thanks everyone for your response.

In post #11 you said THE UNDERWRITER required those things you mentioned. SO my question what is an underwriter. I'm just not clear who you are referring to as the underwriter.

Thanks Jen,

WALT

Richard,
First off, I am not seasoned, I've only done 8 deals, but someone here will likely correct me if I speak incorrectly.

Just a general comment-- REA's and others (not sure what "authority" you spoke with) telling us that what we do is illegal, or "old" or a "tactic" is simply their ignorance. Investors do creative deals everyday in every state and it's not illegal because the whole process is accountable all along the way, ending with Title. Michael is correct for sure. I even have a long time associate who has been in the financial business for 30 yrs... when I told him what I was doing, he said "OMG! You better get your license, what you are doing is illegal". I just said thank you, I'll check on that.

Erik is correct also... every deal I've done in NV has a HUD-1 that shows where all the monies are going. I've done HUD, Fannie Mae and Freddie Mac deals.

Now, one thing we did not discuss here is if your deal, Richard, is an REO. All of my deals have been REO's, which are not assignable, but doable just the same.
I spoke with Title Co., a RE Atty, my [seasoned Investor's] Agent, Matt Larson, and a half dozen seasoned investor PMI coaches, and a County Auditor as I completed each different deal.

Here's what I do:
- I lock up the deal in my LLC, and sign all the docs along the way
- when I get a partner or buyer who has the cash funds to close, I do an Agent/Principal Agreement with them which legally allows me to be there agent in the transaction (NOT a RE Agent, simply someone they have locate and secure the contract w/o compensation)
- I also do a simple agreement with them as a consultant, and send an invoice for my fee and reimbursables (the EMD)
- as for title/ escrow, I remain the buyer throughout, UNLESS the seller agrees to substitute the buyer, or do an addendum to add a buyer. If no substitutions or additions take place, I request a 3rd party wire agreement from escrow which allows the funds to come from "my buyer", or the funds are wired to my account and I fund
- as soon as the deal closes, I go to the recorders office and file a Quit Claim deed showing the reason and exemption of transfer tax as "to show/recognize true status, from agent to principal"
- I collect my fee from my invoice either during escrow or at closing depending on my agreement with the buyer

That being said, I have checked with all authorities as mentioned above and this is completely acceptable.

Michael's comment is certainly welcomed here, as he says above that there may be problems with Consultation / Marketing Fees.... but I have not encountered any as yet, and my Tax Man (also a seasoned investor) has no issues with it because I am running a RE Investment Co., and I am accountable for all my sales from service as with any business.

Anyway, long winded, but that is I do transactions that cannot be assigned.

Oh, and just to make the process even more transparent. I do write all my offers in my LLC/ exact entity TBD. And, I do not believe my offers get rejected because of that. In fact, I do have many listing agents pushing for me because I close every deal I get.

Richard, hope this helps. And guys--- if any of you feel I am doing anything incorrectly, please tell!