Assignments VS double closes

first of all if you "purchase" a property in the name of a land trust you can assign it, you just resign as trustee after the close and it's assigned.
a double close is most often used when you don't want your end buyer to know what you have in the property. for example 2-10K (more likely 5k on the high side) is acceptable for an assignment, however if you get a killer deal that could bring you much more you'd want to do a double close.
hope this helps.

That definitely helps Rob thank you, but what about the fact that the property im working wit is an REO? Is it because the bank is only seeing one person closing and buying the property, hence they don't have to worry about a third party not going through with the transaction, and them not getting rid of the property from their books? Am I understanding that right? Isn't that why they don't like assignments? Because they done want to deal with several parties since there's more chance of a deal falling through?

Banks won't typically allow you to do assignments on properties they are involved with. They want to deal with the party that is closing on the property. That's the main reason. They will do double closings because you are closing on the property. You could also get the property under contract with a LLC, and then sell the LLC to your buyer. Your cash buyer that bought your LLC could then finish the transaction.

In the past, banks allowed contracts to be assigned. But after so many "investors" got properties under contract and had no buyers' lists and were unable to go through with the deal, they began disallowing it. That is when creative investors who were a little more experienced and knowledgable began doing double closes using transactional funding.

I actually do not do a double close unless the profit is $20,000 or more. Neither of the other parties involved even has to know that you are doing a double close unless you are doing a dry close. If you are doing one, just don't tell the bank.

As has already been mentioned above, the best and cheapest way to go now is either buying in the name of a trust or an LLC and then selling it to the end buyer.

Best of luck!

Karen

Darlene, there probably isn't an investor out there who is not critical of some of the policies, laws, and rules that are implemented by government or lenders. They make our jobs a little more complicated.
You have received some good recommendations here, that I'd suggest you utilize. But more than that, after all the confusion, and frustration that may come from restrictions, remember that this is an incredibly cool business that can make us all a lot of money, and it's worth it to learn and figure out how to mesh with these regulations. I find myself grateful every day that we have the opportunities to be real estate investors, and hope that we can protect the industry so that our children and their children have the same opportunities.

Do you know if it's legal to do assignment of contract in Texas.

Assignment of contract is legal in all states and Canadian provinces. There may be some disclosure requirements or special forms, and not all title companies or attorney's offices will do closings that involve an assignment of contract. Make sure in advance that the people you are working with for closing are okay with assignment of contract (the same would be true with a double closing, make sure your closing agent will do that type of closing).

Be aware, however, that banks, lending institutions, and government agencies will not allow an assignment of contract on properties that you are purchasing from them, or where they have some right of approval. This includes properties that have been foreclosed on, and also properties that will require a short sale arrangement with the lender (a short sale is an arrangement where a lender agrees to accept less than the payoff amount of the mortgage to settle the debt).

Because these institutions are large and influential, they have the right to dictate certain terms of doing business with them. It is best not to even propose "and/or assigns" in any offer on a foreclosed or short sale property. Instead, we will buy the property, use transactional lending to cover the government funding requirement, and then resell the property in 1 to 3 days to our cash buyer (or sell the property in an LLC or Land Trust, which is described elsewhere in the forum).