Lawyer says NIX on DG Assignment Contract

Here is the first part. I would not doubt that the attorney actually thinks this. Many people think these things.

I would get a second opinion!!! I would also call the State Board of Realtors.

Your Lawyer misunderstands it. You have every right to sell your interest in the property once you have a legal contract. The seller is not paying you. You are basically selling your rights to the deal to another buyer with your fee on top. If you have a contract to purchase for 100k you are assigning your rights over to an investor for 110k. after closing you will get a check for the difference which is 10k.
good luck.

I have read and it comes from a pretty reliable source that this is why you neeed to get the property in your name first.

Once this occurs, you own the property outright and have all the legal rights to do as you please with the property, including making a profit.

I never agreed with all these contentions that you can sell something you do not own or engineer such a transaction to occur, and this is on a personal level, but I realize that I am one man and my opinions are my own.

People have been doing this forever because many people will not say a word as long as they get paid the monies due to them. If the sale goes as it should, no one ever became harmed.

If the sale did not go through, the only one who could claim they were harmed would be the seller.

If a second attorney says the same thing, then you have no choice but to buy the property first in your own name as a stand alone transaction, then sell it.

You could add the amount of fee you would have received on top of the sale price and still come out the same.

are perfectly legal here in CA. It doesn't sound like your lawyer is up to date on the law, unless a new law has changed in the past few weeks.

By definition, an assignment means you are transferring rights of a contract over to another and getting the benefit of the contact. It is contractual law, not real estate law. It just so happens the benefit of the contract is real estate. Please correct if I'm misunderstanding.

It is good that you went to a RE attorney. They should all understand assignment of contracts since this practice has been going on for hundreds of years.
You have to explain what you are doing in a language that they understand.
Tell them that you put a house under a purchase and sale contract...you sign your name as the buyer with and or assigns after your name. Then you sell your interest in the contract to your investor for XXXX dollars....then the end buyer which is the investor takes the contract and goes to title company and closes in his name.

They seem to understand when you explain it that way. At least they do where I come from. Find a lawyer that has worked a lot with investors.

lawyer is an idiot. Not all lawyers are created equal. Before wasting your time and money on talking with a lawyer, you need to interview them first.

Have they worked with investors or do they mostly work with every day people who are doing estate planning?

Can he/she give you an example of some of the types of real estate investing transactions they have completed?

Are they familiar with the Ca. Title Holding Trust (Ca. version of a land trust)? Are they familiar with a land trust period?

Do they work with any title companies on a regular basis?

Do they do evictions? Can they draw up purchase agreements, rental agreements, etc.? If yes, how often do they do it?

If you get an attorney who seems savvy THEN make the appointment. I would ask ahead of time what they would charge to look at a document? It shouldn't be more than $150.

KimmyJ
Press on...
www.tagteampropertiesllc.com

Check with investors that you know to find out how long they have been working with their attorney and if their attorney is familiar with assignments. Just because someon is a RE attorney doesn't mean they have extensive knowledge of REI.

Lea

one from central Ca. would like to know the outcome from atty.I've checked about 10 RE attys, in my area the range is 220-225 per hour no free consults.

Hi all,
Maybe if we could all pitch in for a single lawyer, or maybe "referred by so and so" we all get a certain discount from a single lawyer. That way he, the lawyer could make a killing for every deal we hand over to him. Just a thought. I too am getting same response from lawyers in San Francisco. One said, NO ! it can't happen.
I too am from nor Cal.
bob

I am doing some wholesaling using transactional funding. I have a cash buyer lined up. They are looking to buy up to 25 properties (They do deals by purchasing 5 properties at a time). The properties I found are all REOs and they fit their buying criteria. I was told that I don't give my end buyer the address of these properties until I have them under contract. My question is...How would I get the REOs under contract before giving my end buyer the address to these properties?

You need to make an offer to the bank and the bank has to approve it. If they're REOs, most likely there is an agent involved, so you will need to contact him/her because banks do not like to deal direct when an agent is involved.

KimmyJ
Press on...

Okay. Thanks a lot KimmyJ!!! Once I submit my offers and the bank accepts my offer, What would my next step be?

OK-
Please if there is any DGer's in San Diego that have used Assignments can you PM me- As I am new I don't know any DG Investors yet in my or any area.
Thanks in advance!
Mack

I live in Sac. co. and I have heard of the no assignment in California.

Here is what you can do in California. Do a dubble close using transactonal funding. You will close with the seller then turn around and sell to the person that you would assign to.

Look at this site Coastal Funding.com

Also if you are not a student of the Succsess Academy you should check into it. The Succsess Academy coach is the one who explained to me how to get around the assignment.

The bottom line is you will still make money on the deal.

I hope this will help you.

Steve and Veronica.

contract is being done every single day in California including San Diego. Quit letting your mind create stories of why real estate investing won't work or they're too many obstacles. Just go out there and DO IT! The more you let your brain play games with you the more you're going to let the fear take over and not accomplish anything.

Wholesaling in a nutshell:

Make offer (add "exact vesting tbd at closing" after offer is accepted)

Lock up property

Advertise property and find end buyer

Take assignment fee and then tell escrow you have decided how you want to take title. Add end buyer's company name or their personal name to the title and take your name off. Provide end buyer's POF to escrow.

Walk away and let end buyer close.

That's it! There is no special formula. Just get out there and do it!

KimmyJ
Press on...
www.tagteampropertiesllc.com

Right on! I have a question for you as I haven't done any assignments yet, but want to to get the experience. I've already found several homes I want to try it with, but I haven't found a decent agent. The one agent says he needs my buyers POF up front (but I have several buyers) and/or FICO and prequal letter in addition to the earnest money of the 1000K. He is an investor himself and says it won't work unless its done that way. I'm not comfortable giving all my buyer's POF letters, and your way sound so much easier. I'm still looking for an investor's agent (gone through 4 now...) but I'm even coming across agents of the listings not putting in the offer I put in without all those things (transactional funding letters aren't being considered). So its stopped me cold. I'll never give up, but respect your advice. Thanks!

I have found that doing assignments without an agent(you don't need one to do assignments!), working directly with a home owner in distress is much easier! FSBOs, pre forclosure, absentee owners, tired landlords, divorce etc you know the ones.Get your marketing going to attract/find these people your self.(sound like something out of Dean's books?) I don't know about Ca. but here in Colorado I use a one page contract and a two page assignment contract. I work with a title company that is owned by an investor, Quick and easy closings!
Right now in Colorado this is my priority list that I work, in order.
1. Unlisted home owners
2. REOs/ working with listing Agents, not having a lot of luck with asset managers right now. Going to try local,small banks.
3. Short sales, Working with home owners, referring them to our short sale negotiator directly, they handle the rest. We get paid at closing.
4. Public trustee auction. Not really working this to hard right now, properties being bid to high. This can change so I will keep watching

Hope this helps!
Michael Mangham
MD Home Acquisitions LLC

First, your agent doesn't need to know that your POF is a transactional funding letter. You just give it to them and thats it. Agents in CA suck. I am not going to beat around the bush, they just do. My business partner and I are on agent number 16 or something. If they don't see pay dirt after a few offers then they get bored and turn on you. They have a very difficult time seeing the big picture. Thus the reason why I applied for my own real estate license. Regardless, my suggestion is to go direct to the listing agent and put your offer in and/or have multiple agents working for you and putting offers in. You don't need to tell them that you're doing assignment of contract. All they want to know is that you're going to close on the property. When you go to add your end buyer, you just tell them that for business purposes your business partner is going to take title instead of you. Again, the agent wants to know that he/she is not wasting their time and that they're making their commission.

Keep it simple. Less is more. They don't need to know every detail of your thoughts and plans. All they need to know is that you're putting in offers. If you get an agent that is giving you 20 questions then move to another agent. They're thousands of them out here.

When you call an agent you say, "Hi, my name is... I buy and sell several houses a month and I am looking for a strong agent who can keep up with me. I am going to tell you right now that it may take several follow up offers, so I am looking for an agent who can see the big picture. I am very aggressive on my offers, so you're going to need a thick skin if you get some calls back from irate agents. I will provide you with my POF letter and EMD check, but I am not going to do that if you aren't the thick skinned hungry shark I am looking for. There is a lot of money to be made and I don't want to waste my time."

You see what you just did there. You don't sound desperate. You sound like you've been in the game a long time. In addition, you're letting the agent think that you think he/she made not be up to the challenge. Either the agent will say yes or no. If they say no then move to the next agent.

Hope this helps...

KimmyJ
Press on...

Oh btw, most agents spew out a bunch of so-called law garbage and they have NO clue what they're talking about. If one does that move on.

I hear you on that. My constraint is that I have to bring 4 kids with me to meet with people so I have to prescreen very well before going out to meet with someone, so for now I'm working on websites and such to bring in leads. I loose people on the phone when the kids come over while I'm on the phone and start making noise (they can be playing contently and seem busy, but if they get wind that mommy is on the phone, they make it their endeavor to make sure to come over and start making some noise LOL) , so I'm trying to get the system all streamlined for my situation and thought I'd try with some listed properties first.

Working on a JV for a rehab right now, and short sales (turning out to be like turning in circles. ) but wanted to supplement with a few assignments.

Thank you! I was beginning to think I was doing something wrong because agents seem so hyped up to work with me and then they flake. In desperation to find a decent agent I even posted the agent letter in PFRERN on Craigslist. I thought I had found a good agent, because he is an investor too, but he's the one saying all the things I need to put in an offer, and that it needs to be a letter from a big bank and from the final buyer, ad nauseum. This is the 3rd good agent I thought I'd found. ONWARD again! I think I'm just going to take my broker's exam. (because that is the course I've already taken. Can I be a broker without any agents but myself? I don't remember because its been 3 years!)

Not all investors think like DG investors, that is for sure, so even investor agents have turned out to be not so great agents!

Ive have now talked with several investors, agents, lawyers here in KY and they are all saying the Safe Act certainly affects Lease options, Assignments, Owner financing. They all said if you are doing these types of deals you better be very careful with the wording on your contracts.

only applies to lending institutions not individual persons. As long as you are on the up and up and disclose everything then there should be no problem. In addition, the Safe Act does not apply to private money investing.

In regards to Broker's License, you will qualify if you have a 4 year degree. Otherwise you need to be under an agent for at least 2 years. I am taking the courses for the broker's exam as well. I already took the test for the agent. I have a friend who is going to let me be under their broker's license until I can become my own broker.

Hope this helps...

KimmyJ

Does the degree matter?

Or when I graduated? (I'll age myself if I tell that! )

Thanks for the info Kimmy - However all the so called experts here in KY say you can only enter into these kind of deals with family members. Doing LO's, assignments, owner financing outside of this is against the law.

This is even coming from one of the best real estate lawyers in KY, so they tell me.

I have done assignments and double closings and subject to in KY. So i am not sure who you are talking to. But I think if I was you I would look further.

Randy

Randy ive been talking with investors, agents, lawyers and everybody here is saying the samething. I guess since July 1st things have really changed here and has everybody scared.

The other odd thing ive noticed is im not geting return calls from bandit signs that are posted here. Ive never had any problems getting them to call me back in the past.

They are trained how to research the law. I do not see how a LO would be affected by it. Why is he telling you a lease option is affected? Have him show you in the law and why he's interpreted it that way. Then get a 2nd opinion. It affects the lenders, not buyers.

Im certainly going to be researching this more. I was just getting ready to get some things going with my business and now this.

What they are telling me is when you enter into a LO you are acting as a lending institution, and they for you must have a license.

That's not true. You are leasing the property to them and selling it to them later if they so choose to execute the option to buy. Definitely get another opinion with a good SEC attorney.