OfflineJust spoke with a real estate attorney today. He's been doing this longer than most the people on this board have been alive. His services are expensive ($180/hour), but the talk with him was free, so just to give you an idea...
I asked him if assigning a contract to purchase a home was legal, your basic NMD situation, and he said it absolutely was. Two examples of why you would want to do this. If you have a next-door neighbor that does not like you too well, and you want to sell your home and do not want the neighbor to know who buys it, you use a contract assignment to make it happen. Also, if a wealthy person does not want it known that he owns a particular property, he does an assignment of contract to keep his name hidden. Some of the time when assignments happens, the seller never receives his money, or it's a phony check, but the house has been already sold and done and over with. The seller can do nothing. As long as everything is on the up-and-up, the law is happy. And you do not need to be licensed in real estate to do it! Anyone can do it!
However, there are stumbling blocks. Some realtors out there do not like to work like this, and prefer to do deals more traditionally. So, you need to find a realtor that is comfortable handling this. Also, most banks will not do contracts. Usually, when a home is sold that has a mortgage attached, upon sale the bank wants cash in hand ASAP. If the ultimate buyer has to get a mortgage as well, this may create a problem. You can try to play the game of "just not telling the bank," but this may bite you in the ass sooner or later. If the ultimate buyer has deep pockets, then there is no issue, and go ahead and proceed through, you're not going to jail!
He told me scads of more information, I haven't even processed it all yet. This all applies to the state of Nebraska.
Moving on with my first deal....
Jason
After 5 Investments
In comment to your post..I wish my lawyer charged 180$ an hour...thats cheap compared to mine..but he's the best in my state...I think you are confused with what an assignment of contract is...First off...for example...If my neighbor didn't like me, and I sold my home, but didn't want them to know who bought it..I would not use a assignment! Who ever bought the property is public information..all you have to do is go to the town hall and look it up..and rich people, especially movie stars, who don't want people to know they own a specific peice of property,,doesn't use an assignment...they purchase the property under an llc, or Inc,
also you stated in your post that "sometimes, when an assignment happens..the seller never receives his or her money..." or they receive "phony checks" that statement makes no sence.
An assignment of contract is specifically what it is...you assign the rights of a legal contract to another buyer...that buyer...takes over in your shoes...and you get paid from the person you are assigning the contract to, to walk away...you can assign real estate contract's...contract's for cars...as long as you put an assignment clause in the contract.
What doesn't kill me,,makes me stronger!
The point is this..you should always know the facts before you speak...In regards to assignments being a waste of time...I disagree..I have successfully contracted and assigned 17 properties over the last 18 months..thats right 17 properties to where I made a minimum of $3,500 on each deal...not to shabby..I also bought a 1.4 million dollar, 18500 square foot office plaza with $120,000 a year positive cash flow, for 1 million dollars, 80% financed by the bank, with not a dime of my own money...and I still continue to average 1 wholesale deal per month..I have people from all over the state contact me and ask me questions on how I do it, even at my monthly real estate investors meeting,,they still ask..and I love to tell everyone how its done step by step..see the naysayers and negative people and the people who have never done this type of thing will tell you "it cant be done" or "its illegal" I laugh at them....See I got my ball rolling..and when it hit the pins...I got a strike..Thanks to Dean and his books..If you need any advice,,please feel free to contact me..
What doesn't kill me,,makes me stronger!
How did you structure the 1.4 mill. deal with the bank at 80% financing with no money out of pocket.I have a property owner who has 650k in equity 29 units who is asking 450k because he is leaving the great US and wants to cash out. they are all rented and in great shape with 105k net i would love to get this deal and im spinning my head off trying to come up with something if you could please give me some advise WE would be very grateful.
Thank you
Bob & sandy
robert a sanfilippo
I am going full steam ahead no matter what .The Lil Engine that could said I think I can I think I can. Keith the Train Just Rolls On Through. Saying Nothing To It But To Do It.
Thanks for the info!!! We all should already "know" this in our hearts, but you get so many inexperienced/unwilling agents telling our DG Fam "NO" and it gets us down and we post it looking for comfort. This is exactly what more positive posts like this provide, so thanks!
Also, I have a request.
Will you ask that same real estate agent if he is willing to talk to someone from out of state about this too? Reply here or PM me, I would really appreciate it. Thanks!!
Sincerely,
Kevin A Goldman
Goldman's Gardens Real Estate, LLC
Wholesale Real Estate Investing
Great Success to Us All!
My Journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/62066/...
Why do I deserve this? Because everyone should be able to enjoy their life, not struggle through an existence.
I finally finished reading, and am eager to start my game plan. However, I do have some lose end questions:
In PFRRN, it says 2 things that I have heard differently from investors in our forums.
1) An assignment fee will then be collected from the new buyer prior to closing.
2) Work with an attorney for this transaction since title companies are not qualified and can sometimes make it a much harder transaction than it needs to be.
> 1 - I thought that the fee is added into the equation in the Assignment Contract which is handed in at closing with the purchase agreement contract, and you will get your check at the end of closing. (This is what I've read in the forums)
> 2 - I have also read from many people in the forums that have posted the steps in assignment deals that they take all of the necessary contracts to closing and the title company will cut you your check.
I'd love to hear your experiences in these matters.
Thank you
"Strong Body, Strong Mind"
How to bill a buyer's list and a seller's list
I have done some bird dogging, and you can get paid both ways.
You can sell your contract, (assign it) before closing, or do a double closing the day of closing.
I have a real estate atty that also told me that in Wis they are legal, but you can only assign 4 in a year. But you can get around that by being part of the buyers "team" where you locating properties for them, and are contracted to work for them.
Or with a private lender you can do the double closing if an assignment can't be used.
Sandi
I quess I didn't understand that either. Because I can go on line and see all the transactions on who bought a place and how much they paid. If you go to the court house, you can even get more info.
LLC or Corp. would be the way to go if you don't want your name on a place you purchase.
If I didn't like my neighbor, I can sell to anyone without a realtor and the neighbor wouldn't know till he saw me moving out. But he can find out who bought it, and would anyways when the new person moves in. At that point I wouldn't care if he knew, because I got away from him!
But atty's or even an agent can help with closing. But title companies only do the titles, according to Dean, he said never use a title company for closing, that is not their job.
But thanks for the info.
Sandi