Assiging Contract
I am a newbie, and have read most of the items posted in the Forum from the last month or so. I have one item that I would like to get a clearer picture on.
When you get under contract with the seller, and than you have an investor/buyer that you assign the contract to does the assignment first of all need to be recorded with the title company?
Secondly as the assignor do I get my fee directly from the buyer/investor when I assign it or do I too need to go to closing to get my fee?
If I have to go to closing what is my role there except to collect my check?
Sorry for the long post and questions, but with a good response, I think I can/will be ready to go for the most part anyways.
Ready to go:
The answer to your first question is NO.
The answer to your second question depends. I always get my fee at the time of assignment. Some people will not feel comfortable with that. Once you build a repore with your wholesale buyers you can demand your fee at the time of assignment.
Also, you should open up escrow as an assignment and then assign your wholesale buyer your escrow, not the contract. Sometimes sellers get scared off when they find out you have assigned their contract. If you assign the escrow once the escrow instructions have been signed, then you can tell your seller that you are closing in your partners name for tax reasons, which technically is the case due to the fact you are taking a piece of the action. Once you assign your escrow, collect your fee and let your wholesale buyer worry about closing the deal. I have seen people not collect their fee at the time of assignment and the wholesale buyer could not close and the deal never closed! Guess who lost out.
Another thing you could do is hook up with some hard-money lenders and private investors and pass on your wholesale deals to your wholesale buyers with 100% financing! It will make your wholesale deals sound even more appealing.
Best Riches,
Jeff Adam
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Ok so I understand no need to have assignment recorded.
I want to make sure I understand
So I would set up escrow on that property (w/ title company), and than assign the escrow over to the wholesale buyer. Would I use just a normal regular assignment contract or is there a special one for assigning the escrow over? *(I have an assignment contract but it looks like it is for assigning the actual purchase contract)
And could someone answer me why you wouldn't just assign the contract rather than open escrow and assign the escrow.
Once the contract is assigned doesn't that take all the closing items away from you personally?
Quote:
On 2004-08-06 15:04, JeffreyAdam wrote:
Ready to go:
The answer to your first question is NO.
The answer to your second question depends. I always get my fee at the time of assignment. Some people will not feel comfortable with that. Once you build a repore with your wholesale buyers you can demand your fee at the time of assignment.
Also, you should open up escrow as an assignment and then assign your wholesale buyer your escrow, not the contract. Sometimes sellers get scared off when they find out you have assigned their contract. If you assign the escrow once the escrow instructions have been signed, then you can tell your seller that you are closing in your partners name for tax reasons, which technically is the case due to the fact you are taking a piece of the action. Once you assign your escrow, collect your fee and let your wholesale buyer worry about closing the deal. I have seen people not collect their fee at the time of assignment and the wholesale buyer could not close and the deal never closed! Guess who lost out.
Another thing you could do is hook up with some hard-money lenders and private investors and pass on your wholesale deals to your wholesale buyers with 100% financing! It will make your wholesale deals sound even more appealing.
Best Riches,
Jeff Adam
Ready to go:
Relax......
Listen, you want to open up escrow with an escrow company as an 'Assignment'
They will put a special provision in the escrow instructions that state you have the right to 'Assign' your escrow.
You can use a standard CAR form or even a simple one page sales contract or even a napkin for that matter! Does not need to be a special assignment contract. You then open up escrow as an 'assignment' and then find your wholesale buyer that you can wholesale to. You collect your fee and assign your escrow simultaneously....
The problem with 'assigning' contracts is that the sellers know that you have flipped the property to someone else for more money and they may get upset that you assigned the contract and back out. You can do this if you would like and there are people who do this all the time. I would recommend simply 'assigning' your escrow, collecting your fee and moving on to the next deal. Once you assign your contract your wholesale buyer is responsible for closing the deal. It is not your responsibility. Your job is to find more deals to wholesale!
I would have to recommend to your Ron Legrands course on 'Wholesaling'
Best Riches,
Jeff Adam
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Jeff,
Last question, I will look into the wholesale training, but I have one final question. When you assign the escrow, and collect your fee, do you collect the fee directly from the person/people you assinged it to or do I still need to go to closing?
ONE ? HOW DO YOU GET OUT OF A PURCHASE AGREEMENT IF YOU CANT FIND A BUYER?
I've read Jeff's method of assigning, which appeals to me because of its simplicity.
2 questions:
1. Jeff: do all title companies allow this kind of "assignment escrow"?
2. Ready-to-go's questions are mine as well: in a "non-Jeff" method of assigning, what is the method of getting your assignment fee?
The Robt. Allen stuff is pretty vague about this and the other assignment thread on this got derailed away from the poster's original question.
These parts I understand:
a. Find a property and get it under contract with the seller (with a P&S allowing assignment of contract). Example: $100K.
b. Find an invester/buyer who likes the numbers on the property and offer to assign to him for a fee. Example: $1K. Sign an Assignment of Contract agreeement.
c. Investor/buyer completes the closing with the seller, for the original amount of my P&S agreement ($100K).
Here's where I got lost:
How does the HUD-1 get written by the title co? Is the $1K in the HUD-1 at all? Listed as what?
Do I just collect my $1K from the buyer when he closes or is it allocated to me by title co. at close?
Remember, this is for a "non-Jeff" method of assigning.
Thanks,
Andy
Ready to go:
I normally collect my 'assignment' fee before closing for a couple reasons. What happens if your new wholesale buyer cannot get a loan or financing? What I recommend is lining up with some private investors and hard-money lenders. Then you can pass on all your wholesale deals with financing already lined up. You can even charge for money for having your financing lined up.
In terms of will TItle Companies allow assignment? Yes. TItle Companies are in business make money and give you Title Insurance, not regulate who purchases the property!
Best Riches,
Jeff Adam
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Jeff,
On this note, if I assigned this over to the new buyer, and he/she can not fund it whether with cash or financing, isn't that on him now, wouldn't I be out of the picture? Or would that be looked as screwing the seller, to make a quick buck?
One other thing how to you ask for your wholesale fee, is it verbal or written, etc.? Lets say this is your first wholesale deal ( I don't want to get screwed)
What do you charge for having financing set up? And again do you do this verbally or in writing>?
Quote:
On 2004-08-10 12:42, JeffreyAdam wrote:
Ready to go:
I normally collect my 'assignment' fee before closing for a couple reasons. What happens if your new wholesale buyer cannot get a loan or financing? What I recommend is lining up with some private investors and hard-money lenders. Then you can pass on all your wholesale deals with financing already lined up. You can even charge for money for having your financing lined up.
In terms of will TItle Companies allow assignment? Yes. TItle Companies are in business make money and give you Title Insurance, not regulate who purchases the property!
Best Riches,
Jeff Adam
RTG:
Don't want to speak for Jeff, but to sort of answer both your questions: GET IT IN WRITING! Verbal agreements are worth the paper they're printed on--NOTHING!
It would be nice to work in a hand-shake industry, but I think those have gone the way of the buffalo. This is a business, so I treat it like one. I wouldn't sell my house to someone who "promised" to give me the money.
Andy
Hey Jeffrey,
I am a rei beginner and i read Ron's wholesaling course. But i have a few questions?
Can you use the purchase and sale contract supplied in that course in every state? (I am from NY)
I dont see why not.
Best Riches,
Jeff Adam
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Thank you for all the great information. Two questions. How do you approach a hard money lender when you are going to be lining up financing for someone else?
If you had a deal as the one described above, do you ever keep them for yourself AND use hard money to go that route?
Thanks in advance.
Frank
Thank you for all the great information. Two questions. How do you approach a hard money lender when you are going to be lining up financing for someone else?
If you had a deal as the one described above, do you ever keep them for yourself AND use hard money to go that route?
Thanks in advance.
Frank
Hi Frank:
Typically on my deals I either assume 'subject to', pay cash or credit line or private investor...
When approaching a hard-money lender, it is not hard to find ones to work for you.. Why not do this Frank, put an ad in your local paper:
"Are You Tired Of The Stock Market"
"Real-Estate Investor with proven track record looking for investors who want to make 10-12% on their money secured by a First Trust Deed"
Pay them 10% monthly payments or 12% fee simple, meaning when the property sells.. Check out www.AllanCowgill.com He is the master of finding private money.
Best Riches,
Jeff Adam
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