Assignements - How Much Should I Be Making?

Can anyone provide a formula or rule of thumb or something that will allow me to figure out how much I should make on my assigments?

Thanks again!!! smile smile

Comments(12)

  • Tedjr21st January, 2004

    I just did a deal yesterday thet may give you some insight. A duplex that he was trying to sell for $55000 and we settled at $45000. His contract was for $40,000 with the owner. Another deal he was asking $35,000 and we settled at $33,000 and his cost was $30,000. They are both about 50% of appraised value and I know they are good deals. He could have gotten more but he was out of time.

    Good LUCK and Thank You
    Hope this helps some
    Ted Jr

  • sharpREI_PA21st January, 2004

    Thanks Tedjr for the reply....
    That does give me a good idea. But I guess I should have asked the question: When I assign a contract to another investor, how much should I expect to make after asssigning it away?

    Again, thanks for the example. I do appreciate it

  • sharpREI_PA21st January, 2004

    OK...i see. Sorry for my ignorance
    I read your response again, and I seen the assignment fees. I read it too fast the first time.

    Thanks

  • JeffAdams21st January, 2004

    Hi Sharp:
    The amount you make depends. I have
    wholesaled properties for 25k. I have wholesaled properties for 1k. Anything
    below 70% of market value is a wholesale deal. If you buy a house for 20k that is worth 100k and needs only
    paint and carpet, then you could wholesale it for 70k making a 50k profit.
    This is just an example.

    A rule of thumb is there has to be profit in it for your investor you are wholesaling to. You can only skin a cat once!

    I would recommend leaving at least 10k
    profit in it after paying realtor fees, holding cost etc....

    Jeffrey Adam

  • shanlo7822nd January, 2004

    Deleted by Poster[ Edited by shanlo78 on Date 08/31/2004 ]

  • tinman175522nd January, 2004

    I always answer that question with "whatever makes you feel good when you walk away". I personally think anything is better than nothing. Some I win BIG, some I win Small. It all works out at the end of the year. Even if I have to lose a few. LORI
    [addsig]

  • doug_powell22nd January, 2004

    As always, It Depends.

    $1,0000-$100,000. Here in the Tampa area the average assingment is $10,000. We have sold some for $1,000 and some for $100,000. Lets work backwards and see. We sell to rehabbers that make between $10k and $25k on average. Lets say the typical (no deal is typical though) rehab house retails at $100K. The rehabber wants to make $10k-$20k, lets say an average of $15k. $10k-$20k in rehab, holding and closing costs, lets say an average of $15k. $10k for us. Lets put this together:
    $100,000 retail
    -15,000 rehab profit
    -15,000 rehab cost
    -10,000 assingment fee
    $60,000 contract with homeowner

    Every deal will vary slightly when it comes to the numbers, but this is the basic structure.

    The rehabber will be able to find out what you contracted the house for if they try. Be careful, some will not appreciate you making more $ than they do, when they do the physical work. Your buyers list is your profit. Get a list and keep them happy with good deals. I know when we contract a house that the house will be gone that day, because we take care of our buyers.

    We are all part of the real estate machine. As the machine grows, it becomes even more important to be fair and ethical. Be fair to the people that you deal with and THEY will help you become successful.

  • sharpREI_PA23rd January, 2004

    Hey doug_powell...
    So In your example, I would get the property under contract with the seller for 60,000 and then assign my contract to a rehab investor for 70,000 (Which includes my assignment fee)? Ok...that makes sense to me and the numbers work as well. All I have to do now is go out and find an investor (or 2) and a motivated seller and I am off and running!!! Thanks all who responded...it was very much appreciated. I am just trying to get my feet wet with all of this....and this web site and all its contributors has been a HUGE asset to me!! Thanks again

  • MrMike23rd January, 2004

    Quote:
    On 2004-01-23 09:07, sharpREI_PA wrote:
    Hey doug_powell...
    So In your example, I would get the property under contract with the seller for 60,000 and then assign my contract to a rehab investor for 70,000 (Which includes my assignment fee)? Ok...that makes sense to me and the numbers work as well. All I have to do now is go out and find an investor (or 2) and a motivated seller and I am off and running!!! Thanks all who responded...it was very much appreciated. I am just trying to get my feet wet with all of this....and this web site and all its contributors has been a HUGE asset to me!! Thanks again <IMG SRC="images/forum/smilies/icon_smile.gif">


    I would suggest you run those numbers by the guys over in the Rehab forum. You may find it tough to find a person to buy from you at 70% FMV as in the above example. The rehabber will also figure in closing costs, holding costs and selling costs.


    Also it is best to line up some potential buyers BEFORE you get a place under contract so you can sell it quick. This can be done by placing an add and getting some phone numbers, letting them know you will contact them when you have a fixer upper.

    Mike

  • BLITZ23rd January, 2004

    shanlo78,
    Would you care to share the buyer's list application. I'm tring to come up with one from scratch and want to make sure I cover everything I need. I just don't know everything I need until I do my first deal. TIA

  • jhoward23rd January, 2004

    I second that, a buyer list application would be great to review!
    Thank you

  • clegg23rd January, 2004

    And I would third it if someone is willing.

    Thanks

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