assigning a short sale contract?
If I did get started with this, I wouldn't even think about it, without ordering Sharon's course first. But my only problem is like most other beginners, I don't have $50,000 just laying around to close on a short sale. So I was thinking of ways to get involved in a short sale with no money down.
Lets say you go through the entire short sale process. You and the bank finally agree on the short sale terms. I don't see any reason why the bank would bulk at me for wanting to assign a short sale contract over to another investor, who does have all the cash to close the deal immediately.
It seems to me that as long as I include assignment rights in my short sales contract, I should be able to assign that contract over to any investor that I choose.
Does the bank have there own short sale agreement you must sign to make it official, or can you fax them your own short sale agreement with assignment rights and have them sign your agreement instead? Is that possible?
Or does it depend on what bank your dealing with? Or your really not sure because you never tried it?
[ Edited by bparker on Date 04/09/2003 ]
I know a little bit.
The majority of banks all over the country won't let you assign jack!
When short selling you have to "double close". Sign a contract to buy and then have another contract with the other investor to sell
Why would a bank even care about me assigning it over to partner, as long as they're getting their money, and assuming that I had already told them from the very beginning that this partner would be putting up the actual funds?
Banks don't like creative agreements. They used to assign until weekend warrior wanna be investors started messing deals up. Those wanna be investors aren't even investing anymore but their legacy has messed it up for the real investors like you and I.
If you owned a car dealership and a customer walks in fills out some of the paper work for a car and says “hold up let me go get my partner I’ll be right back” Would you hold on to the car for the original customer if another customer came in and said I want the car I have the funds here is a check?
If you partner has the funds and is established in the business he should have already known that banks wouldn’t go for the assignment. If you partner has the funds he should have no reason to object to the double close. Either way you get paid and he gets the property.
Thanks for the quick response!
I am very new at this type of thing?
Could you please elaborate on exactly how a double close would work for a short sale, and how I can protect my deal without an investor stealing it away somehow?
I'll try I’m not the most experienced person in the world either LOL!
The best description I’ve seen of the double close was Bill Bronchick’s Flipping Properties book for $20.00 I bought my copy from borders
The homeowner gives you a call he has no equity and is in arreage. You either fax him the authorization of release (allows you to speak to his lender) form or go to his house and physically get him to sign it. After he signs the form and you've spoken to the lender (to see if they will short sale) you negotiate a contract with the seller that ties the home up (so other investors can't try to steal it from you). You start negotiating with the lender on the price. When you agree on the price and fill out the contract you immediately fill out another contract with your partner to sell for a higher price than you were buying from the bank.
[ Edited by Future-Multi-millionare on Date 04/09/2003 ]
Wow, I wasnt aware that one could assign a short sale. Thanks Future for clearing that up! How many folks here have assigned a short sale? Great thread! Tim
thanks for the info!
so the way your explaining it, that after I sign the contract with the bank, than closing date must be a date probably in the near future. Because you state I immediately sign a contract with another investor afterwards.
I think I understand the part about me signing a contact with another investor to buy the mortgage at a higher price.
the part I don't understand, is since I don't have that kind of money , how does the funds get from the investor's hands to the banks hands?
And if the investor already put up say 50,000 for me to take the mortgage over, I'll have to include that 50k credit in the contract at the time it is written up.
[ Edited by bparker on Date 04/09/2003 ]
Hasspoken you’re killing me man! Double closing and assigning are two entirely different things LOL!
Bingo!! You never actually give the bank 50K off your money (if that was the case it would be a waste of time buying short sale courses because you’d have to have the money to front anyway) the 50K comes from your buyer. The buyer pays you pay the bank.
Okay that will be $1000 send check to Future multi millions inc P.O. Box
Future-Multi-millionare was right, assigning a contract and double closing are two different techniques you can use to flip a property.
I suggest you read some previous posts on the subject, like Double Closing question. If you click on "Forums", then type in "double close" or "assigning contract" and do a search. It should help you distinguish the two.
Tanya
Get a hard money lender. IF you did your short sale right, there should be plenty of room to borrow the money (privately) and pay the interest and then refi under regular terms to pay the hard-money lender off.