Assigning Contracts?
Hi everyone i have a quick question. I wanted to know can you assign your contract to a wholesale buyer if you are working with a real estate agent.
thanks...
Hi everyone i have a quick question. I wanted to know can you assign your contract to a wholesale buyer if you are working with a real estate agent.
thanks...
Any contractual rights that aren't specifically precluded from being assigned, are assignable.
The Assignee gets no more than you have, and he either agrees to take on (assume) your obligations under that K, or those obligations remain exclusively* yours and you must deal with them.
*As a matter of law, whatever obligations you take on, under any K are STILL yours to deal with, so if your Assignee defaults, YOU are still liable on them.
Many RE sellers don't get this, and when their buyer defaults on any K the Buyer has assumed, the Seller is truly shocked to learn that they, the Seller, are still liable on the K.
Both parties have relied on the agreements of the other party, so neither party to a K has the right to just decide he wants out and walk away...unless the other side agrees to it.
Let me ask you this, i know how to wholesale a deal but is it the same when u dealing with the real estate agent? I know that you have to make a offer first and once the offer is accepted what happen next?
thanks...
So do you have to tell the escrow company from the beginning that you are going to be assigning the escrow? And also dealing with Reo agents at closing who do you close with first, the wholesale buyer or the bank??
No, you don't have to tell the escrow company you are going to be assigning. Just make sure you open up escrow as an 'assignment'. Also, when you do assign, tell your seller you are closing in your partners name for tax reasons.
In terms of the REO deals. Write you offer in the name of a "Land Trust" preferably the property address:
123 Main St. Trust dated 11/1/04
When you find your wholesale buyer, he or she will close in the name of this trust..... This prevents the bank from giving you a hard time when you try to assign. I can't get into all the specifics of a trust as it would take to long. There are some good courses though on this site on how to set up a land trust.
Best Riches,
Jeff Adam
[addsig]
But when you dealing with a real estate agent who decides what escrow company they using, the buyer or the seller? And if it is the seller how i am going make the escrow assignable?
thanks for your help you have been helpfull...
Be sure to read over the "Standard Form of Real Estate Contract" that is used in your state.... For example in NJ there is a line in our Standard Real Estate Contract used by Realtors that reads:
14. NO ASSIGNMENT:
This agreement shall not be assigned without the written consent of the Seller. This means that the Buyer may not transfer to anyone else his/her/their rights under this Agreement to buy the Property.
So be sure to look over your contract before signing no matter how standard it is...
-FrankSoprano
But if you assign the escrow is that the same as assing the contract?
Focus:
This is why I always "assign" my escrow.... To answer your question, if you are purchasing a house from a
borrower, you have to demand to use your escrow as you are getting a discount. If you are working with a realtor, see if you can smooze them into using your escrow company, this will be best. If not, just simply call up the escrow company they are using and tell them to make sure there is an 'assignment' clause in the escrow instructions... You can also submit your contracts and put in: "and or assignee" or also
"Vesting to be determined at closing". If the agent or seller asks why, tell them you might close in your partners name or corportation.
Now get out there and do some deals!
Best Regards,
Jeff Adam
[addsig]
Umm, no. That is why you form an LLC in the first place. It is now its own entity, or like a 3rd person. The only thing that may happen if you get sued and are getting an income from the LLC is the person suing may garnish any payments from the LLC that are made to you in the form of income. If the LLC fails to garnish the payments then the LLC would become responsible for paying that debt.
[ Edited by dnvrkid on Date 11/22/2004 ]
Actually, if you or your llc gets sued by someone, and the individual get's a judgement against you or your llc, you have two options. First if the judgement is against you personaly, the individual can only attach your profit distributions from the llc to you, nothing else. So, if you're in this position, you simply expense everything out (including a management fee to yourself) so there is no profit to collect, ever. You can use this leverage against the suing party, to negotiate a settlement for pennies on the dollar, if you feel you truley owe the person, or you can use this as leverage to make the other attorney go away, no attorney wants to chase a lawsuit in which they will never get paid. Second, if the individual get's a judgement against your llc, you should have at least a million dollar liability umbrella policy in place to cover situations like that. I recomend higher amounts, but a million will do for starters. I hope this information helps out .
So remogal, do you run under one LLC and just carry enough liability insurace to cover your assets.
I looked into this once... so from what I recall, here it is: First off zoning. Usually there is a minimum lot size stated in the zoning codes for the lot in question. But lets just say your lot is 5 acres and zoned 1 acre minimum.
As the owner you have the right to subdivide (or parcel map, a little different but basically the same) your lot into 5 peices, no more. However, it will need to be OK'd by your local planning department. Application fees run into the hundreds of dollars, and the process is long and lengthy. (months) Meetings, public comment, environmental scoping and such and more paperwork. (Keep in mind this is California -- maybe other states you just snap your fingers and it is done)
Next you will need a surveyor, and now it becomes expensive. I was quoted $19K to parcel map a five acre lot into 4 peices plus a remainder. Perhaps the surveyor would've taken a lot in leiu of payment but I didn't pursue it.
Once you decide to put in streets, gutters, curbs, etc... I don't know how much that would be - no experience there. Asphalt goes for $4 square foot around here.
[addsig]
Thanks for your help. That's a really good idea about offering a portion of the land to reduce upfront costs, and as it turns out, the smallest size lots are 1acre in this area, but that still works out well for me.
Thanks again,
Yosef