Newbie Flip - Will This Work?
Harry Homeseller will sell his home to me, with Free and Clear title (due diligence of course), and I want him to sign a sale contract stating that a closing will take place in 30 days, contingent upon me finding a buyer. Maybe I give Harry 100 bucks if he HAS to have it.
I call my Investor, from my list, and see if they are interested. Lo and behold, they are.
Can I simply assign my sales contract to them for a fee and walk away with cash in my pocket? Or do I need to stay in for the full 30 days and do a simlutaneous closing?
Also, what kind of fee can I expect on such an assignment?
Also, yes just one more question, what do I need to wathc out for in this scenario?
[addsig]
Why would Harry sell you his home contingent on you finding a buyer? What is the condition of the property? If he is giving you such a blatant escape clause then you found one heck of a motivated seller!
You can assign the contract for a fee. Just have the agreement of sale made out to "Bill Buyer and/or assigns". Then assign your contract to the investor. There is some sort of form called an assignment form that you should have between you and the other buyer, but I am not aware of what it exactly is. Anyone care to help here?
You can download the form for free from this site or do a search for real estate forms. Its a single page form.
I have the form, assignment of contract.
JoefromPhilly, you're right, Harry would have to be REALLY motivated to do this, that's for sure. But hey, that's what we want right? What would help to convince Harry that this is what he wants to do? Maybe a larger amount of cash down?
Thanks for your help on this.
[addsig]
You could always have the buying investor pay you a finders fee, and let him take care of all the legal stuff, and you just get the check from him.
[addsig]
Caseyinboise,
If the property isn't listed with a realtor/agent, you can simply get an assignable option on the property. This would state that joe seller agrees that he will sell the property to you or your "assignee" for $XX if you choose to excercise your option within 30 days. If they do not have another buyer lined up by then. (You should have a way to exclude your buyers from buying the property directly from them in the contract. Exclude your buyers for 6 months) Collect your fee from your buyer, and assign the contract to them.
This is a no lose situation for the seller. You haven't pulled the property of the market, and you haven't agreed that you will buy it, only that you might buy it.
Great idea Jeff.
Thanks for the help!
Technically you could take your assignment fee and walk away from the deal. What you stated is correct. The amount you make depends upon how good the deal is. I say make as much as you can while still leaving enough on the table for the rehabber.
But let's go back to the "assignment and walk" scenario. I don't like it, I don't teach it. You put your name on the line with the seller, and it is your name on that line whether you assign the deal or not. You should make sure that your name is honored.
Yes you may have assigned it and in your eyes it is someone elses responsibility, but the seller was dealing with you. Stick it through to the end and make sure your buyer performs. If they don't, step in and make good on it- save your name, it is the most valuable thing you have.
[addsig]
Steve, I think you are right.
I am new in my investing career, and I want to establish credibility for myself.
But at the same time I want to keep all of my "options" open at all times.
I really appreciate your input, and taking the time to help this newbie learn the ropes.
[addsig]