Illegal Or Not?
Is it illegal in some way to get an "assignment of Contract" agreement for a property that you could NOT afford.
I guess my question is this...
I live in an area where I could Not afford the houses $800k+. So knowing that, is it legal to go forth and put the property under contract, with full intention to flip the property?
I was thinking that this would work hand in hand with the "Wiggle Clause" I would have that would state the purchase would be subject to getting desireable Financing, (Which I would Not qualify for).
Ofcourse if it all goes well then none of this matters, because the whole point is to Flip the property. So Hopefully if I do my homework, None of this would come up anyway.
I am in California, if that matters.
Any thoughts? Thanks in Advance
Make sure you can follow through. Otherwise your credibility will be shot and no one will work with you..
[addsig]
Thanks for the advice.. I think...
What does the Eyeroll mean? are you saying that everyone does this?
aack!! :-?
I can't personally afford a single one of the properties I buy - not even the cheap ones. I work with partners...
Why not give it a shot - just know what you're getting into.
Thanks for the advice NWMS!!
I kinda figured it was like you stated.
Thanks again!!
If you can't close the deal you have no business making a contract.
Slight update...
Well I managed to find an area that I CAN afford... but it is about 2 hours away.
And...
It turns out I CAN actually afford this area... although I would be stuck with an Interest only Loan. ..Yuck!! oh well .. beggers cant be choosers...
I guess I do have options after all... Just some are more desireable than others..
"I live in an area where I could Not afford the houses $800k+. "
u live there? in what if u can't afford the houses!?!?
[addsig]
Quote:
On 2004-07-11 22:28, tonydicorpo wrote:
"I live in an area where I could Not afford the houses $800k+. "
u live there? in what if u can't afford the houses!?!?
In Case your still trying to figure out how I live here.
I Rent
sorry i did not finish my post. I think there may be a fine line here about affordability. if it's in the interest of profiting from selling a contract, what is the worry that you cannot actually afford to buy the property?
however, you can look for partners but don't forget u r not actually going to take title to the property, u r going to sell the contract. in order to flip it, u'd have to close on it and then your buyrer closes; a bouble close so u'd have to at least qualify to purchase the property, then have the financing in place etc. it's really more of an ethics thing here that some of us may have an issue with.
[addsig]
Thanks for the response...
I think my problem was as you said in the "affordability" of the process.
I CAN afford the undesireable terms and loan rates for long enough to do a double close.
However, dealing with the carrying Costs if I had to hold on to these for an extended period of time could get ugly.
But then again if I did THAT... I would not be flipping.
Its all in the Due Dilligence.
There is nothing illegal about biting off more than you can chew. Just be aware of the earnest money you put out because if i were the seller, in the absense of a pre-approval letter from your mortgage company i would insist on a reasonable amount of earnet money (minimum of 5k for a 800k home) and NO financing contingencies.
If you think you can flip it, put down the money, make SURE you get a lengthy time until you have to close and start selling. All you need to do is find a buyer willing to pay you more that your purchase price and you can simply assign the contract to the true buyer. I think you should try VERY HARD to avoid a double closing, there are way too many complications and you might end up paying more in fees that you make in the deal