My First Potenial Flip
Hi, I have a seller who whats me to sell their property. I want to do a flip.
I have a few questions.
1) Where can I get an assignable contract to use with the seller?
2) What kind of contract do I use with the buyer?
3) Do I need a realestate attorney?
4) What happens at closing?
thx for all your help.
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1) Where can I get an assignable contract to use with the seller?
Use a normal contract :
FIrst - I am not a lawyer but I have done many assigned contracts. I do them one of two ways. Please check with your attorney.
1. When I write the contract I buy as GFOUS or assigns. On most preprepared contracts there is a place where you check one of three boxes.
a. The buyer may assign this contract and be relieved of any liability. OR
b. The buyer may assign the contract but will not be relieved of any liability OR
c. The buyer may not assign the contract.
In this case I check a if I can, b if they will not accept a.
When I find somebody to assign the contract to I notice the seller that the contract is assigned to "Joe Blow". No problem.
2. If the deal is very large and sophisticated I may buy as GFous, trustee. This will allow me to move the ownership to a trust ( that I can later tranfer ownership in)or to an LLC that I set up for this purpopse. On long due diligence periods and pre closing periods after some money has gone "hard"- sellers do not like assignments. They want to know who is in the deal ( This is true with purchase money mortgages etc).
On the LLC's, I use the same LLC docs and filings for all my properties, just add a numeral to the name and refile the papers..
Keep in mind, it will not be until closing that the title company will ask "Who will be on the title?". Many times assignments are not permitted by the contract, but upon disclosure to all parties, there will be no problem.
Hope this helps.
2) What kind of contract do I use with the buyer? Note, this guy is going to buy your contract. Use an attorney to draft a simple agreement.
3) Do I need a realestate attorney? I think so.
4) What happens at closing? If you wrote it well as above - you are gone. You assigned the contract and your rights
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