Lock in, assign and find an end buyer ...WHAT?!!!!

Sounds like he wants to buy the property and put someone in it right away. So he basically wants you to do the advertising for him and find him someone that wants the property. Doesn't sound like a bad deal!!! I would charge a fee on top of your assignment for finding him an end buyer...

Just what i think!!!

Thanks,
Shaun

Sounds like a cake and eat it to deal. It is just my opinion but, you find the prop and find him a buyer also. Heck, why not do the deal yourself and pick up the cash for the sale. Just my opinion, are you thinking the same thing??....Jan

If you found the property, and are able to find an end buyer, keep the profits for yourself. The only real benifit is that the investor is willing to finance the deal, and that is a benifit to the end buyer, not you.

Al

Your right on the money Al. I figure that the deal will be sweeter with finding him an end buyer because he is offering 100% owner financing to the end buyer and in today's market no one is getting mortgages from the bank.

I just am not sure how the contracts will work. Or how the whole transaction will work.

Sometimes I think I know what I am doing!!!!!!...Jan

Does it feel like he is tying your money up and getting you to do all the leg work? Maybe tell him you can't tie your house up that long unless he can put down $5000 of the $10,000. Tell him it is business and you have to have some kind of earnest money and it is your policy to get 50% up front.
That is just my advice take it or leave it. Let us know how it goes.
Sissy

Carol, read my suggestion and then read Al's again. You are doing all the ground work and for 10k it looks good, but what if he doesn't like the buyers qualifications and he shoots them down. Now you are back to square 1 all over again. Again, it is only my opinion but, you are doing the work. If you have a buyers list use it and assign it to someone else. What do you think??..Jan

I am loving the suggestions and considering all of my options. However the investor that wants to do this is my top investor. he is the one who has just purchased my last deal where I made 10k and he wants me to find him 16 more deals. I do not want to just blow him off so I am not sure what to do. I do not want to hold up my money too long and I am also not sure how to work a deal like this.

If I lock in the deal and then assign it to my investor what gives me the right to advertise it to find an end buyer? Nothing as far as I can see. The seller is expecting me to purchase the home or assign it not to re sell it on the market. I am not sure how this works.

The property that is involved here is my historic house (the one that is 300 years old). I know that this property will sell quickly on the market not only because of it's historic significance but mostly because my investor is offering 100 % owner financing (no banks involved).

How can he offer 100% owner financing if he does not even own the home? Will he need to do a double close? I am confused... VERY CONFUSED!!

It looks like the end buyer is who the property is assigned to, using your assignment clause. The end buyer will purchase property at nearly full value. At closing, you will get your fee and the investor will take the remaining profit (differance between purchase price and selling price). The investor can sell the note, and pocket his profits without any labor on his part or hold the note for interest income.

Al

Carol, make sure you really think about this....your "top Investor" is asking you of a LOT, i mean, a REAL LOT. I'm sorry but, for $10,000 i would wait and see if you can't just find a "normal buyer" and use him as a last resort, SULLY

Hi Sully, I was hoping that you would help me out. I agree with what everyone is saying here. ( give me some credit guys... I am not that naive) I was just trying to get some education as to how someone would go about doing this. What the process is and the docs needed to do this type of transaction.

How would the investor be able to offer 100% owner financing to an end buyer?

let's say I lock in the deal for $240,000.00 and then advertise the property for $300,000.00 RV. I would then make $50,000.00 assignment. Can I do that? Would I just assign the property to the buyer or would I have to do a double closing?

I want to learn how this woks. Sully I know you have the answer...

Let your seller know that you are going to actively market the house and find an end buyer....that way they can't come back later and bring suit against you saying you never told them you were going to resell.

When you find your end buyer assign it over to him and most likely you will get your $$$ on closing day....some people will give you your assingment fee up front and most want to wait till closing day cause so much can go wrong and they could loose the money they gave you up front.

I know you are not naive...you are very smart and doing an excellent job in moving forward with your RE career. You are doing great!

I think this deal could really be a good one for your if you play it the right way. No way should you just charge an "assignment fee". Not only are you going to assign the property to this investor, but you are also going to market it. I would charge him at least another 4% of the purchase price - sort of like a broker fee. You are going to spend a lot of time on this deal if you need to find multiple potential buyers.
This is going to cut into your time to find this investor another 15 properties. Sounds like a great deal, though, if you play it the right way.
good luck

We do give you credit for taking this deal on. But if we didn't voice our thoughts and not pay attention, than this whole site would be worthless. We are here to help each other, not to hinder. Gee, I remember back when you didn't even know what a THREAD was!!!! You have come a long way. My best....Jan

I love a challenge!!

The secret of this house is out!!!I found out that the seller has been using the property as a boarding house. The property brings in over $4,000.00 a month in rent. The lease is under one of the tenants names and that tenant is in charge of collecting and paying the rent each month. The seller and I have built a relationship since I have been negotiating this deal and she told me that she has been able to keep up with the home over the past 2 years or so because she has taken in borders. The only reason that she is selling is because she is purchasing another rehab and needs the funds to fix it up.

This has changed my game plan on this property. Now that I am able to prove that it has positive cash flow I am sure to peak some interest. The expenses on this property are around $2,500.00 a month with mortgage, taxes, utilities etc... The other $1,500.00 a month is sheer profit and at an asking price $260,000.00 there is 40k in instant equity.

I am so thankful that everyone here voices their opinions it helps steer us newbie in the right direction. I would never have learned what a thread was if you did not teach me Jan.
Your the best and I love you for being you!!!

Great work Carol. How long a lease does the tenant have? Maybe you should insert yourself as the buyer with your investor, and let him finance it for you. Then you could pocket that cash flow, and get your fee.

Al

That is so cool! The "unfolding" of a great deal! You just keep adding to the pot.
I think Al's idea is really good. Maybe you and your investor can review your relationship. You may have more to offer than he thinks.
Great job!

Rina

That is a great idea Al! I don't know if I am ready to own a property yet. I am just learning the assignment part of RI and I am not sure that I can take on the responsibility of land lord just yet. I have to much compassion for people to be able to do evictions and stuff. I would not be able to sleep at night knowing that I evicted someone But it is still a great idea!
I think that I am going to try to retail the property myself for $275,000.00. If it does not work out than I always have my investors deal to fall back on.

In 16 years I've never had to do an eviction. Being a landlord doesn't necessarily bring bad experiences. AND I think a bigger heart (NOT gullible, though) makes a better landlord. You have the heart and the brain.
Just something to think about for the future.

You are doing enough marketing for that property you may already have an end buyer! lol

enjoying the game,

Rina

I guess I am nervous about taking that step. I have no credit or money (not yet anyway)Why would my investor even consider financing me? I do have a question though... (if I decided to) how could I finance this property and still make my assignment fee like Al said? One of the reasons that I am hesitant on buying this property is because I need the money now from the assignment. How can I have my cake and eat it too?

It sounds like you've developed a very good relationship with your investor, and he might love to mentor you and give you the financial backing you need to succeed (with a little profit in it for him, too, of course). I can't tell from your posts or PMs the exact situation, but it sounds like it may fit the criteria. Anyway, if you have that much cash flow for certain (see how long-term the renters are, too), you could let him do the financing and get that cash-flow going for yourself. Either way, you come out a winner on this one, it sounds like. Keep us posted (as you do SO WELL. thank you).
I wish you all the best, Carol.

Rina

Even if you don't keep this property, I would say really try to get a couple of long-term properties this year. Assignment fees are GREAT, but once you're paid, that's it. If you hold a property and have cash-flow, you make $ each month, PLUS you have equity that, over time keeps on rising. PLUS all the tax benefits! AND you have a husband who is a contractor so your expenses are not high! You just keep winning.
OK, off the soap-box. lol
Just think about it.

As I'm working on my investor's houses I'm thankful to have the bird-dogging under my belt, but I know what potential HE now holds instead of me. I look around the houses as they take shape and my own mouth drools for the deals I passed on to him. (No regrets, though. )

Rina

I guess I never even thought that buying real estate was even a possibility for me. I just got my own house out of pre foreclosure and am a bit fearful of getting into another investment.

How will it effect my credit if I purchase this property? Won't the mortgage company look at this as another dept if I sell my house and want to buy another?

One more question that was not yet answered...

If I purchase this property how can I still get an assignment fee? I really need the money to begin fixing my current financial situation which is why I am doing assignments and not even considering purchasing yet. I figured that I needed to fix my credit situation before I even started looking at investments.

Rina you have my brain working over time. I now have alot to think about. Your right though I do not want to regret all the deals I could have gotten. I really, really love this house!

freeindeed,
take your 10,000 for the assignment and charge him 3% of the sale price for finding hin the end buyer.

Carol, You already have a deal set up where you get an assignment fee. If your investor will approve you for the financing he is offering, you may be able to make the deal with you or your husband as the buyer, and collect the fee. You will be getting 100% financing from the investor at a great rate, he makes some money, and you don't have to go through the bank to get a loan. Might be worth talking to the investor.

Al

Carol, do you get what Al's saying? He's telling you that you can basically pay yourself the Assignment Fee, since your investor buddy's going to finance you, have him finance the amount of $260,000 or whatever you said, plus the $10,000 to yourself, so he would finance $270,000 I think that's what Al's saying, SULLY

thanks guys!

A new landlord is born.

Carol, you're gonna love it! NOW on to more assignments. Isn't it COOL to HAVE SO MANY OPTIONS!!!

your sis,

Rina

Hi Carol , I thing little properties is on the same page I'm on for this deal.
100 % percent of what I do is Owner Finance deal for other. I can send you a personal message on how I have my attorney work my deals.I have a couple of business owner which ask me and my wife if they can partner deal with us.

bumping this! tons of thinking outside the box in this thread and watching it unfold!

recommend all revisit old post. you get to see alot of the "masters in work"

Be Blessed,
Jen