OfflineI am a semi-new investor that has done some assignment deals, but not in a few years. I recently attended Dean's 3 day coarse and got fired up again to go out and make some deals happen. I found a property, a 3 family with a potential cash flow of 3k a mo. which was a short sale, listed at 90k (FMV=160k) and after following deans training to the letter, put in an offer to the realtor of 55k. Realtor said he has no problem putting in that offer to the bank, but now when he sends me the contract there is a no assignment clause in it, which he said is put in by the lender and can not be removed. My problem is with no cash or credit I don't know what my next move should be. Should I try to Bird dog it to another investor and only make peanuts after doing the work? Any help from seasoned investors familiar with the northern New Jersey market would be appreciated.
Roadblock in NJ
Posted on: Wed, 04/24/2013 - 17:58
Do you feel like you can sell this deal? Do you have a buyers list? If so you are going to have to get hard money, or private money to close then resell. You arent going to be able to assign it. You may be able to do a double close on it, with the funds from your buyer.
Cathy B
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http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...
With most short sales and bank owned properties you will not be able to do assignments. They have a nonassignablity clause in the contract. You can do a double close on these kind of deals. This is where you buy the propety using transactional funding and turn around and sell it to your end buyer on the same day. The transactional funding company will lend you 100% of the money you need to buy the property and pay closing costs as long as you have an end buyer ready to buy the property from you.
Here are a few links to companies that offer transactional funding.
http://besttransactionfunding.com/
http://www.tempofunding.com/
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
In addition to Cathy's great advice above, I would check those numbers, especially the FMV of $160k. Banks are pretty smart these says, and rarely will let a place go for much less than FMV. Or in others words, if it's worth $160k and they're listing it for only $90k, why is it still available?
Possibly it needs a lot of work, so be sure to factor that in too.
Good luck and let us know how it goes.
- Tom
Yes, the property needs 30-35k in repairs. that is reflected in my low offer.
I don't think the bank would accept 55K when it needs 35K in repairs. In other words, 90K total for ARV of 160K is something the banks won't let anyone get away with these days.
P.S. - Everything else is immaterial, irrelevant, and unnecessary.
You need to check to see if your state still allows a double close. We are seeing a lot of states act to close that window. They are requiring that each buyer (including the wholesaler) bring cash to closing. This can be a serious issue that will need to be addressed.
NJ Homes - anything further on this deal? Did you make an offer, and if so, what did the bank say?
Good luck!
- Tom