assignment contract help!!!

Hi Ismael,
I am new to this, but you are asking the same question I would.I dont know the answer, but I will wait and listen to some of the experts on this site.They will give you the right advice.Wished I could help.Also, your not making a fool of yourself, your just unsure like so many.
Sounds like your doing well, take care and good luck.Stay in touch would like too see how it turns out.

Curtis Fillers

Hi Ismael, Are you birddogging or assigning ? Will she be using you later to find more deals ? Do you want to develop a relationship with her going forward ? To keep from losing her you might want to just collect a bird dog fee on the 1st one, since things are moving fast. Tell her you are new at this, and try to get as much info as possible. The contract is easy. A purchase with and or assign written in with your name. If it sound like she is going to be a long term investor for you, you can take a fee on this and agree that you will be assigning any others, or at least the ones with lots of equity.
I hope this helps a little.

Jim Cov.

You need to talk to the seller first and negotiate on a selling price with the
seller,make sure you get a price that you will make a profit on.Use the purchase and sale agreement on this site and lock up the property,if you don't have any numbers to show your buyer and you show the buyer the properties,who's to say they won't side step you and go directly to the seller.Always get the property locked up before to contact the Buyer,then use the assignment contract on this site also. Good luck

whurndon
H&H PROPERTY SOLUTIONS LLC

that's good stuff whurndon, i would like to negotiate with the seller first but the problem is that my buyer ask me to find her property which i did but i didn't include the address so she wont mess me over. im waiting for her to make a pick from the list i gave her im afraid that she might ask me to go see the property with her then prob steal my deal from me by just going straight to the seller. im not sure what to do when i get to that point, i wish i could already sign a contract with my buyer before i show her the property. and would where do i find a contract that has the extra clauses that relive me from any situation,that i don't have any liability in the transfer, i have the right to assign the contract. i already have an assignment of contract but i don't know what other contracts i need. is it the purchase agreement or the purchase and sales agreement contract? help anyone....

I agree with JCFL. You are moving fast which is great but not in the right order if you want to do assignments. For the first one you can get a fee and agree to do the rest on assignments. There's more money in assignments.

You are making it happen.

Scott

I hope this helps. I am also a rookie, a student in the academy. So this won’t be a coaching advice, only info to help my fellow DG member. It sound’s like you have the basic strategy pegged. In the purchase and sale agreement (find forms and docs on this site), You will negotiate the right to assign your contract. You put the deal under contract to purchase it from the seller. With the assignment of contract, you assign the purchase contract to your buyer.

Now here’s a thought. As a delay tactic, could you ask your buyer to hold off until you confirm your contracts with all your listings.

And the referral fee for bird-dogging is great too!

If you have time, wait for further coaching advice. If you are dealing today, I hope this helps you. My best wishes for you and I look forward to hearing about your success!

Aloha,
Randz

First of all if the property is listed on the mls you will not be negotiating with the seller but rather the agent that the property is listed with. A Realtor is not going to negotiate with you knowing that you are going to assign the property to an end buyer, she will want to talk to the buyer. You CANNOT use an assignment contract with properties listed on the MLS!

Here is how you wholesale a mls property properly....

The Magic of the Instant Equity Exchange!

Have your Realtor send you properties that...
1.) Are in your market area.
2.) Have descriptions such as "Motivated Seller", Handy man", "Make Offer" etc...
3. Have been listed for 90 days or more.
* You can also use this strategy for Short Sales and REO properties.

I have my Agent make an offer on the property at 30% below the asking price. This ensures me enough room to make a wholesale fee.

If you get an offer accepted you will need 3 documents for this wholesale process know as Instant Equity Exchange (IEE). All documents must be signed by you and the seller. You can access these documents at http://www.deangraziosi.com/ieecontracts.

Investor Disclosure Agreement and Seller's Acknowledgment
This contract clearly explains to the seller that you are an investor and that you have intentions of selling the equity in the contract to another buyer and make a profit. This contract MUST be signed by both you and the seller.

Investor Purchase Agreement
This is your standard purchase agreement.
1. Your name as buyer
2. The Amount that you are paying for the property and the amount of your fee (ex. purchasing for 50k + fee 10k so 60k goes on the purchase agreement). The Investors Disclosure Agreement and Seller's Agreement discloses your fee. These contracts will ensure you get paid at settlement out of the purchase price.

Discharge of Agreement To Purchase
This is the last contract you will need. This is the contract that you will need to get signed once you have found a buyer. You will go to the seller and let them know you have a buyer. You have already disclosed to them your intentions of finding a buyer so they are not shocked when you ask them to sign this contract. At this point you are helping the seller and new buyer draft up a new purchase agreement between them. Once the new contract and the Discharge of Agreement to Purchase is signed you can rip up your original Purchase Agreement between you and the seller.

The Investors Disclosure Agreement and Seller's Acknowledgment along with the Discharge of Agreement to Purchase will act as your invoice to be paid at settlement. You will just hand these two documents to the closing Agent or Title Company and be paid your agreed amount at closing.

If your not ready for all of this I suggest that you stick to properties that are not listed with a Realtor. Then you can use an assignment contract for the transaction.

Ismael; Once you locate a deal, ran the numbers that show a nice profit. Then you talk to seller and lock the property up on contract. Never show the buyer/or other invester you are assigning it to untill that is done. That is why the invester pays you for the contract. to get the deal for himself. If you do not have the property committed to you. Then there is no reason for him to pay you and deal direct himself since he knows now where the property is, they can make an offer direct and get the contract themselfs. Birdog works when the property is tied up to you- then you transfer the right to buy that great deal to them for a fee. Transfer the deal to them as buyer. Step by step my man. Layman T. Scott President of Scott Reality & Housing, LLC Wordup- whurdon is correct.

Ismael: You can see Carol laid out the steps rather nicely. only thing to add is contingencies, inspection, or financing. That way "if" a buyer does not come through for you, plus you can't buy it yourself. You void the contract and all goes back to seller. Layman T. Scott President of Scott Housing & Rentals LLC

This is great!!!
Thank you Ismael for posting the question! and thanks to everyone who answered with some amazing information.

Carol -

Thanks so much for going out of your way to answer this question very thoroughly for all us "newer" folks. You clarified a lot and saved us from some potential waste of time and embarassment. Thanks much!

Anne

That really shed alot of light on the subject. This site is awesome.

Great info, big help

Question for freeindeed, My name is Robertk I am focusing on all info regarding wholesales. I have a realtor sending me listings on properties and my question is on your example for the purchase agreement the fee stated 10k along with purchase price 50k=60k. Is the purchase agreement sighned without having buyer yet?. just confused about what if when i find a buyer he and I agree on a less purchase price, then my fee changes what happens then? Oh I do have a buyers list in place but I worry about all the timing involved. Thanks Robertk.

Ismael,

does this investor want you to bird-dog for her? If so, you don't need to worry about the purchase and sell agreement with the seller; you have to sign an agreement with your investor, and then you can give her the address, etc.

If you're doing wholesales, then you've heard it from the best (Carol)-just follow her lead and you will succeed!!

Happy Investing!
Valerie

One contingency you could use is... "Upon my partner's approval".

If any one ever puts "upon my partners approval" on an offer on one of my properties I hand them the telephone and tell them to get it first! This is old school and every agent, lender knows whats going on. If you want a contract accepted (99% of the time) just use the inspection contingency. This is what works where I am and of course just my opinion.
One other thing, why worry about weasel contingencies if you have a good deal and know what to do with it?

It is amazing how many people responded with advise that was wrong and should be elementary Knowledge. You can not negotiate with the seller when the property is listed on the MLS! RE 101, get back to your studies people!!

Michael Mangham
MD Home Acquisitions LLC

Michael you just keep them on the strait and narrow.

Ms. Carol

You’re the very first person said it like it is! A lot of people acting like there dumb on this site especially the one's in the academy some like just keeping the information for themselves and like talking about their success. I been asking questions too about assigning last week ,and was very upset no one wanted to help even those who knew what I was taking about . Jesus always hear a heartfelt prayer may the Lord bless you, it’s good to see someone cares about people!

I am attempting to learn how to do Assignment of contracts. My question is how do you find investors? Also, What are the due duligence for process.

A Preston Ely cheap ebook, about wholesaling. I didn't know it was/is old school, and not widely used anymore. So, the inspection contingency would work. Does that cover you for just the inspection period or through the whole contract? If in the event you find a good deal but no cash buyer for the deal, there has to be another way you won't get stuck buying the house other than utilizing any exit strategies that may be available. Could you use a financing or funding contingency?

With the buyer?

ThisHouseBuyer:

Your post in particular caught my eye because Preston Ely was my first and main Wholesaling teacher. He is the one who got me into wholesaling, by explaining what it is, and why I need to be doing it, and how to get started, and all of that.

I say:
When NOT wholesaling MLS deals, you should only be using the Option Contract.
Which means, by definition, that you don't have to buy the property, but that you CAN buy it, at the agreed-upon sale price stated in your Option Contract.

The Inspection Contingency is the only contingency that you will need.
Many word their Option Contracts to include wording to the effect that if the Option to purchase is not exercised by the last day of the option period, then the contract is automatically cancelled - or something similar to that.

The "subject to partner's approval" works too. Some will object to that, as everyone will object to something or other. But don't worry about that. If your seller objects to that, just use your "Plan B" contingency clause. In fact, I suggest that you put any exit clauses that you want to use in your Option Contract - with CHECK BOXES to enable them as needed.

So, let's say you have 3 contigencies in mind:
A - "partner's approval" contingency
B - inspection contingency
C - financing contingency

By talking you will know which is/are acceptable to your seller.
Then just check the box for each contingency that will be in force in your Option Agreement.

I invite all wholesalers who want to network, and/or want help getting their first deal done, to send me an EMAIL (NOT a private message!) and to connect with me through Facebook - because that is how I network with other real estate investors and beginners. I just don't have the time to be visiting too many websites anymore.

I probably have every resource that anyone here needs to help your real estate investing business. So, just email me if you need anything, from answers to your questions, to anything else.

DARRYL DEAN, Wholesaler (nationwide)
Central Texas

P.S.
to find me online:
My nickname is "DARRYL411"

LOTS of good info and advice here (thanks, Carol!) on assignment deals. I, too, am still in the "beginner" phase of all this, but the original question is what can Ismael do...

It would seem to me, that it would be considered "bad form" to provide a list of properties you intend to "deal" to the buyer/investor WITHOUT having them already on contract (locked up). I wouldn't want to come to an investor and say that "this or that property can be yours for the low price of....", without actually having that property to sell. These sorts of things come back to bite you in the cha-cha's (false representation, etc.).

I think the best course of action would be to lock up a deal first, THEN approach the buyer when you're ready. You already have a list of properties that meet her criteria, so there shouldn't be any reason the investor wouldn't follow through with a purchase.

Sounds like you're on the right track.... just get the ducks in a row before you start shooting.

Good luck and keep us posted!

I have a scenario where we found a foreclosure through our agent on MLS. We don't have the money to purchase it, but want to make an offer and look for an investor to buy. We want to make the offer with a transactional funding letter, otherwise the bank won't even look at the offer. Then if the bank accepts the offer, we use the forms above that you mentioned.

(I'm just trying to get this in my head -- first deal!)

So then the next step would be to have our potential investor in place and sign the docs you mentioned above. I guess my question is, once you go back to the bank, since it's a foreclosure, then show the bank the investor disclosure agreement and seller's acknowledgement, can they refuse to sign it? Or is this just done all the time and I shouldn't even give it a concern? I feel like they'd go "Aha, you tricked us" or something... I'm probably just being silly, but I'd like to know what could happen so I could be prepared.
Thanks,
Carol Baer

You do a double closing, the bank does not need to know anything, as far as they know, you are buying the property. Which you do! The a to b closing is you buying the property, the b to c is your buyer buying from you. The transactional funder funds your deal (the a to b closing) In order for this to work you must have a real buyer under contract, with his funds in escrow in advance for the b to c closing.
The bank/their realtor will supply the accepted contract for you to sign, You then sell the property to your buyer using your own purchase and sale agreement. Then set up the double close (the b to c) with your title company. Not the banks title company. They will tell you what they need. Usually the HUD and deed packet from the a to b.

Or, to avoid all that and if you trust your buyer, he can go directly on the original contract and pay you a fee. Do not provide the bank or the realtor with to much info. Simply state we are changing purchasing ententes. Have them change your name to your buyers name before you sign the accepted contract. Collect your fee.

What you are talking about doing with giving the bank your disclosure ETC. will not work, they will not accept that silly stuff on an REO purchase. That would most likely kill the deal.

Michael Mangham
MD Home Acquisitions LLC

Thank you so much for that clarification. That makes so much more sense to this newbie!
Carol Baer

You might want to take pictures of the property but you don't have to reveal where the property is located; at least the investor can visual the property and make a determination if they want to pursue it. You can get a form; where deans has all the real estate forms and draw up a contract between you and the investor on how much will be your commission and if she does get this property that you are owed the agreement amount with this agreement on paper who are covered legally so you can sue if she skip out on you without paying you. You can always find out who bought the property because it's always public record so she can't take a property without you knowing it. You can also call the seller and let them know that you and your partner is interested in their property and lock it in that way also. I hope this helps good luck!

I understand that part that I read in Deans book, but what I don't understand is >> Can I do an IEE deal with the Bank and use a Realtor to get a Property that way ? How do I get a Realtor to Understand this ? All the Realtors I have met with have told me that they are not legally allowed to do that. I quess what I need is step by step instructions of how to wholesale REOS. I just don't get it. I have read Deans book dozens of times and I want to deal with REOS but I just don't understand the process.

I just think someone needs to tell me step by step like a recipe. 1 , 2, 3 , 4, 5.. Make it plain.

I mean I have 2 Properties under Contract but I don't really Understand what Contracts to use to Assign to the Buyer and how to word it. It hasnt been explained the way I need it to and I dont want to mess up and miss Money.

To SUM IT UP. I want to buy REOS like CRAZY and I have Buyers who wanna by my deals I have under Contract buy I dont like Confusion.

Any help !??

The information you request is here on Deans site in about 29 locations. You have the info right here. To be successful in this business you need to be able to figure and find out stuff on your own!! Dig a little deeper and use your head.
Here is the short version.
1. Find a property that you can at 65% (OR?) of ARV minus repair cost. One that your buyer will want!
2. Submit your offer to the bank through an agent with your proof of funds and a copy of earnest money.
3. Sign accepted contract from bank, They will deposit your earnest money at that time (48 hours)
4. Sell the property to your buyer using your own purchase contract.
5. Take the contracts to your title company and arrange the DOUBLE CLOSE.
6. Get you check at the b to c closing

This in a nut shell is one way you wholesale REOs.
How did you get your properties under contract? You have signed, accepted contracts on REOs from the bank? What did you use for POF and Earnest money?
How long do you have?

Michael Mangham
MD Home Acquisitions LLC