assigning a deal

assigning a deal

Can someone please telll me the step by step detail on how to do an assignment?

I know to sign my offer as name and/or assign, but what after that? How does this work..

I found a killer deal, but I cant afford it so I want to assign it to someone how can for a profit.

Thank you,
D

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freindeed.

Thanks for ya input. It was helpful. I am clear as to how things should work and how to figure out the numbers. I spoke with a few poeple and they all broke it down for me.
Kingjuss,

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www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)


Assignment. Please help me with that puzzle?

It is a fictive situation, but it is an important one.

You are in the last step of assigning a property over to an investor. You are doing so by using simultaneous close(or double contract).

Now you are at the site ready to close. The seller shows up first at 9 am and closes with you. Now that you are done with the seller, you will quickly need to close with the buyer but he/she does not show up!

How do will you be able to cash your profit without having to buy the house and pays owners fee(only applicable in certain states like NY)?

Does someone know the answer? I need it.

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Assignment vs. Double Closing

An assignment of contract is this:
- You find a property where the seller is motivated.
- You put the property under contract.
- You assign or in other words sell the contract to a new buyer.
- At the time of assigning you get paid a profit for the sale of the contract.
- The new buyer literally uses your contract to purchase the property.

A double closing is this:
- You find a property where the seller is motivated.
- You put the property under contract with the seller.
- You find a buyer for the property.
- You put the property under contract between you and the new buyer.
- You go to closing on your contract.
- A short while later you and new buyer close.
- The money transacted because of the new buyers purchase pays to allow your closing (two steps before) to fund.
- You make the difference between the two closed contracts.
- If you find a good closing company they may not require you to fund anything because in a short time, say one hour, you will close again and the new buyer funds everything.

I hope this helps.

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Getting buyers ahead of the assignment of contract

I have my buyers lined up befor getting a home under contract. Retail buyer or a wholesale buyer. Some of my retail buyers are family members, friends, work associates, neighbors. I found my wholsale buyers at real estate clubs, at the aution, and in newpaper ads.I get my buyers criteria and then find the house to match. This way is a lot less stress.


Scarlson is Right

Seasoned investors will tell you that you should have a list of investors that you can draw from. If you have been wondering how to make real estate more comfortable to you you should look to create a list of buyers as you look for properties. Once you have a list of buyers you can also look for the properties that will work best fot them.

Also, keep in mind that if you have a buyers list your holding time goes way down and your profits go up.

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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


How to determine MAX OFFER, when you DON'T KNOW the end buyer

When you find a property for sale, you call the sellers, determine level of motivation, go see property to assess repair value, bring all the information home and run comps on it and then come up with a Max Offer Amount for the property.
So, lets just say there is a home listed at 250,000, it requires about 10,000 in repairs, your assignment fee is 15,000, and the FMV current on property is 230,000. With this said, we still don't have an end buyer in mind to sell this home to, so we don't know if it will be a first time home buyer or an investor looking to rehab home, fix, sell or rent. Question: how do you determine your MAX OFFER AMOUNT ON THIS PROPERTY, without knowing who you will be assigning to and what they will do with it?
Give me your input please.
Mati

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How to assign Foreclosures

It is my understanding that when dealing with a foreclosure, you can not assign the contract to end buyer. It was suggested that what i could do is establish a RE Trust Fund in which i would add Mr. Buyer and then i would put a Purchase Contract on the home, i would then remove myself from the RE Trust, leaving Mr. Buyer in charge of the property, and i would simply collect a fee from him. Has anyone done this or similar when dealing with Foreclosures?

Has anyone got a good too out there to find out what $$$ is owned on a mortgage tied to a property?

Matilda

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attorney/title company fees

What is the average fee for an attorney being involved with an assignment? and what is the average fee for a title company?


Using a RE Trust

Matilda,
We have gotten the same advice about using a Real Estate trust to assign a deal using foreclosures. We have not done it yet, but we do plan on it. Our main problem is that we have been getting conflicting information about whether or not a Franchise Tax must be paid on each Trust. If this is the case, that tax is $800 here in CA, so we need to know before we make any offers so that we can include that charge in our math. Have you heard anything about paying taxes on Trusts?

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Targeting investors

We are looking for investors in the Seattle, WA area. We have some great leads on properties in south king county. Thank you


Trust Funds that require a Franchise Tax payment

I have not heard of this, but i have a meeting with a RE attorney this morning and i will attempt to put this question in my very long list of questions.
Mati

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Hi Mati

Mati, take a look at this formula for arriving at MOP:

Scenario of prop with $525K FMV that I can purchase for 65%

FMV 525,000.00

Rehab costs (variable) (10,000.00)
Coastal Funding (2pts + $595) (7,795.00)
Closing Costs (3%) (10,800.00)
Holding Costs (est) (10,000.00)
End buyer's potential profit (86,750.00)
My potential profit (38,800.00)
--------------
MAX OFFER PRICE 360,855.00
% of FMV 68.73%

% of FMV If bought at $350K 66.67%

Price EB will buy prop from me (75.54% of FMV) 396,595.00
My purchase price 350,000.00
-------------
46,595.00
Coastal Funding (2pts + $595) (7,795.00)
-------------
My profit 38,800.00

This formula has been used throughout the threads and I like that it shows the transaction through the EB's eyes so they know how much profit they can potentially make. In this example I am buying the prop from the seller for $350K (66%) and re-selling it to my EB for $396K (75%). I also build in a much larger profit for the end buyer to induce him not too only buy this deal from me but wet his beak to want to do more biz down the road. Alos, if I were to use a realtor that is not being paid by the bank, I would build in a profit for them as well.......as long as my profit makes sense!

I hope this makes sense. if not, email me back.

Also, whne you meet with you atty, pls ask more about land trusts to see how familiar he/she is and how they can be used for assignments of REOs and the like.

Please keep us all apprised of what your lawyer says.

Thx,

Neil


Land Trusts

We went to a Real Estate Attorney today, and he told us that using land trusts to assign contracts was "shady at best". When pressed, he agreed that it is not illegal, but he refused to draw up a trust for us. It was really frustrating and we left feeling pretty defeated, with all of his eye rolling and huffing and puffing. We decided to let it be a learning experience and to make certain that we make sure to find an attorney who is willing to "think outside the box". We are still determined to use this method, as just about every property we have seen here in So. Cal. is bank-owned. We have also learned to make sure our first meeting with potential lawyers includes a free consultation, since this "learning experience" cost us $100! Oh well, live and learn!! If anybody has any advice for us, we would love to hear it and we'll keep you all updated on what we learn. Smiling

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5HEnterprises

Thanks for that update on the run in with that lawyer. You guys opened me up to make sure I find lawyers that don't charge a consulting fee for first time meetings.At least you can see what the lawyer is willing to do and not do. Do keep on your quest for success. Don't let that lawyer be "Dream stealer" as Dean would say in his book.
Kingjuss,

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I got my mind made up.....

www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)


Thanks Kingjuss

Thanks Kingjuss! We definitely are NOT going to let that guy steal our dreams! We have an appointment tomorrow and we plan to make 3 offers, 2 of which we will be using Kimmy's land trust idea! We are so excited and nervous! We will let you know how it goes! Smiling

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Cool Go confidently in the direction of your dreams. -- Henry David Thoreau


MOP Calculations

Neil,
Forgive me, maybe cause it's late!, but when calculating the Closing Costs at about 3% and the RE Agent Commission at about 6%, you are basing these % on what number? In the example of the FMV property at 525.000 that you sent me, how did you determine these numbers?
Mati

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Legal Ramifications

Ive heard recently that many real estate investors are getting sued for doing many of the ideas I have read through here. Like with land trusts if a laywer wont write it up for you doesn't that give you some pause to say this is not a reputable practice. I want you to know that I'm not tryig to be a downer or crush any dreams, but in my opinion a profssional reputation is a very important thing. I think long term the best way to succeed in this biz by doing things the right way, by building a network of people that trust you and want to work with you. At the very least be carefull what you are saying and promiing to these people in foreclosure.

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Brooks
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Happiness does not come from doing easy work but from the afterglow of satisfaction that comes after the achievement of a difficult task that demanded our best.
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WWW.MSPAgents.com


Legal Ramifications

BJohnsonRE,
Where have you heard that land trusts are illegal?? We certainly do not want to do anything illegal, either. I doubt that anyone on this site wants to be sued. We have met with 2 different lawyers, both of which agreed that there is nothing illegal about using land trusts. We are relatively new here, and have not closed our first deal, yet. However, our impression is that the type of investing we are talking about is completely legal, outside-the-box thinking. There are plenty of people who cannot or will not consider creative-thought investing, and that is ok. I'm sure it's not for everybody. Everything I have found about land trusts assures me that they are completely legal and in fact are used extensively in many parts of the country. I am open to hearing what you have heard about them, though, because it is important to us that we do not do anything illegal or underhanded. Thanks in advance for whatever feedback you can give us.

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Cool Go confidently in the direction of your dreams. -- Henry David Thoreau


5HEnterprises is right

Its amazing how many people in the real estate field are unfamiliar with these strategies. One main reason is because thy are taught one way and taught there is only one way to do businees in real estate. So there lack of knowledge frazzles them out because they are conditioned to always be aware of any potential legal liabilites. So anything that sounds out of the ordinary they go into a mode of trying to get out bfore they get in. So don't be discouraged about agents that are conditioned to these traditional ways of doing things. I tell lots of people have doing these strategies we are learning for years, thats for sure. Well guarded secret of doing things. Most agents are stuck in there ways and have been doing thing the tradtional way for years. We are not doing anything wrong, they are just unfamiliar with these ways. So you can either educate them or just move on to the next.My strategy is acutally trying to develop good relationships with the agents I meet. I feel that if they can get to know me in a way thats a little more personal and in a more of a friend type of way. They will be more open to hearing these ways we have without rejecting as quickly before they hear the strategy, throughly that we present to them. Then they will actually sit down and actually think about it and say hey this makes sense and then can reearch it themselves just to put there minds at ease that its not illegal to apply these strategies. Alot of agents are just scared of anything new, like alot of us starting in real eastate. So remember that ladies and gents. So just keep on looking for that gutsy agent peeps.
Kingjuss,

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I got my mind made up.....

www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)


I know land trusts aren’t

I know land trusts aren’t illegal and neither are deans strategies. I'm not saying don’t assign deals. Quite the opposite...I just don’t want to see good people get themselves into trouble. I also know what happens when you can’t find an investor to assign a contract to or the deal falls apart. The homeowner gets their hopes up and stops looking for other options to avoid foreclosure. Then they look for people to blame and it doesn’t usually start with themselves.

Below is a quote from Mortgagenewsdaily.com

"Last month the Attorney General of Ohio Marc Dann filed lawsuits against six companies, charging that they had made false promises to save homes from foreclosure. Dan said that the accused may have each violated at least five different consumer protection laws and that, in addition to the suits, he was "issuing a warning to companies who think they can get away with exploiting families who face the prospect of losing their homes: "Stop now or my office will stop you.""

My advice...just be very aware that people start lawsuits over minor things. Dont make promises you cant keep because the laws are set up to protect the sheep. Good people that are trying to help people while making a fair wage can quickly be vilified by a local news spot and an upset homeowner on eviction day. Also, be careful calling yourself a short sale expert Ive heard that gets people into trouble if you cant back it up.

__________________

Brooks
__________________________________________________________________________________

Happiness does not come from doing easy work but from the afterglow of satisfaction that comes after the achievement of a difficult task that demanded our best.
Theodore Isaac Rubin

WWW.MSPAgents.com


assignment detail

I have done 2 successful assignments a few years back...I lost my paperwork in hurricane Katrina, but I think there is a detail or two I haven't seen in this thread..For one, you need to have access to the property so that you can show it to potential investors. Just stick a clause in the contract giving you the right to take people inside. This is important! It's best to disclose to a degree your intentions to the original seller. Just explain that you have every intention of buying the property but in the event that anything falls through, you have other partners you work with. Also, you will want to get in to get repair estimates. No biggie. This is all in an effort to get the deal closed. They should understand. You DON'T say, "Hey give me a discount so I can make a profit." LOL
The other thing is that in the past, on both of my assignements, I transferred the deal with a form called "Assignment of Contract." It was a very simple, one page form describing the property, new buyer,and as I recall, it was signed by myself and the new buyer. I don't recall the sellers signing it but you may want to check with your closing or title attorney. Ideally, they won't have your profit staring them in their face. I made $11,000 on a wholesale deal and I was able to discreetly do so. You can see how this might cause some tension.
In both cases, my investors were cash buyers (preferred) so there was no bank or realtor red tape. Just for the record, I am an inactive real estate salesperson, but I wasn't at the time.
Your assignment clause should say "This contract is assignable." Then follow it up with and/or assigns after your name. This is a good way to protect your butt from the old "practicing real estate without a license", which is probably illegal. Also, in Louisiana, contracts are supposed to be assignable, but it never hurts to have it in there more than once so there is no doubt.


what is scrow?

what is scrow?

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Definition of scrow

"scrow" Is RE slang for escrow so if you see that or COE that means close of escrow. This is at the very end of your transaction when you sign all of your closing documents for the home and take possession.

Niki


5h

Hi guys,

My husband and I have found several good deals on REO's that we want to assign so I was wondering if you could explain to us how the land trust exactly works. It seems very confusing so before we attempt it, I want to have everything straight. Smiling

Thanks
Niki


Transfer Tax and Conveyence Fee using a Land Trust

I came across some information that spoke of using land trusts to ultimately "assign" a deal to an end buyer. However, if you are going to be doing this with a double closing then you may be subject to paying a transfer tax or conveyence fee for doing this. I am going to do some research on this.

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RNRINVEST

Hi! KimmyJ has done A LOT of research on land trusts, and would most likely explain it way better than we can! Laughing out loud She has a thread titled, "How to Wholesale REO's Using a Land Trust." It has tons of good information. Several of the offers we have made we used Dom and Kim, Trustee, exact vesting TBD..." and none of the banks seemed to have a problem with that wording (they didn't like our offer prices, though!! Laughing out loud ) It really seems to be a way around the problem with the banks not liking "and/or assignee" on the paperwork. Another strategy we are trying to use is (I think it's called) a Quit-Claim Deed. It seems like there are lots of ways around the and/or assignee wording problems. So many, in fact, we were starting to get confused!! Sticking out tongue
Good luck and keep us updated on how it goes!! Cool

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Thank You!!

That was extremely helpful and confusing all at the same time! Smiling We are going to check out "youtube" also. I think I like Kimmy's second choice better though, just to quit claim it over. That is much less complicated.


That was our thinking, too!

Yes, that is what we were thinking, too. It seems cleaner and easier. I do think that the land trusts would work, though. Our only problem with the trust strategy is that nobody here in California seems to understand them (especially realtors and listing agents). Even a RE lawyer we saw didn't really get it. He wanted us to just purchase each property under a separate LLC each time and then sell the LLC to our end-buyer. The problem with that is the HUGE costs involved (especially in CA -- I think it was $100 to register the LLC and $800 tax every year, per LLC)! We are still going to try both methods and see how it goes. If we could just get an offer accepted!!Sticking out tongue Let us know if you find out anything new about either of these methods (or something new!! Smiling )

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Cool Go confidently in the direction of your dreams. -- Henry David Thoreau


help i'm new

i wnt to do some assignments so that i can genarate some quick money.i have a 888 # business cards,flyers,website, but no house or seller. i posted a message on craigslist today stating that i'm looking 4 investors, will bird dog houses or do assignments. am i on the right track???

I Am LuVeD

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i aM lUvEd


Assigning a Contract

Dear reinvest99,

Just a quick question. I'm new and learning. Want to start ASAP. Do you NEED a title search on an assignment? What do they cost? Who pays for the title search?

Thanks in advance ,.Andy in CT


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