Looking For A Step-by-Step Assignment Process
Can someone help?
I'm looking for a source where a step-by-step process is laid out for assigning a contract to another investor. I particularly want to know how to properly complete the purchase contract so that it is legally assignable. I also want to find out if its always necessary for the seller to agree to the assignment.
Can someone show me from beginning to end the entire process - from looking for the right deal, making the offer, then finally assigning the contract?
Are there any potential legal problems with assigning a contract?
Thanks for your help!
I would also like a step by step processto follow as well. It seems that there is a lot of material and info . out there, and it makes everything seem overwhelming. I will check back...
I am interested in any advice on pre-foreclosures and how to find them -steps I need to take, as well as finding foreclosures. Thank you so much
Hey folks,
I went through this recently myself. Personally, I have decided to use Options to Purchase, and assign those to investors, instead of straight contract assignment, and I will tell you why. With contract assignment, if you are not in a position to close on that house personally, even though it is legal to assign and back out if you are able to get a weasal clause in there and cannot find a buyer, you are essentially deceiving the realtor and seller by acting as if you are intending on closing.
different people will say different things, but I feel it is unethical, because what happens if you are assigning fixers and you make a mistake in repair estimates, and then because of that mistake, the whole deal is now not profitable, no one wants it, and the contract is in your name? Sure you can back out if you reference a weasal clause or state contigency, but if you do this enough times, you are going to have egg on your face, and your reputation will go down.
With options, everything is above board. You are a principal in the deal, so you are not brokering without a license, the seller knows you both are on the same team, because you let them know you are likely going to find a buyer for them at an agreed upon price. You then assign your option, making VERY CLEAR that the rehabber you are assigning to KNOWS they cannot assign it again, because that makes you an options dealer, and you can suffer serious legal consequences.
Place an option, agree on price
Agree on term of option, 30,60,90 days
Once option is placed, you have exclusive right to exercise that option should you find a buyer
Find a buyer
Assign option, make money, and get out
Buyer and Seller close without you, though you must wait until deal closes to get paid
Go to http://www.straightoptions.com to learn more. Great site, I bought the book, and it is well put together.
Best of luck with whatever you do. Other folks probably think I am wrong, because they do assignments all the time. That's great, but while I think subject to deals are highly ethical, I think contract assignments are not, because you are not being above board with everyone involved.
Thanks, Dave
One addendum about subject to...
While you are NOT being above board with the bank, and you are trying to avoid the due on sale clause, the reason I think it is ethical is that the banks is NOT in the business of taking back property onto their books. They are in the business of cash flow, and you are taking someone who either can not or does not want to pay their mortgage any more, and you are ensuring payment to the bank. You get property, seller gets out, bank gets money, everyone wins, yippeee!
Thanks everyone for your advice. I appreciate what Dave Hays had to say.
Dave, are there any cheaper books/sources of info?
I am still looking for anyone else to reply and tell me their experience or give me direction to find literature, website, or whatever that outlines a step-by-step process.
Thanks!