Need Help Flipping
I am buying a property from the bank at a great price well below market value. I would like to flip it but the bank is telling me I cannot assign it and cannot put "as nominee" as my name on the contract.
I may already have a buyer...how do I get rid of the property without having to go through a closing to then resell it?
Thank you for any help.
get an intent to purchase from the person you were going to sell it to, and get him to sign somthing say he will pay you a finders fee. This way, you getting paid the same out, and you dont have to autograph anything from the bank. WIN WIN
Eric
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Regarding REO's and assigned contracts:
I read about this in one of the TCI forums or articles about this guy who is bypassing the REO no-assignability clause by creating an LLC and purchases the house from an REO in the LLC's name, after wards sells or assigns the LLC to another investor. So from the REO's perspective it is always the same person (or LLC) that is closing. Plus there are no costs for double closure...just a $45 fee at the municipal court to register your new LLC.
I hope this helps.
You can do a simultaneous close, but then the issue comes up about where your buyers finances are coming from. If your buyer is borrowing from someone with seasoning requirements the double close will not fly. If you buyer is paying cash it will work. Note, you will spend money in closing costs to make this happen and you will make a little less, however something from a deal is better then no deal.
I'm the person who wrote the article about the LLC. You can make your offer in the name of an LLC and then assign the LLC rather then the contract to your new buyer.
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The LLC is a very creative idea!! Any downfalls to it?
Thanks for the good info.
The downfall of purchasing an LLC vs the property itself is that you carry all previous liability with you. The previous owner may have burned someone. However if the purpose of the LLC is simply to buy this one property and you, as a buyer, can monitor the activity in it, then you may not have any problems.
You will need advise from a good attorney here so consult one!
Hi,
I don't understand the LLC assignment. Who is the original LLC and who takes the assignment? If there's 3 people involved, a, b and c. Is b the LLC assigning the LLC to c?
a=seller
b=wholesaler
c=retailer
Thanks,
Ron
I imagine that a downfall is if the bank backs out for any reason, you are out the $200-$500 to form an LLC for this purpose.
Steve, what are the pros and cons with this method? Can you do the same thing for HUDs or VAs, because those are not assignable as well, true?
Thanks, dave
roncoletta,
The wholesaler would form the LLC and then get a contract to purchase the property in the LLC's name from the bank. After finding a person to flip it to, they simply sell the LLC to them (retailer) and the amount you charge for the LLC would be your flip fee.
As a side note... here in FL, a lawyer was charging $500-$600 to form an LLC. Upon advice from my CPA, I found the forms online through Florida's dept of state website and started forming them myself for $125.
Hope this helps !
Jason
[ Edited by jhadd on Date 12/17/2003 ]
The downfalls to using this method for the buyer are that they will take on the liabilities of the LLC as mentioned above. However if the LLC is brand new and has never transacted any business which is the way mine are set up, then the likelihood of this happening are slim and close to none.
The downfall for both the buyer and seller is that it is another entity that needs to be tracked and there are costs, however the costs are less then that of doing a simultaneous close which is the other alternative.
If you read my article on making a "non-assignable contract, assignable", then you will have more of the blanks filled in. It really is very easy and my students all across the country are now using this method to transfer their properties.
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