assignment question

[7G]

Im up all night reading through these forums...alot of great info...but i have a question-I have seen a few times ppl saying to collect an assignment fee b4 closing the deal (keep from wasting time etc.) I feel the time factor, but isnt the close of the deal what justifies us getting our asssignment fee? I mean, that would weed out ppl that werent serious, but if im lookng at a 4 or 5k assignment fee, most of the time, that money isnt there until the closing. what do u think?
I appreciate the help

7

[tedjr]

Howdy 7

The bigger the fee the longer the wait. I have paid $500 just to get the info and they have waited for the balance of the fee until the closing. I was paid $1500 once up front upon the signing of the assumption agreemant and the balance of $1500 at the closing. Everything is negotiable in real estate. I always try to pay as little as possible as late as possible when buying and get as much as possible as soon as possible when selling

Hope this helps a bit

[Jeff Adam]

7G:
I would recommend you collect at least 50% of your assignment fee as soon as you assign to your wholesale buyer.  You can even go so far as to line up some financing for them.

The way I operate is as follows:  I collect 100% of the assignment fee from my wholesale buyers at the time of assignment and I have a guaranteed Private Lender Loan or Hard Money Loan ready to go with typically 100% financing.  My deals close, no waiting around for someone trying to get financing.  I would also recommend when you are first starting out to work with people who can close.  Check in your local paper under the "WeBuyHouses" ads.


Best Regards,
Jeff Adam

[Jeff Adam]

7G,
If you deal with serious investors, the money comes out of their pocket to pay you.  You dont need to wait for closing..

Example:

You have a house tied up for $60k

You offer it to me for $67k

I pay you an 'assignment' fee of $7k and then you 'assign' it to me.

I take over the deal and close it for $60k.

Tell the seller you are going to close in your partners name, so they dont
freak out and know you are making more money or wholesaling.

In California, we open escrow as an 'assignment' and simply 'assign'.

Take a course on 'wholesaling' if you still dont get it.  Buy Ron Legrands book on
ebay....

Best Regards,
Jeff Adam

[7G]

I appreciate the responses...Jeff, that last one makes sense and is very doable...I think over here most ppl do it at closing, although it leaves you open to wasting time if nothing closes, its done alot here and a huge part of the "creative" investing. Most people dont want to pay anything if they cant close, and protect themselves that way. a LOT of the investors here try to leave as many ways out for themselves as possible, b/c they dont have that money up front to pay before they close OR the confidence that they will actually be able to close it in the back. Also, alot of the assignments done here are mainly to bird dogs or people like them that find the houses, or to buyer controlled investors that are being used for the sole purpose of being able to cash out. Ive actually never seen it done at any other time than @ closing, and ive been doing this for more than a year!
Thanks!

7

[Jeff Adam]

7G:
The key is to work with a group of investors that can close.  That is why I always line up financing for all of my wholesale deals.  If one of my wholesale buyers say they are going to the bank to get a loan, I run for the hills.  If they are going to pay cash, or use a credit line, then I will let that happen.  

I have seen all too many times where someone finds a good deal, finds a new investor who cant get financing in place and loses the deal.  I would recommend all new wholesalers to try to work people who can close their deals and look into getting some financing in place so they can pass the financing on to their wholesale buyers...  They can even get a referral fee on the back-end!


Best Regards,
Jeff Adam