??? I am new to RE investing and have a question. Is there any way to tie up a property to try and flip it? There is a foreclosure in my neighborhood;asking $135,900 for it. It sold for $167,900 when new. It need some cosmetic work inside and out, but I think it would sell for around $170-175,000. I don’t have the money to buy it, but have a small amount to tie it up (option?) and then try and flip it. Do I have to take ownership of this house before selling it, or could I find a buyer and handle everything at closing, with no money out of my pocket? Never tried this before, so any info would help. Thanks.
hi im also a newby so check my advice with a pro but i have read that u can tie up a property with an option contract. i dont think u can do this with an reo - u r talking about an reo, right? im reading quick cash in foreclosures & it is very informative
Yes, this is an REO. I just need to know if I have to take ownership before it can be flipped, not sure on that one issue. Thanks for the reply. I figured I would get more responses on this question. All replies are helpful.
It all depends on the contract that the bank will sign. Most REO departments have specific policies regarding the assignability of their contracts. Make sure it is assignable.
what about an option. will some lenders let u use an option contract?
Doc:
You can simply tie it up and ‘assign’ your escrow, no problema.
Now if it is a bank REO this is what you do. Write your offer in the name
of a “Land Trust”. Once your offer is accepted, then you can ‘assign’ it
to your ‘wholesale buyer’ and have them close it in the name of the trust.
For example, if the property is located at 123 Main St., then you can name your
trust the 123 Main St. Trust dated 02/01/05, John Homebuyer Trustee.
When you wholesale it, you can also assign your beneficial interest as the trustee.
Now, here is another way. Close the deal in your name with a hard-money lender
or a private lender. The day it closes, simply grant deed the property to your
‘wholesale buyer’, collect your fee and have them assume the financing in place
as long as they have decent credit and you clear it with the lender.
I have used both methods successfully on a couple hundred wholesale deals thru out
the years and you can use it to work for you as well.
Best Regards,
Jeff Adam