I have been wholsesaling for a year now, but they have all been rehabs and we have dealt with private individuals with cash or hard money lenders so we usually do not have a probem with the assignment fee being paid out in closing. But now I have a deal that I have under contract and its more of a rental property. The buyer will have to come in with a conventional loan. Do conventional lenders allow an assignment of contract or that something that they scream illegal to? Secondly, I want $1,500 for the deal. It has 10k - 12k equity and about $250 of positive cashflow after mortgage, after expenses including property management fee, and taxes and insurance. Do you think $1,500 is too low or too high? I would appreciate a response. Thank you.
I am not sure if I understand the question correctly but I will give it a shot.
If you put a house under contract and would like to assign the contract to another investor or any buyer, You have several options.
When you do your contract make sure you add in the contract “Offer contingent upon third party approval, and assignable by buyer” What that allows you to control the property and sell it how you please. either for some of the equity or all of it.
You could keep the property for yourself and run an ad for a lease/option tenant. Again with the same clause you can lease option the property getting a options fee(usually two or three times monthly rent) plus add an extra 50 to 200 on monthly payments. make sure you set your Price for the home in the contract(meaning the price you want for the home when buyer exercise their option to buy.
The ad in the paper can run like this “Need someone to purchase my home. Well finance to qualified buyer.” or “Home owner Financing to right buyer” ok you get the point.
I know i didn’t not cover all asspects of what you could do but I did give it a try.
I think you can ask little highe rthen $1500 for that kind of Cash flow… if you can you should keep this rental it generages 1-2 wholesell deal every year…it will give you fixed income if you can keep it rented.
Ritlab as given some good advise on lease option as well…
That’s something I’d discuss with the title company as they’re preparing the HUD-1. They’ll also be the one’s actually issuing the check so I’m sure they can find a way to document your fee. It could be a consulting fee or something along those lines.