About buying assignments


I could use some help finding any good threads on this board about buying assignments. There are plenty of questions about how to wholesale and assign a contract. However, to be successful, someone needs to buy your contract, right?

I’d like to post my own thoughts and caveats about purchasing assignments based on my experiences. Is this the right place to post?

Please let me know and I’ll have a beefy post that will give insight to both assignors and assignees (so I think).



go ahead and post…im sure a lot of ppl would like to hear from a buyers stand point because that is what worries most ppl wanting to wholesale is that they may not be able to find a buyer and if u discuss what your looking for etc. that may be helpful…

You need to take that sort of information to the Networking ads or to the Real Estate Classifieds…


Ok. Here it goes.

As an experienced investor, I’m not interested in buying a piece of paper with a couple of signatures on it. That’s how prospective assignors are presenting their deals to me. Collect the fee, pass the paper and see 'ya. What kind of deal is that for the assignee?

Just last night I was presented an "deal" for a pre-foreclosure home with a new roof and complete interior remodel, only needing exterior paint and landscaping. There investor calculated about $35K "equity" between the 1st mortgage and the estimated After Repair Value (ARV). For a $5K, he offered to sell me this deal. 

"Ok," I said. "Can you answer a few questions?"

Being a pre-foreclosure, I asked the investor about other possible liens--he assumed that there was only one mortgage. I asked about the contract he used and if he had included a safety clause to deal with any additional liens discovered--there was none. I asked if the seller had filed for bankruptcy--he said the seller was not going to file (I've heard that before). I asked how much was required to bring the payments current--he didn't have that information. After running a few comps, I asked how he arrived at his ARV because I couldn't find any sales to support his number--he said his partner had the information. Huh? When questioned, he admitted the house was in a new development-- I explained that the majority of recent sales I could find were pre-construction lots. I asked him how he (and his partner) expected to be paid--"cash up front."  he said. 

I graciously declined this "deal" to unconditionally give him $5K for, at best, a $20K proft ($35K minus repairs, costs to bring current, closing costs, holding costs) in a new development where many brand new homes were available for sale, with no supporting comps, no protection against other liens, no guarantee of clear title, no assurances of closing, and no contingencies if the deal went south or the owner filed BK. For $5K, I got to do the bulk of the research and due diligence and assume all the risk.

Good deal? Perhaps I'm too picky. 

I’d really like to know how other investors are successfully buying assignments–especially if they are like the scenario above?

Q: How much homework do you require the assignor upfront? How do you get that information before making your decicion to buy?
(Of course, I check it all out. But, I’d like the assignor to be accountable for the information they present, especially if they want to get paid upfront)

Q: What assignment agreement to you use?
(I have one that’s adequate)

Q: How do you pay your assignment fees?
(upfront, at closing? I prefer at closing. The assignor is on the hook to write solid contracts on good deals with a good chance of closing)

Q: What contingencies do you place on payment of the assignment fees?

sorry, didnt really mean to step in as a moderator i just thought the material was relavent to our topic…

Hi Jimbojr,

I think this is a valid topic, as this is the wholesaling forum. I’ll comment on your questions from my viewpoint as the wholesaler:

A: The homework I do consists of repair estimates (as accurate as possible), solid SOLD comps (by using my realtor contacts or a service from companies like MyCastle.com), title search to ensure no unexpected liens, and a deal evaluator spreadsheet to show the prospective rehabber/investor how I came up with the potential profit for him/her.

A: I use a simple assignment contract that states both the common and legal name of the property, transferring all appropriate rights to the assignee.

A: We disagree on this one. From my perspective, I request payment upfront. The main reason I do this is because if I have to wait till closing and the rehabber/investor pulls out of the contract (for any reason) then I’m back to square one, requesting an extension for closing and then try to find another rehabber/investor. In my opinion, I did my homework:

[]found the property[]negotiated with the owner[]got the property under contract[]spent my own money to get good repair estimates/comps, title searches, etc.

That’s my business plan and what I’m sticking with. The only exception is if there were something I could add into the assignment contract to guarantee SOME payment if the rehabber/investor had to back out. Kinda like an easy-out option fee or something, or perhaps half of the assignment fee now and the other half at closing.

I think this question is directed soley at the rehabber/investor, so I won’t comment. :wink:

Anyway, I’d like to hear your viewpoint - do you think I’m offering a fair trade? If all my information is genuine, would you consider something like half assignment fee now and the other at closing? We all work in a business that works if you get creative and think outside the box - I’m open to any feedback.

when i wholesale a property, i consider that the more info i have, the better i can market the house. I ask my sellers for recent appraisals, i check the assesors office for assessed value to appraisal value, i also get comps for houses in the area-- i use one of the above to find out the value. i ask for info on repairs and most times, my sellers are honest with me (i ask this question after i ask them how they came up with their price and before i ask the lowest they will accept). in most (not all) cases, i have seen the property so if my seller leaves something out i have noticed, i ask them about it. i havent flipped a pre-foreclosure so that would be different, but the ones that i find are ususally people who come to me. i prefer payment at closing, because in some cases, i am able to make $10k on a deal and if i ask my buyer for it up front it changes the climate of the converation/deal.

i would like to know what else should i give buyers to make my property more valuable.

Hey Bob,

Thanks for your input. It’s quite helpful.

I actually agree with you on all points. I have no problem paying an assignment fee (or part thereof) if the assignor has done his or her homework and can present a solid deal.

Perhaps half of the assignment fee up front and half at closing would be better solution?

This would give the wholesaler some compensation for his or her work upfront. It gives the assignee a level of confidence that the deal is more than just a signed contract. Wholesalers are in a much stronger position to market and sell their deals if they are willing to stand behind them.

win - win

Of course, you could include language in the assignment agreement that requires payment of the fee in full if the assignee fails to close the deal. The assignor shouldn’t loose out if the assignee backs out and doesn’t close.

More thoughts to follow.


Hello M.

I’m glad you’re thinking of your assignment buyers. You will have more success than the write-it and run wholesalers who are just selling contracts.

As a buyer who sees assignment deals on an almost daily basis, I can only invest so much time checking out the details of each. I must rely on the information the wholesaler gives me. Otherwise, I’d have to say no to almost all of them. Of course, I’ll do some checking on my own, but I can’t invest the same time and effort that the wholesaler does when putting the deal together. I don’t have direct access to the seller or property that you do. I didn’t talk to the seller and fully understand their reasons for selling like you did. I think this work is part of the value in paying the assignment fee–the work is already done and is reliable and accurate.

Also, a wholesaler who is willing to take their fees at closing shows me that they are confident that the deal is solid and has a good chance of closing. I’m much more inclined to say “yes” to a deal like that than one where I’m left holding the bag on a bad deal.

Even in a hot market, like we’ve had here in Orlando, Realtors prepare information and materials to build buyer’s interest and answer questions. I’ve never had a Realtor tell me, “the first $xxxxxx takes it” and leave me to figure out if her house is a good deal. Instead, they explain why it’s a good deal and answer my questions. They know the more comfortable I am with the situation, the more inclined I am to buy.

Think of marketing your assignments they way you would sell the property if you were turning it quickly. Besides, wholesalers are prepared to close on these properties if you don’t sell the assignments before closing, yes? Then you should be thinking this way anyway. It’s your backup plan if you don’t sell the assignment, right?

Here’s my wish list of information I’d like from wholesalers:

  1. Pictures.
    I’m surprised how many people can dial my phone number but can’t invest in a little digital camera and send me pics via email. Digital film is cheap. Take pictures of the exterior form the street, from the back and sides. Take pics of each room. Take pics of the flooring. Take pics of the ceilings. Take pics of the pipes, electrical panel, water heater, roof and AC unit. Why make me drive out and see these things when you’ve already been there and taken pictures of it. I can make a deal over the phone and fax provided you can show me what I’m buying.

  2. Financial Statement / HUD-1
    Show me the money! I’m getting calls with deals where the wholesaler has not taken into account closing costs (in and out), carrying costs, repairs, renovations, etc. Completing a HUD-1, or similar financial statement would help you prove to yourself and others the value of your deal. If you’re presenting your deal as a good flip, then show me why it’s a good flip and how much money I can make. If you think it’s a better lease-option, show me why. Show me numbers and back it up with research and data. Show me the value of your deal and why I should buy it.

  3. Comps (comparable sales)
    Comps are fundamental, so be prepared with a list of addresses, sale dates, sales prices and even pictures of your comps. Sure, I’ll run my own. And, I should find some of the same comps you found. If you tell me the property is worth $xxxxx ARV, then tell me why.

  4. Repairs and Renovation costs
    Don’t just tell me it needs paint and carpet. Give me a list with estimated costs to repair (get in working order) the property, and then to renovate (update) the property. Provide me a list of each repair that needs to be made, how much you think it will cost and how you arrived at the figure. Make sure you cover the majors (roof, HVAC, plumbing, electrical) Sure, I’ve got my own ideas as to what things need to get done, but show me you’ve thought it through as well. Interior pictures are extremely helpful. You did take some, didn’t you?

  5. If you’re doing pre-foreclosures, I need limited Power of Attorneys (POA) and release of financial information forms from the sellers. How else am I going to deal with the lender, attorneys, insurer and other parties? Are you going to make me go to the seller and ask for these later, hoping that they’ll give them to me?

  6. I want to see any copies of any fairly recent appraisals, inspection reports, termite reports, surveys, etc. You did ask if the seller had these before leaving with the contract? The more you can give me, the more comfortable I’ll be with the deal.

Finally, if you can put this information together in a nice folder or electronic document that can be emailed, it will make my job tons easier and give you greater credibility as a professional.

Like I said, it’s my wish list. haha



Excellent info. and advice! Thank you so much for your expertise.


absolutely. i just started taking pics of properties. i usually have this type of info but not compiled into a report. your tip has made me much more saavy. :wink:

i now need to start asking sellers for copies of termite reports, paying to have inspections done, copies of appraisals and so on. i usually look at the house and sometimes take the sellers word for it. bad idea for my potential buyer, huh?

i usually estimate closing cost at 3k, but i thought that here in michigan, seller pays closing cost and buyer pays closing cost of mortgage (if any).

i do a pro-forma worksheet that includes repairs for my own records to see what i should offer and what i should flip for. i should do this for my buyer as well. i just learned last week to include cost of taxes for the following year.

thanks for the tip.

I think the simplest way to look at it is, “What information would I need so that I could take this to my partner and get him or her to buy this house so that we could retail it ourselves?”

Because that is exactly what you’re doing.

It’s hard to believe that people would put a contract on a property for the purpose of assignment and not have already done all of their own due diligence.

Thanks for an excellent thread, guys. There are a couple good things in here I should probably add to my toolbox.

Yeah MercuryP…

But, I guess so many people are going to seminars and listening to so-called gurus who are telling them all they need to do is get a property under contract and someone will magically want to buy it from them.

Wholesaling is a great way to do RE investing. Just be aware all that it’s still WORK.