Assigning REO contract

Bird Dogs, Wholesaling
1

Can you do an assignment of contract from bank owned properties?

For example: IF I was to buy a bank owned property and put and/or assigns on the contract and they accept the offer, will I be able to assign the contract? The reason for the question is because I keep seeing on the boards that assigning from an REO is illegal or things to that nature, any suggestions would be greatly appreciated, thanks :slight_smile:

2

You can put “and/or assigns” on your contract, but all the bank owned properties I’ve ever made an offer on, force you to use their contracts which are not assignable. That’s why everyone talks about it being illegal. The banks don’t want you to assign their deals.

3

I’m trying to find where I read it, but one investor:

  1. Makes the offer in the name of an LLC. For example, 123 First Avenue, LLC.
  2. Once the contract is accepted, he forms the LLC.
  3. When he is ready to flip the contract, he sells the LLC (all shares) to the new investor for the assignment fee, which includes the costs of forming the LLC.
  4. The other investor can deed the property to whomever or do what they’d like, the dissolve the LLC if they’d wish.

A good real estate attorney helped him come up with this. Let me know what you think.

4

Found it. http://www.reiclub.com/articles/non-assignability-clause

5

you can also do a double closing. find a title company or attorney that knows how.

6

The double-closing costs more, but may be more simple. The purpose of the LLC is to reduce costs, but it is more involved.

7

I agree double close is really the only way to go. I’d talk with some other investors at investor community clubs to see who they use. Just make sure to negotiate accordingly for the added closing costs.