Ok i have some basic questions about real estate flipping.
First off, if I put the and/or assigns clause after my name and I find another investor to flip the property to, how do I do it? Do I need to fill out another contract of some sort or what do I do?
Second, after I find a home owner and sign a contract with him/her, do I need to go to a courthouse to get it notarized or whatever? OR is the contract good enough and when we go to closing the title company will take care of everything.
Third, if I go into contract with a home owner and I can’t find an investor, how do I back out without getting sued?
Fourth, WHich is smarter. Simply getting a finders fee or buying the contract and selling it to another investor with a simultaneous close?
And if the second option is smarter, how would I do that? Because the investor has the cash, not me.
First, when you find the othe rbuyer, you fill out a contract assignment agreement, where you assign him the original contract you filled out with the seller. There is no new contract to do and no changing the terms on it.
Second, getting a sales contract notarized is not a bad thing to do, because if you don’t, there is nothing keeping the seller from signing another contract with someone else and going to settlement faster than you can. If you get it notarized, the seller mar truly feel obligated to do business with you. You do need to find a title company that is comfortable with doing an assignment deal, as you will want your assignment fee to be paid at settlement.
Third, to get out of a contract if you don’t find an investor, just make sure that you have the proper escape clauses in your agreement. Any clause, such as “subject to acceptable inspection”, “subject to acceptable appraised value” or others will get you out.
Fourth, if you do a simultaneous close, sometimes you will get hit with double transfer fees. Again, check with your title company to see what the fees, including state and county transfer taxes would be on a double close. It is simpler to just collect an assignment fee in most cases.