Contract Assignment Help

General Real Estate Investing
1

I have an LLC. I want to be able to go under contract with someone and assign the contract to another investor within 45 days. I am unclear exactly how to do this. My thoughts were to do it like this (please comment).

  1. Go under contract for $10 earnest money with property owner for 45 days with assignment rights.
  2. Within 45 days, transfer the contract to an investor or home buyer.
  3. If I do not come up with an investor after 45 days, contract expires and I lose the ten dollars in earnest money. The contract specifically forbids any other recourse for default.

Is this a good approach? Again, I am new to this type of investing. I have only invested traditionally with real estate.

I am writing up a contract this weekend, so any help and specifics are appreciated.

Thanks

2

Looks fine.

Not sure, if the person would be willing to wait 45 days, especially if the homeowners property is in financial distress. I’d recommend, you try to find buyers now, because your going to make the homeowner very skeptical.

Make sure you put the three points in different places in the contract. You dont wont to scare the homeowner by hitting them with all that information at once.

3

Thank you.
Is there a better way that you could recommend to accomplish the same thing? I understand that I should be advertising all of the time for investors, but as far as the way that I assign the contract, is there a better way to do it?

What do you do?

4

$10 earnest money sounds fine.

Couldn’t you just give yourself a more realistic amount of time to sell your contract to a buyer? Like 5 business days and if you can’t find someone, make sure you have an exit clause in your contract that let’s you back out of the deal in the event you can’t find an investor.

Word it something like this:

This offer is subject to and contingent upon the inspection of said property by Buyer’s investors within ___ days (can vary) of acceptance of this offer. Should Buyers investors not approve of said property the sellers do hereby advise, authorize and instructs the escrow /title company (neutral third party handling the transaction, could also be an attorney, real estate company or notary in some parts of the country) to immediately refund all earnest money deposits back to the Buyer.

And it’s a really good idea to have a buyer’s list already instead of waiting until you have a contract. IMHO.