Conventional Financing Question

Bird Dogs, Wholesaling
1

I hear alot of wholesale experts talk about how conventional lenders dont want to see an assignment contract. I understand that part, but there is alot of people stating that they wont finance the assignment fee also. I dont get it. If I have a property under contract for 100,000 and i have an end-buyer who is willing to take it for 110,000. if i have taken the role of the seller how come i cant sell it for 110,000 and have them get the conventional loan for that amount and take in the difference? Their not financing the assignment fee their just financing the cost to purchase that house.

Please help me with this!

2

Just do a double close and the seller won’t know what you’re making. No assignment but just a big payday at close for you. Minus expences of course. Herbster

3

You can definitely do this, however it won’t be an assignment. You have to structure it differently.
One way is to record your interest in the deal and the title company will pay you to release your
interest/lien on the property.

Another would be to have the seller pay you the fee at closing…

But 99% of the time, it won’t happen as an assignment. Assignments are great for people who
will be using cash to buy the house…

HTH

4

Jeff, couldn’t the investor just release his contract at closing for his/her fee? Herbster

5

Yes, you can do that. There are some title companies that won’t
allow this, but there are many that will. You just need to call
around and ask…

The best way that we have found to get paid without doing
a double closing is by recording a promissory note for our
profit.

Nothing wrong with double closing, but if you have a deal
that’s a little less, $5,000 or so, double closing will eat away
your profit…

The above technique is of course only for fsbo or non-listed,
non bank owned properties…

6

Jeff, thats what I wanted to hear. Now is the promissory note secured by the property? Thanks, Herbster

7

It can be just a regular promissory note
that is notarized, so you can record it
at the court house.

A good idea would be to look at some
promissory notes that were recorded
in your local county clerks office so you
can refer to those, if needed…