cooperative assignme

Hi Everybody,

Can someone please explain in detail what a cooperative assignments is?
I have an idea but… so did Evil Kaneval… jumping a canyon in a rocket car!!! :shocked


Sign up a lease option. Assign it to someone else with the seller’s consent.

That’s a cooperative assignment.

I would stay away from those. You assign away your right but not your responsibility. Very Dangerous!!

Just my 2 cents though.

Quite frankly I think that’s nonsense, but maybe you live in crazytown. If so don’t assign it then. Have either the buyer or seller pay you to release your contract so they can sign directly with the other party.

You couldn’t be more wrong. They are about as safe and simple a technique for investing in real estate as you’ll ever find.

I personally know other investors that have been named in lawsuits because they assigned a l/o and something went wrong. I don’t need the headache. ( I have enough of those on my own.) It just seems too risky in my opinion. But hey, that’s what this place is for. People discuss their experiences and opinions on topics. I just personally don’t do l/o assignments. I’m still curious why people do that anyways. Talk about throwing money away. :flush

You do them when the deal isn’t fat enough to stay in the middle. Or when you don’t want the responsibility of very large payments.

For example my cut-off for Sandwich L/Os in my market is about $300k. But I’ll do CAs for higher end homes. I’ll also do CAs if the seller’s payments are too high for me to realize a decent cash flow and they aren’t willing to come out of pocket for the difference. I’ll also do CAs on less desirable homes like 1 and 2 bedroom or unusual situations.

For example I got a lead today on a detached house that has no parking. Do I want to do a SLO on that? No thanks. But I’ll sign it up and see if one of my T/Bs wants the contract. Potential $5k for something that takes a few minutes to post on my website…or walk away? I’ll take the potential payday.

I accomplish the same thing with an option. I’m in and out for a couple with grand. :beer

Options! I can’t sell the damn things! Heck I have 4 options right now, I thought I’ve give them a try since one is 15% below market and in perfect condition. The other 3 are rehabs at between 30 to 50% of ARV. Can’t sell any of them. The nice one has attracted 15 tenant/buyers though. Too bad the seller won’t L/O!

Except that in today’s market it is a heck of a lot easier to find a tenant/buyer than a buyer for an outright purchase.

Exactly. That’s what I do. I get an option to purchase and/or lease then find a t/b for the seller. Collect a fee from the seller(usually part of the option money from the t/b) and I’m done. We are probably all doing the same thing just using different forms to accomplish a similar goal.

Sounds like it.

I think that’s because they did it wrong. If you unilaterally assign your deal, when the assignee doesn’t perform you can be required to perform. If you obtain a release from the optionor at the same time you assign you’re safe. The legal term for this is “novation”. It is frequently seen in loan assumptions, where a mere assumption still leaves the original debtor obligated to pay. The debtor must convince the mortgagee to accept a novation agreement in order to be released from their obligation to pay the loan. See .

That’s how I do an assignment. The assignee (buyer), seller, and assignor (me) all sign the assignment contract and both buyer and seller agree to release me from any further obligation or involvement.

Is this all done in the same room? It seems like far too much temptation to defect should the assignee and the optionor meet each other before this agreement has been signed.

I agree with Doug, if done right (proper cya contracts) CA’s are less risky.

Naked Investor has one of the best ones out there.

[quote author=randian link=topic=32285.msg150531#msg150531 date=1193187342]
Is this all done in the same room? It seems like far too much temptation to defect should the assignee and the optionor meet each other before this agreement has been signed./quote]That’s not much of a problem since by that point the assignee has already given me the money and signed a receipt stating that it is non-refundable under any circumstances. The signing of the assignment contract is kind of like when you come in to sign the closing papers at the attorney/title office. The deal is already done, it’s just a formality really.