HELP! I have a contract to purchase a property from seller and I have a buyer...

I have a contract to purchase a property from a seller and I have a buyer in place, but I don’t want to take possession of the property in order to turn around and sell the property to the buyer.

I was thinking of setting up the contract as me charging the buyer a fee, so that way I would be able to get my profit that way.

What do you think???

Any suggestions would be appreciated.

Thanks in advance!!

I have that form too… It is a simple assignment of contract… However why not do a concurrent closing?

I didn’t want to buy the property and then turn around and sell it to the new buyer.
Will I be able to assign the contract to the new buyer and include my fee with the price?


That depends on your DRE regulations… In california you may have an issue after a certain amount of transactions unless a broker is representing you…

Good Luck


You have everything you need in place. You don’t have to take possession of the property to control the transaction and make a nice chunk of change, far more than if you panic now. If you charge the buyer a fee without being a broker, you’re headed for trouble.

I am assuming your deal is a “subject to” and you don’t want your name on title for whatever reason. I suggest you do this.


Tell the Seller you must structure the deal to best protect everyone’s interests.

Tell him: "If you are willing to wait up to 3 years for most or all of your equity, and remain on your loan for 3 years I am prepared to legally assume 100% of the responsiblility for all mortgage obligations, maintenance and repairs, management and upkeep of your property. As a real estate investor, I make this proposal in the hopes of obtaining income tax benefits relative to mortgage interest and property taxes. I will agree to pay 100% of your equity in 3 years and reserve the right to sublet the property, while fully guaranteeing the performance of such a pre-screened party re payments, insurance, taxes, maintenance, etc.

During my tenure in our agreement I ask only that you continue the existing mortgage financing in place, and that the property be held in a bonafide land trust in your name (AT MY EXPENSE). I require only that you name me a Co-Beneficiary of the trust, and a triple-net lease tenant in the premises. You are not obligated to transfer the property’s title to me until I have fully retired your existing mortgage and repaid current equity.

He should have no problem with that. He doesn’t have to worry about dealing with the tax results of a sale because there has not been one, and he can depreciate the property for the next 3 years.


Then tell your Buyer that the home you have is in a land trust and you need him to live in the property, make the payments on time, and be responsible for maintenance and repairs on a 3-year, triple net lease. Tell him: “There will be no bank or credit qualifying. If you agree to this and keep your end of the bargain, I’ll give you the house. How? When you sign the lease and pay the closing costs (your cost of setting up the trust and 3 advance lease payments, I will immediately assign you a Beneficiary interest in my trust. You will, although only leasing, acquire IMMEDIATE home ownership benefits and are allowed by the IRS to write off the monthly mortgage interest payments and property taxes. You will also share in the future appreciation of the home on a 50/50 basis. At the end of three years, if you want to buy the property, you can do so at Fair Market Value. If you choose not to, there is no obligation or penalty.”


If your Mutually Agreed Value (MAV) is $100K with the Seller, your MAV may be $110K with the Buyer. That’s $10K in 3 years when the Tenant refis and buys you out. Make sure you have about a $200 per month positive cash flow. (another $7200 over 3 years); and split future appreciation 50/50 with your Tenant. If it sells in 3 years for $140K, you’ve made another $15K.

To summarize, you will make about $32,500 on this deal over 3 years without going on title or on any loans. You have zero responsibility for maintenance or repairs (your tenant does), and zero responsibility for payments (your tenant does), and zero responsibility for collecting rents (the Trustee’s payment processing company does that). You just collect your $200 positive cash flow in the mail each month.

That’s how I do it and I’ll be happy to answer any questions. Best of luck to you, and don’t be afraid – just be careful.

Da Wiz

Da wiz,

Do you always put the land trust in the sellers name?? Or is this situation special for the person posting?

How do you find buyers before you own the property?

Does this type of deal give you enough time to work with pre-foreclosures?

Whats the best way to learn excatly how land trusts are set up and the forms I will need? I am hoping to find something at my local law library, as I’m cheap and don’t like to buy books!

Without knowing what kind of contract you’ve got and what kind of buyer you’ve got, we can only spectulate, but I’m going to assume that you have it under contract to buy (in any way, shape or form, be it sub2, cash, or monopoly money), and from your post, you have a buyer that is NOT wanting to be a tenant, but actually getting financing/cash to close the deal.

With that in mind, there are a number of legal ways to get paid without jumping through alot of hoops.

One, you can assign your contract. In short, what that is that you “sell” your position in the contract (ie BUYER) to the end buyer for a fee. If you’ve got a property under contract for $100K and a buyer wants to give you $110K, then you assign that contract for $10K.

Now, if you didn’t setup your contract to allow you to assign, you can still do it, but you must have the sellers written permission to do so. With an assignment you may have to wait until it actually closes before getting your assignment fee. Even if you do collect it upfront, it will still show up on the HUD-1 statement, so the seller will know how much you made. Just FYI in case this is an issue to you.

Two, you can do a double closing. That requires two closings, two sets of closing costs, but it does keep your profit out of sight of the sellers. But you don’t want to do that.

Three, if you have a strong buyer (they are actually able to close), then you could approach the seller and say that you’ve got someone else that is interested in buying their property. If you can get that buyer to sign a new contract for the same terms, conditions and closing time frame that you currently have, would they do that? Why wouldn’t they since they’ve already agreed to it? Then you have your buyers pay you to “recind” your contract by signing a Rescission of Contract. Your fee, of course, is the difference between your contract and what they are willing to pay. This way, you collect your money upfront and it’s not reported on the HUD-1 statement.


Hi JB,

Yes, I always put the trust in the seller’s name. If you don’t you will be in violation of the DOSC. It protects the seller and his equity and gives you all the control you need.

I don’t work pre-foreclosures ordinarily but, yes, you do have enough time if you know what you are doing.

Da Wiz

My title company and attorney have told me to do different things ( I want to follow what my attorney said to do) Title company said that I can charge a consultant fee to the new buy at closing without taking possesion of the property and my attorney has advised me against it, stating that I’m not a realtor, so I can’t charge a fee. DaWiz actually stated that I can’t charge a fee to the buyers as well.

So, I want to take another route. If I do back 2 back closings then I will have to pay closing cost twice like Roger J said.

Are there any other ways I can structure these deals?

I actually have 4 properties under contract with 1 seller and I have buyer’s in place for 2 of them, and I was thinking of selling my other 2 contracts (I’m in Florida by the way).

I’m not doing a subject two on none of the properties, the seller does not want to put his credit on the line in that way.

DaWiz, thank you for your advice regarding land trust, I really do appreciate it.

Thanks and God bless!!!

Your situation is very easy to stay within legal boundries and carryout your objective…

Any suggestions?

Hello Dawiz!!

Maybe a dumb question, but if you leave the 10% to the seller which I think is the IRS min right? What does this mean the seller can do now? Collect 10% of the selling profits?

No. The trust reads that when the seller’s mtg is paid off and he receives his agreed upon equity, he grants you his remaining 10%.

Da Wiz


I gave you three options, any of which should work on these deals.

Good luck,


Thanks Raj!