HI all new here
I want to get started in Comm RE so my question is
If I just find and get contract signed will I need any money to do this? after which I would flip contract or find investors to complete the deal and make a fee.
thanks for your time danny
Hi,
In most commercial transactions (97 out of 100) you will need to deposit earnest money with your contract to open escrow!
Now with that said if you have built a buyers list and are seeking properties your buyers are looking for, you can make a deal on a Friday afternoon, and have reasonable until Tuesday to open escrow and deposit earnest money!
If you have buyers you will want to do an assignment to them as transactional funding is not available for commercial property! You might be able to make a few thousand and move a small commercial property this way! Rule of thumb is your assignment fee should not exceed 6% of cost!
The reason that standard is used is that this threshold is about the max someone will pay out of pocket for the rights to a property before they will say “______ it” and look for something different! Assignment fee’s can not be included in the hud 1 and can not be borrowed as the funds are outside of the contract!
GR
I’m not sure 6% is a rule of thumb. If you negotiate a price where you get 20% and its a good deal to the buyer, then I’m sure they will jump on it if its a good deal.
Now if you think you are making too much instead of doing an assignment you can do a double close. It’s a lot of people worried about how much money you are putting in your pocket instead of looking to see if its a good deal or not. That’s why a double close will take care of the people that does not want the next person to make a lot of money.