I have another real estate investor who has a contract signed to buy a property. He wants to assign the contract to me for a fee. What is the typical price for an assignment? What information should I know concerning buying an assignment on a property that is being foreclosed on?
This is one of those questions that has more then one answer.
How much equity is in the property.
Has he or is he doing a short sale.
The crazy thing about this type of a deal is if he did it correct he would double close the deal and you as an investor would never know how much he made.
The only difference in buying a Pre-forclosure and a normal purchase is the simple fact you are on a time frame. The other difference is the simple fact there are some banks that will not lend on what they call a foreclosure bail out. And sometimes the rates are higher.
Keep in mind that if there was a short sale done on the property and if it was done correct there should be a minimum of 25-30% equity in the house.
I hope this helped
Robb O.
Thanks Robb O,
The property has a BPO of $85,000.
He told me it has a second mortgage for $13,000 that he is negotiating. He said that the second lien holder wants 25% of the balance which is around $3,250. He won’t tell me what the first lien amont is. We made an intial offer of $62,000. He counter offered at $66,500 contigent on if he works out a better deal with the second mortgage. When we first met he wanted $75,000 and later dropped down to $70,000 four days later. We are at $66,500 and now he is considering assigning the contract.
Tell him you except the the $66,500 and ask for a 3% seller consession towards closing costs! so that is $66,500 minus $1,995 bringing you to $64,505 right in the middle. Then there is less money out of your pocket at the table!
Thanks reoconsultants!
I want to wait and see what price he comes up with for just assigning the contract. Does this make sense?
Yeah I would as well. Good luck and keep us informed as to what goes on.