I would go with the contract agreement with the right to assign. Rather than the assignment contract. It will make things run a little smoother. Thats all I can tell you. Sorry . Get a few more opinions first.
I am NOT an attorney and I do NOT claim to be a “know-it-all-investor”. These steps are porvided simply suggestions (or a guide if you will) and are NOT meant as legal and binding procedure. If you feel uneasy or unsure about this process or have ANY questions about anything stated herein, I would strongly suggest consulting a Real Estate and/or contract attorney!
Okay, now that we got that out of the way…
Find a house for sale, focusing on a seller who is motivated (in this case “Jon”) so you can negotiate a below-market price.
Sign a contract with tht seller (Jon) for you negotiated low price, being sure to add “and/or assigns” to the line that has your name as the buyer. (The “and/or assigns” language will allow you to assign this contract to someone else.)
Advetise the house to investors (in this case “Joe”). You are looking for someone who will take over the contractyou signed with your seller,and pay you for the right to do so. This is your “assignment fee”.
In order for this to be attractive to the investor, the numbers need to be right. In other words, you need to work the deal out so that Joe can pay Jon what he wants, Joe can make money on the house when he fixes it up, rents it out, flips it to another investor or what have you, and still pay you your assignment fee. If the numbers don’t work, then obviously, you just found a property for another investor for free. (I guess that could be considered your service to the investing community!!! )
Your investor, Joe, will take the contract over from there and buy the house from the seller directly. Again, the “and/or assigns” language allows them to close for you because you have “assigned” the contract to them.
I’ve learned that it’s advisable to ALWAYS disclose to the seller what you are doing. That way there is no confusion (or at least as little confusion as possible) when closing the deal. It’s never happened to me, but I’ve heard that there’s nothing worse than having your seller ask you, “Who the heck is this, and why am I signing paperwork with him?”
Just a tip:
In your contract, you might wanna add what I call a “backdoor clause”. Something that says the deal is valid only per the inspection and approval of “specified party” --or-- your “partner’s” --or-- “investor’s” approval. Your investor, partner or specified party can be anybody (your cousin, your uncle, your brother, your grandma’s dog, etc…I think you get the picture).
At any rate, that’s my two cents!
It sounds to me like you’ve got ‘em set up, now ya’ just gotta knock 'em down!!!