It’s a pleasure to now be a member of this site. Currently serving on active duty orders over seas but making the most of my time here on this site and other entrueprener and business blogs/sites. I have been famliar with RE investing for a few years and have read and reread books on it but have not made that first step. Wholesaling is where I want to focus my attention and progress from there. I am stationed in WA, so I have been researching the areas looking at homes for sale and using various sites(i.e. yahoo real estate, homes.com, zillow.com) seeing what they are asking and what these sites estimate their worth. Basically to feel it out.
My question after you know my position is…
What are the next steps to take in order to make a successful assignment of contract?
If you have scenarious how you did it please post so I can get a better understanding of how they played out. Thank you
Ok, you found a deal. Write an all cash offer to purchase. Once all parties have signed, take it to a title company or escrow company so that they can get it ready to close by doing a title search.
Make an offer. The offer should you have “and or assigns” after you are name as the buyer. You should also retain the right to inspect and re-inspect the property prior to closing, giving the seller at least day notice before any inspections. This allows you to let other investors come and see the property to make a buying decision.
Get the seller to put a lock box on the door to help facilitate entry if the home is vacant.
Find a buyer who wants the home. Have them execute an assignment contract with you, effectively taking over your position to perform on the contract based on the terms and conditions set forth in the contract. An assignment fee will then be collected from the new buyer prior to closing. This fee is typically $1000-$5000, but can be anything that is mutually agreed upon. Also, have the new buyer reimburse you for any earnest money that has been deposited. Hopefully there was none required on the original contract.
Collect the fee. Give a copy of the assignment document to the title company with the buyers contact information. That’s it. You’ve just tied up a property, assigned the contract, and got paid prior to closing.
PS: you can write an escape clause something like “the offer is subject to my partner’s approval.”, but I wouldn’t recommend.
I hope this helps.
I’m also in the military been to the sand box twice.
Never have been able to figure out why many new investors choose wholesaling as the strategy of choice. I would think it’s difficult for someone with little or no experience to be able to make offers at 50% less than the homeowner is asking.
Look at Cooperative Assignments, instead. A heck of a lot easier to get a homeowner to agree to a full retail offer.
@ AJ290, I’ve never heard of “Cooperative Assignments” before. Could you elaborate on that? Or point to a link and/or site that goes into further detail? Thanks so much.