Re: ASSIGN/FLIP - Posted by JoeB(Atlanta)
Posted by JoeB(Atlanta) on December 08, 1999 at 14:36:16:
Annette, whenever we go under contract to buy a property we always record an “Affadavit & Memorandum of Purchase Agreement” at the courthouse, showing the name of buyer(us) and seller, closing date, address and our phone number.
This “clouds” the title so that if another buyer goes behind your back to seller and draws up another contract the title exam for their closing will turn up your Affadavit/Interest in the property and call you…this has happened to us several times. Then we either proceed with our original contract or flip our contract to the new behind-our-back buyer for a fee, if he desires.
Your second question: pros of flipping the contract are that no purchase money is required and you make a quick profit, cons of flipping the contract is that some lenders (ie your new buyers’ lender) object to funding a flipped contract (in the Atlanta area we have had this experience), especially one where more than $5k to $10k of profit is being paid to you on settlement statement…in that case you can try to setup a double/simultaneous closing.
Hope this helps,