Joe, or anyone else with considerable knowledge. I am currently looking at flipping a HUD property listed through a RE agent.It is a 3 family and they are asking 40k. Rents average 500 per month, seems like an attractive property to hold but I am still new and want to flip before I rehab/ buy and hold. Would my best option be to submit my offer with a trust as the buyer? then flip the trust for an assignment fee? and how do I set up a trust in this case? Would it be easier to make an offer and then simply use an assignment of contract form similiar to the one on legalwiz.com?
Thanks in advance— Matt
Assigning Contracts of Wholesale Properties - Posted by C.T. Austin
Posted by C.T. Austin on February 18, 2002 at 09:10:31:
Wholesalers, how do get around the Non-Assignment clause in Purchase Contracts when dealing with Realtors,Bank REO’s,Hud,FHA etc. ?? Would Double Closings be the only way to Go ??
Thanks in advance for your responses …
C.T. Austin …
Re: Assigning Contracts of Wholesale Properties - Posted by Greg Schultz
Posted by Greg Schultz on February 20, 2002 at 13:14:19:
I have assigned one property to this buyer. I had a contract on a property for 37K and just to get my foot in the door with these guys, I assigned it to them for 2K = 5.4% of contract price.
This deal is a 12 unit, price is 270K…is asking 3% of contract price to much?
Is there some guide lines or is it get what you can get?
Re: Assigning Contracts of Wholesale Properties - Posted by C.T. Austin
Posted by C.T. Austin on February 18, 2002 at 21:07:08:
Thanks for all the Great Input … JoeS, when will your system be published & hit the market ?? JoeKaiser, Your Abandoned Properties program is definitely my next purchase … Thanks again to All …
Depends on your state law regarding the wording of contracts. Here in NY if a contract lacks the wording that it is NOT assignable, then IT IS assignable. On my contract to buy, I simply leave out any mention of assignability on my part. Then it is legally assignable. I have not had a bank, or other reo catch it yet. Besides, all they want is the place off their books. Check with your attorney.
Re: Assigning Contracts of Wholesale Properties - Posted by JoeKaiser
Posted by JoeKaiser on February 18, 2002 at 13:17:52:
The better way to go is to make all your documentation “portable.” You do that by naming a trust as the buyer. Now, when it comes time for your guy to step into your shoes and close the sale, you simple collect your assignment money and give him the trust.
There is no assigning of the paperwork, just the entity buying the thing.
Re: Assigning Contracts of Wholesale Properties - Posted by Brent_IL
Posted by Brent_IL on February 18, 2002 at 09:30:57:
William Bronchick has a free “assignment of purchase contract” form on his website at www.legalwiz.com/forms.htm
The form is in Portable Document Format (“PDF”) and requires Adobe Acrobat to view and print. If you don’t have Acrobat, go to www.adobe.com and download a copy of the Reader. You won’t be able to print, but you can hand-copy and type it in Word.
Use that agreement as an addendum to the standard purchase contract. Bank REO departments and most government programs won’t accept an assignment clause, but most Realtors don’t have a problem with it.
It might be easier to black-out the clause you don’t like, and write, “and/or assigns”, after the buyer’s name and counter-offer, or use a different contract.
Re: Assigning Contracts of Wholesale Properties - Posted by SCook85
Posted by SCook85 on February 20, 2002 at 08:03:11:
Joe,
What banks are you dealing with. All of the big banks with the most foreclosures have their own addendums which over ride anything that your contracrts say or don’t say. They do catch it, they have been burned numerous times and they have set their documents up to make sure they don’t get burned any more.
Re: Assigning Contracts of Wholesale Properties - Posted by C.T. Austin
Posted by C.T. Austin on February 18, 2002 at 21:23:14:
Thanks for all the Great Input … JoeS, when will your system be published & hit the market ?? JoeKaiser, Your Abandoned Properties program is definitely my next purchase … Thanks again to All …