Posted by Lori Samson on June 12, 2000 at 18:53:11:
Lori
Assignment w/ L/O - Posted by Joe_E
Posted by Joe_E on June 10, 2000 at 18:45:32:
Are you looking for trouble when you are doing assignments with Lease Purchasing? I was thinking of doing assignments and/or sandwiches Lease Purchasing.
Someone I respect said when doing assignments, that when things go wrong they blame you. Any comments?
Re: Assignment w/ L/O - Posted by WilliamGA
Posted by WilliamGA on June 10, 2000 at 20:48:45:
Joe,
I believe that if you make a commitment to someone to solve their real estate problem, you have a moral if not legal obligation to keep that promise. With that being said, I have a problem with assignment of deals, whether it be a L/O or a “subject to”.
When you assign the deal, you lose all control over how things are taken care of. Whether the sellers payments get made, property gets taken care of, things like that. Since I personally made the promise, I feel the need to follow through with it.
Alot of people here talk about assigning the deal and walking away with the cash. They talk about how it is ok because the seller signed a “CYA” letter, but I believe a desperate person like a seller who is behind on payments will do alot of things to get out of a jam.
Is makes sense that if they saw you as the answer to their prayers and you handed it off to someone who dropped the ball that they would still blame you.
CYA letter or not, I made the promise so I follow through until a new loan is in place.
I know some here will disagree, this is just my opinion.
WilliamGA
Re: Assignment w/ L/O…always unethical? - Posted by Mel
Posted by Mel on June 11, 2000 at 10:22:25:
I’m still a newbie to the biz, but I dont think that that much matters when it comes to ethical questions. I think that I have to disagree with the concept that any assignments of a L/O would be unethical. In fact I made an offer just this week to L/O a property that I would assign.
This was the sellers situation. He has a house worth about 195K he owes about 193K and is about 3-4K behind on his mortgage. His house is located almost four hrs away from me.
I told him that I might be able to help with a lease purchase, then went on to explain the details. I told him that would not be able to stay in the deal and that my intent would be to assign it. He has not yet decided.
Now my question is this; Is that offer unethical? If so what should I do in this case? Would I be better of just turning him away and sending him to certain forecloser? Isn’t he alot better off if he takes the offer?
I am of the opinion that as long as they know when you make the offer that your intent is to assign it, then you are OK. I dont think that you should tell them that you will be there and just slide in the right to assign, that WOULD be unethical.
I dont mean this to be argumentative, and I do welcome other opinions (or other offers that I could make this seller). I think that ethics is a topic that doesn’t get enough attention. We are in a position in REI that we could take advantage of alot of desperate people. As a result of a few scumbags our collective reputation is being tarnished!
Thats my opinion anyway. I welcome others.
I Agree!! (nt) - Posted by Soraya(SanDiego)
Posted by Soraya(SanDiego) on June 11, 2000 at 24:16:26:
nt
Re: Assignment w/ L/O…always unethical? - Posted by WilliamGA
Posted by WilliamGA on June 11, 2000 at 10:37:19:
Before I would take on a property that was hours away from me, I would pass it on in the beginning to another investor. I do this quite frequently in fact. If I know an investor in that area I will simply call them up and pass on the info and let them go do the deal. I wouldn’t “let them go to foreclosure”.
The original topic in my previous post was whether or not assignment was a good idea because if it goes south, the sellers will blame you. I believe that no matter what you tell them about “I will be assigning this agreement” or “I need you to sign this letter saying it is ok if I assign this agreement”, YOU are still obligated to follow through. Hard to do that if you are out of the picture.
As I said before, some people here will not agree with this. I already know this. Myself, I just have a problem with making the promises and then relying on someone else to keep them.
Re: I’m about as ethical as they come! - Posted by Lori Samon
Posted by Lori Samon on June 11, 2000 at 16:52:54:
Anyone who knows me would say so! I don’t do certain types of deals because I just won’t take advantage of people! Period! End of sentence!
However… I have no problem assigning a lease option. I have done plenty and I have never had a problem! I went into the deal with all parties knowing where I stood and if I would have had a problem arise I would have tried to help all I could to all who were concerned in the deal. It’s an issue of being ethical to all concerned in the deal but by doing a deal that gets assigned has nothing to do with ethics! On the other hand, how you put it together might.
Be fair in all you do and you will ward off problems but if they do come… try to remember to communicate at all cost and if that doesn’t work… run like %#$@ to your attorney! I have had only one problem since I got into real estate and I tried and tried to get them to mediate the situation but they were one of the types of people that get tunnel vision to their side and can’t see their own nose in spite of their face! I ended up paying them to get out of the house and that was the end of that and I moved on. I did learn a great deal in dealing with trouble makers… give them what they want and get them out! Oh! Happy is he that can move on!
Lori
Re: I’m about as ethical as they come!..Thanks. - Posted by Mel
Posted by Mel on June 11, 2000 at 18:45:59:
Lori, thanks for the backup. I was starting to think that maybe I WAS wrong.
I always try to make sure that I am treating everyone fairly and honestly.
By the way Lori, I would like to say thanks. Not just for this post but for all the quality posts that you have every week. I read them all, and I really admire the way that you do business.
Mel