Posted by The Frisco Kid on May 06, 2006 at 21:37:54:
Joe
O.K, your pardoned, but don’t do it again unless your practicing for your congressional run. And 2008 looks like a good year to replace a few people.
Diving in to Double Closes - Posted by chandlerazguy
Posted by chandlerazguy on May 05, 2006 at 14:23:32:
Hey everyone,
I am looking to do double closes in AZ. I have located a title company who is experienced in doing double escrows, and being in the mortgage industry I am very versed in analyzing properties. I have read all the success stories and searched all the posts. I have even consulted a CPA on the tax liabilities.
This weekend I am going to start looking for properties. I plan on using bandit signs, ads in the paper, pre-foreclosures, and good old hitting the streets - pounding on doors.
I have a few diffent purchase contracts as well as the standard assignment contract. I am looking for some guidance on the purchase and assignment contracts. As one poster said before, I want to include a built in disclosures in the contract about the ?potential re-sale? (for the seller) and ?concurrent purchase escrow? (for the buyer).
Can any of you offer me some guidance on the contracts, or even a copy of the contracts you use? I will be more than happy to email you what I have.
Best Regards,
In AZ
Re: Diving in to Double Closes - Posted by MM
Posted by MM on May 06, 2006 at 04:20:16:
chandlerazguy,
A double close, and an assignment are two different things. It’s very good that you already found a title company to handle double closes, but I think you could stand to read a book or two on the topic. It’s much better to educate yourself in the comfort of your own home. With that said try looking at (a m a z o n) they have several cheap books on the topic. In case your wondering why I spelt it like that, cre has a few filters for competion, not sure if they filter them.
With all of that said, the jist of a double close on a standard purchase agreement setup is pretty simple. you contract to buy from the seller with a standard purchase agreement (including contigency clauses), then sell with another Purchase agreement ( you as the seller this time) , then at close your buyers funds pay everyone off from escrow. That was a very basic run down of it, but please do educate yourself books are cheap.
Re: Diving in to Double Closes - Posted by Joe Kaiser
Posted by Joe Kaiser on May 05, 2006 at 19:56:17:
Re: Diving in to Double Closes - Posted by chandlerazguy
Posted by chandlerazguy on May 06, 2006 at 14:57:04:
Well, I have read many books on double closes, and anyone who has read anything on the topic obviously gets the difference between an assignment and a double close. I also obviously see the advantages to a double close. Please re-read my question and if you know the answer, (adding in a built in clause) Then thanks.
Re: Diving in to Double Closes - Posted by chandlerazguy
Posted by chandlerazguy on May 05, 2006 at 20:45:10:
I appreciate the response, but I’m not concerned about having any difficulty finding the properties. I am looking to ensure I have my contracts correct. Any further help is appreciated.
Re: Diving in to Double Closes - Posted by MM
Posted by MM on May 06, 2006 at 18:37:01:
chandlerazguy,
There’s no legal requirement in my state, and none that I know of in general, which would make you disclose “potential re-sale”, or “concurrent purchase escrow”. I’ve heard of concurrent purchase and resale clauses in the sale of bonds, but not real estate.
I don’t give out contracts, because what works here may not work there you likely have different local laws, and disclosure requirements then myself. I suspect the poster you referred to was talking about an assignability clause, which can be as simple as putting
“and/or assigns” after your signature on the purchase agreement.
Contracts are generally assignable by default unless the seller includes a clause preventing, or requiring they approve the assignment. I’ve yet to hear of a state who disallows assignments.
Besides that, there’s other clauses you could/should include. A liquidated damages clause is a good one. It spells out what will happen in the event of breach of contract by either party ( it can be one sided but should include both parties). Contingent apon marketable title is another must.
Some people also use “weasel” , or “out” clauses which usually have to do with inspection, and approval at x date, or sometimes a financing clause which deals with the loan they must obtain.
I think the information you read may be substandard if you don’t know all this already. It’s of course not your fault it would be the authors. I still recommend you read a book perhaps William Bronchicks. His material is up to par.
Re: Diving in to Double Closes - Posted by Joe Kaiser
Posted by Joe Kaiser on May 06, 2006 at 24:35:00:
Well, then you’ve totally missed the point . . . and if you think finding
deals that make sense is that easy, you have a rude awakening awaiting
you.
Good luck and keep us posted. I love Chandler, AZ, btw.
Joe
Re: Diving in to Double Closes - Posted by chandlerazguy
Posted by chandlerazguy on May 07, 2006 at 17:40:29:
Just wanted to say I picked up Flipping Houses by William Bronchick last night, and I am on my way to the pool to crack a cold one and give it a read!
Thanks MM - Posted by chandlerazguy
Posted by chandlerazguy on May 06, 2006 at 20:27:07:
Just wanted to say thanks for the info. I will definitely look into reading some on Bronchicks material. I guess at this point I have three or four different purchase contracts in hand. I am pretty aware of necessary clauses as my father is a Realtor (the only realtor I like : ) , and I also work as a mortgage broker. So, should I edit one that will include the basics as well as what I would like to include? I will have my father look over this, as well as my title company. - but I just wanted to make sure this is something I can do myself, and not something I need to pay a Real Estate Attorney to prepare.
Re: Diving in to Double Closes - Posted by chandlerazguy
Posted by chandlerazguy on May 06, 2006 at 14:53:11:
Buddy, That’s not the problem. I already come across 2-3 deals every month. I’m just now going to start taking advantage of them. My post was never about locating properties. It’s about writing good contracts. Do you have any advice to offer me about that? Or are you just giving me free negative thoughts?
Re: Diving in to Double Closes - Posted by The Frisco Kid
Posted by The Frisco Kid on May 06, 2006 at 11:20:27:
Joe
Now your starting to sound like the typical corrupt politician, get asked one thing, and give an answer for something else. If you can help the guy with his contracts question fine, but if you can’t, or won’t, then don’t. If anyone missed the point this time you did.
Re: Thanks MM - Posted by MM
Posted by MM on May 07, 2006 at 03:04:46:
chandlerazguy ,
Your welcome. As for you writing the contract yourself, you can, but I recommend people use lawyers so they can get familiar with their local laws. There may be clauses very local to your area. With your father being a realtor though, I’m sure you could wing it on your own with a modified Board of Realtors approved purchase agreement. One more thing that you should get for assignments, if you don’t already have it, is a release of liability. This insures a seller can’t come after you for breach of contract if the person you assign the contract to backs out. Once they release you they release you from all obligations in the agreement.
Re: Diving in to Double Closes - Posted by Joe Kaiser
Posted by Joe Kaiser on May 06, 2006 at 15:18:59:
About negative thoughts . . .
You say it like it’s a bad thing. It’s not. Negative thoughts are what
successful investors dwell on. We do that for a reason . . . so we can
plan and prepare.
Good luck with that.
Joe
Re: Diving in to Double Closes - Posted by Joe Kaiser
Posted by Joe Kaiser on May 06, 2006 at 12:14:30:
A “typical corrupt politician?” . . . yeah, that’s EXACTLY what I sound like.
When I see someone making an obvious mistake, I tend to point it out to
help them see the error of their ways or keep them out of trouble. Pardon
me.
Joe
Re: Thanks MM - Posted by chandlerazguy
Posted by chandlerazguy on May 07, 2006 at 14:21:54:
Thanks MM! That tip about the realease of liablility is worth it’s weight in gold.