Tammi,
Whenever I have dealt with FSBO’s, I have never shown any proof of funds. You need to find motivated sellers. They hardly ask for proof of funds.
On the contrary, if you will make offer on REO’s or through realtors, most will ask for proof of funds and earnest money which could range from $500-$1000.
You could go to a mtg broker and ask them to write you a letter or you can focus on dealing with FSBO’s, where proof of funds are not required.
The answer to your other question is NO. When you do a simultaneous closing, the seller deeds the property to you and you deed it to your investor. There are 2 deeds recorded and 2 transfer taxes paid.
An assignment is when you simply sell your contract to an investor for cash.
A good title company can handle simultaneous closes in such a way where all the funds come from your investor and you don’t have to come up with any funds.
The preferable method of doing flips is through an assignment, but if your profit is big, you might want to consider doing a simultaneous close and pay the extra closing costs associated with it.
Hope this helps
Tarun_md
I am learning the ropes and trying to really focus on “flipping” properties to begin my real estate investing career. I have a very simple question, and yes, I have read the how-to articles, daily posts, done archive searches and am currently reading a book that is kind of general on real estate investing, I also have one of Legrand’s on order.
All of this has been extremely educational to say the least, maybe my question is just so common sense and simple it is never actually spelled out.
Here goes: assuming that i have an investor/buyer with cash ready to buy my property, and i have a good contract with an “assign to” clause, and I am ready to place a contract on a property, will the seller be asking for a qualification letter from me, or what sort of proof that I am going to buy the property? In the case that I am doing a simeltaneous closing, I wouldn’t actually “buy” it would I, just assign to my buyer, right? Because I wouldn’t provide the financing, that’s where the investor/buyer comes in??? I know that a pre-qualification letter is not hard to obtain, but I don’t want to go through a mortgage company to prove I will buy the house when I am not actually going to, isn’t that what a flip is for? to cut all of that out and make some money quick, with minimal up-front money and without all of the credit reports, etc? Does my question make sense? Also, does anyone have any suggestions on any good books specifically dealing with this area? Any help/information would be greatly appreciated!!!
Thanks, Tammi
Posted by Ed Copp (OH) on March 20, 2000 at 20:55:19:
Tammi,
It sounds like you have a pretty good understanding of the situation. Now take 3 deep breaths… O.K. If you have a cash buyer there will be only 1 closing. So you will NOT need to worry about credit checks and other qualifications. Cash makes it’s own very big noise. You will need to assign your contract (position) to the cash buyer. You might assign and take a note for your newly created equity, and then have the closing agent give you a check at the closing for your note. That would be one way to get this done.
You mention placing a contract on the property…, I like to think of this process as negotiating a solution for the sellers’ problem, rather than doing something to the property. If you really do have a cash buyer, and the seller really wants to sell (is motivated), you then have a win/win situation. If there are no problems a deal like this can close in a few days, and everyone should be very happy. You should be very well paid for your part in this transaction (in the form of a check). Good luck…ED.