Flipping - Posted by Richie

import · February 26, 2002, 5:45am

Posted by GboroEd on February 26, 2002 at 19:22:10:

NT

import · February 26, 2002, 5:45am

Posted by Richie on February 26, 2002 at 06:45:43:

I have only one question regarding flipping. If I negotiate terms with a seller, will those terms be available if I turn around and flip the contract to someone else? Not to sound unethical, but what if I were to unintentionally flip to someone with horrible credit?
Just wondering…

Thanks

import · February 26, 2002, 1:21pm

Re: Flipping - Posted by SCook85

Posted by SCook85 on February 26, 2002 at 14:21:53:

Richie,

In addition to what Joe had to say, I’m guessing that you are talking about negotiating terms like owner financing with the seller, and then assigning the contract to another buyer who may have bad credit.

Technically, if your contract does not say that it is non-assignable then you can assign it to anyone you want. However I don’t believe that the seller would have to give owner financing to anyone other then the persons name that is on the contract.

Happy Investing,

Steve

import · February 26, 2002, 6:17am

Re: Flipping - Posted by JoeS

Posted by JoeS on February 26, 2002 at 07:17:16:

You negotiate a contract to buy with the seller. Then you enter into an agreement with a buyer to buy your contract as it stands, no changes. At this point the seller is unaware that anyone else but you is buying their property. If the contract buyer is unable to follow through, YOU are still responsible to perform on the contract. Remember, the seller has a signed contract with you.

The credit of the buyer really does not matter, unless it means they cannot get financed. Whatever their circumstances, the seller will be looking to you to fulfill the contract. I hope this helps and did not confuse you.

import · February 26, 2002, 4:30pm

Re: Flipping - Posted by Brent_IL

Posted by Brent_IL on February 26, 2002 at 17:30:31:

Steve,

Many years ago, I was advised to word the assignment clause to say that upon notice I could assign the purchaser?s rights and obligations under the contract in full or in part without seller’s approval and purchaser shall be relieved from further liability.

I had encountered the situation you described where the seller didn’t want to give the financing to another. Since then, there hasn’t been a problem. It’s the “liabilities” part that makes it stick.

Brent

import · February 26, 2002, 7:22am

Re: Flipping - Posted by GboroEd

Posted by GboroEd on February 26, 2002 at 08:22:38:

This is why you have an escape clause if you can’t fund the purcase

import · February 26, 2002, 10:42am

Re: Flipping - Posted by JoeS

Posted by JoeS on February 26, 2002 at 11:42:33:

Escape clauses are fine, as long as they are not abused. Some people have put them in there knowing full well that they will probably use it. You should have alternative financing lined up, it helps with your CREDIBILITY! Just my humble opinion.