Help with the Detials on A Cooperative Assignment - Posted by Ryan Brown

Posted by CurtNY on January 24, 2002 at 12:34:49:

I’m not a L/O pro, but I am a mortgage underwriter and can tell you I see one major obstacle for you. The coop board. Coop boards must approve buyers, therefore just because you have a tenant buyer, and that tenant buyer may be able to qualify later down the line for a mortgage doesn’t mean they can buy later on. The coop board can turn him down, then what? The buyer and seller aren’t going to be happy, and I wouldn’t be suprised if one or both end up sueing you (whether they’d win or not is not the point). I’ve had borrowers with 800 credit scores, could buy the property with cash if they wanted to get turned down by the board and there is nothing they can do about it. The board can deny you and not even give you a reason, so I would think twice about dealing with Coops. I’m sure there are some here that will disagree with me, but thats been my experience. Best of luck!

Help with the Detials on A Cooperative Assignment - Posted by Ryan Brown

Posted by Ryan Brown on January 23, 2002 at 19:00:48:

I sent a post card out and a lady replied to it. I gathered her infomation and presented a L/O. She liked what what I had to offer so we met at her house and after answering a few questions we settled on these terms.

2 Year Lease Option (1 year at a time)
$1350 Rent (Her payment is $1680, So she makes up the Difference)
Purchase Price is the Mortgage Balance at time of sale.
She pays the first Months rent after I find a T/B
The whole deal is valid Subject To me finding a T/B

The home is 5 years old, 1860 Sq.Ft, 4 Bed, 2 Bath, 2 Car Garadge, Fire Place. In a very nice area, good location, and good schools. Nothing needs done, in great condition. The comps for the home range from $150,000-$157,000 for cash.

To make a long story short I was alittle off on my comps. I had some other experienced investors check the value also, so I am not off. I based a Sandwich Lease off of the High Comp Price. I don’t want to be in the middle because I don’t feel like the Back End and Monthly Spread is worth the risk. Plus if something goes wrong I don’t have that much stashed back to cover those cost. I have plans for that $5000 Option Consideration.

I put some signs up a week ago, and had a good amount of calls. I have a guy right now who want in the home. He has $5,000 down for Option Consideration, he can afford the $1350 a Month Rent. And I had a Mortgage Broker Talk with him and he said that he could get him qualified in a year or 2. All the Broker wants to see is his W-2’s.

So I sent the T/B a Rental Application today via Priority Mail. I asked him for:

#1. The Rental Application Completley filled out.
#2. The Copies of the last 2 years W-2’s.
#3. A Money order for $25 for his Credit Check.

I am waiting for him to return all the information. If everything works out then I have a Qualified T/B who is ready to move into this Vacant Home (The homeowners had a New Home Built, They just want out of the Monthly payments.)

I just plan on telling the seller that I was a little off on what I thought I could sell it for, and because of that I can’t stay in the middle and garentee the manintence and payments. BUT I Can Still solve your problem. I have a buyer who is willing to give you top dollar and also pay you $1350 a month in rent. I have already collected his information and ran credit checks, and hooked him up with a local mortgage broker. The broker is going to help him get qualified for a mortgage to cash you out of this Monster and get it behind you.

I will handle all the paper work. Then once it is signed up I will assing the contract back to you. I keep the Option Consideration That I collected for my fee, and I solved your problem of having double house payments, and got you a higher sales price.

Claude How do I do a Cooperative Assignment? I think I know how and just want to make sure. Here is how i think it sould be done:

#1. Qualify the T/B.
#2. Talk to the Seller and Tell her I can’t stay in the middle but I do have a Qualified T/B. If she agrees that she feels comfortable then I go to step #3.
#3. Sign up a Lease Agreement with the T/B.
#4. Sign up a Option Agreement with the T/B.
#5. Collect the Option Consideration, and firt months rent.
#6. Assign the Lease & The Option Back to the Seller for a Dollar.
#7. Get a Release of Liability from the Sellers.
#8. We Tear up our orginal Sandwich Lease/Option.

Thats it. I collected the option consideration and I out Free.

Please let me know how you handle it.

Ryan Brow

Mis-understood - Posted by CurtNY

Posted by CurtNY on January 24, 2002 at 16:01:17:

Sorry Ryan,
Mis understood your use of cooperative, you meant all parties cooperating, not COOP as in form of ownership. Sorry.