Re: possible $100k profit, no simo allowed! - Posted by Todd_OH
Posted by Todd_OH on October 25, 2003 at 20:50:50:
If you ABSOLUTELY cannot do the deal without your “buyer” coming in to bring the money, then you can do the following:
Be aware that you may have to take a smaller profit than $100K. Basically look at it as some profit is better than none. If you can’t close the deal with your buyer, then you will make nothing.
As “js-indianapolis” (js) suggested, record a memorandum of agreement on the title. “js” also alluded to a “cancellation fee” which, in essence, gets to my point above that you may make a smaller profit than you intended but its better than nothing (i.e. I don’t think “js” expected you to collect a $100k cancellation fee
You SHOULD be able to pull off an assignment that doesn’t show on the HUD, as long as the title company will agree to it, irrespective of the lender.
The lender shouldn’t know anything about the assignment. Since its not a bank repo or HUD repo (is it?) the bank wouldn’t really have any say over assignments, since the bank is not in control of the purchase contract. In the case of bank/HUD repos, you are often using bank purchase contracts/addendums. Not the case in “normal” owner-occupant loans.
- To execute the assignment, simply figure out what you can get your buyer to accept as your profit without them backing out of the deal. Let’s say in a cloudy day scenario, that your buyer will go through with the deal if you “only” profit $20K. Let’s also assume (cloudy day case) that your buyer is strapped for cash, and can only come up with $10k immediately.
Have an assignement agreement that doesn’t show on the HUD, in which the Buyer pays you $10K in cashier’s check at closing, and a 2nd mortgage (make sure its recorded AFTER the bank loan mortgage) of $20k. This puts $10K in your pocket at closing (your $4K deposit should be refunded), and you will have a note/mortgage of $10K more to collect on later at a decent interest rate (at least 10%).
- The title company WILL need to see an assignment agreement, so you have one drawn up for them which DOES NOT show any dollar figures, or says something like “$10 and other valuable consideration” in exchange for the assignment rights. The phrase in quotes in very common in many areas of the country. If you check out some of the deeds in your area, you should see similar language.
Hope this helps…
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