Posted by Jack/TCG on March 02, 2001 at 15:26:06:
My .ORG address isn’t working. I guess Tucows is offline or something’s wrong.
But anyhow. On the Assignment deals, you’ll find that many investors do it a little differently.
Besides the info I e-mailed you, I thought I’d share some here for the other newcomers, since I don’t see anyone wanting to broach the subject.
Your Purchase Contract with your Seller, it should be for the price you’re willing to pay for the property. Not marked up for what you will charge your Assignee.
The way I handle the Assignment, is to use the Assignment Of Contract I sent you, tailored to my needs. On the face of the Assignment Of Contract, I put the amount of the deposit that was paid to me by my Buyer. But, on the Addendum that’s attatched to the Assignment Of Contract, I spell out all terms of our agreement. They include the name of the Escrow Agent that will handle the transaction. Also, the amount that’s to be paid to me (minus the deposit) at closing.
I also include that the deposit will be applied to the over-all price that the Assignee is paying me. And,that in case of forfeiture, the Assignee loses that deposit.
So, Diane (and others interested in doing Flips), YOU’RE the one that files the Assignment Of Contract with the Escrow agent. Don’t permit your Assignee that option. You need to close withy the Assignee at the same place you and your Seller close.
One other thing I do, that other investors might not do, is to have the Assignee sign a Promissory Note for the amount of the assignment (minus the deposit), and I reference that document to the Assignment Of Contract. It’s double protection for performance on the Assignee’s part. And, these documents are all attached to the Assignment Of Contract. It makes them (by being referenced to each other) a binding part of the over-all deal.
In your Addendum that’s to be attached to the Assignment Of Contract, leave no stone unturned. Is the Assignee to pay funds in CASH, or is the Assignment to be Financed by a lender? These, and other things need to be spelled out.
Good luck on your deal! —Jack