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megabucks41

First Real Deal

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ok property being sold as is for $135,083 this is what our buyer is going to pay.And buyer has already agreed to. There is a seller he wants $10,000 and he is going to walk away. There is a first mortgage of $116,ooo. The buyer is buying out right with a new mortgage, so when we close there will be our $9,000 payday. We are closing asap. My problem is I don't have a contract on how to write this and I don't know how to structure it into a contract. So that everybody know what is happening.

 

This deal came about while my son and his friend were making calls to fsbo, I don't have the time and they needed a job so I put together a script and here we are now. I have those contract from MC. and know how to fill them in but this here is something different. I will keep the borad posted as to the results. :angry: Well thanks for the help

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ok property being sold as is for $135,083 this is what our buyer is going to pay.And buyer has already agreed to. There is a seller he wants $10,000 and he is going to walk away. There is a first mortgage of $116,ooo. The buyer is buying out right with a new mortgage, so when we close there will be our $9,000 payday. We are closing asap. My problem is I don't have a contract on how to write this and I don't know how to structure it into a contract. So that everybody know what is happening.

 

This deal came about while my son and his friend were making calls to fsbo, I don't have the time and they needed a job so I put together a script and here we are now. I have those contract from MC. and know how to fill them in but this here is something different. I will keep the borad posted as to the results. :angry:  Well thanks for the help

 

I am not an expert but i think the simplest way is:

 

1. Have the Seller sign an assignable purchase agreement with you for mortgage amount plus $10,000.

 

2. Assign the agreement to the buyer for $9000.

 

Walk away with 9,000 and let them close on the house for $126,000.00 (assuming it is worth at least that)

 

Since I don't have my own deal, I thought I would add my 2 cents.

 

Feedback on this structure is appreciated.

Thanks

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First, congrats, second, set up a Pure Option Agreement for the purchase price that the seller agrees to and assign that option to the buyer with the Assignment Agreement.

This deal came about while my son and his friend were making calls to fsbo, I don't have the time and they needed a job so I put together a script and here we are now.

What do you pay your callers and how effective does it seem to be?

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First, congrats, second, set up a Pure Option Agreement for the purchase price that the seller agrees to and assign that option to the buyer with the Assignment Agreement.
This deal came about while my son and his friend were making calls to fsbo, I don't have the time and they needed a job so I put together a script and here we are now.

What do you pay your callers and how effective does it seem to be?

I pay my callers nothing they in partner ship with me we split what ever we make three ways. this is our first deal, so we're wating to get paid once the deals is done.

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Ernie, there are a few ways to work the deal to assure your payday.

First, as Ben mentioned, you can have an assignable agreement between you and the homeowner. Find yourself a buyer and collect an assignment fee.

Or, as JC said, you can sign a Pure Option between yourself and the seller for the best possible price you can negotiate. Then, again, find your buyer and sell it for the best price you can. The difference is your profit in the deal. We just had a discussion on this very topic here, and here. Done the way Rexford describes in those threads, it's an easy way to profit without going on the title and without having to be involved in the closing process.

Another way is to have the seller place the property into a Land Trust with both of you as beneficiaries and you as Trustee. You then sell the house to your buyer and distribute the proceeds as you have agreed. It's a bit more involved and will require the services of an attorney, at least the first time or two you do this.

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Another way is to have the seller place the property into a Land Trust with both of you as beneficiaries and you as Trustee.  You then sell the house to your buyer and distribute the proceeds as you have agreed.  It's a bit more involved and will require the services of an attorney, at least the first time or two you do this.

 

I didn't know you knew about Land Trusts! I'm very interested in learning more about this method of protection.

 

Spill the beans, Michael! :P

 

At the very least, you can point me in a direction, can't you?

 

Thanks in advance!

 

BTW, on a separate note, Oh, I see the folly of my ways.

 

A pure option would prevent you from overextending yourself, is that right?

As opposed to a assignable purchase agreement...

Well with the proper clause, I suppose it amounts to the same, but why make things difficult.

 

Some feedback on this thought would be much appreciated.

Good luck to you Ernie!

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I didn't know you knew about Land Trusts! I'm very interested in learning more about this method of protection.

 

Spill the beans, Michael!  :P

I may have some understanding about 'em. But by no means am I the last word on the subject. There are any number of reliable resources who have forgotten more about land trusts than I ever knew. I think Bronchick has a course on this, as do some others, Ben. Do a Google search. And check with some local folks, too. A knowledgeable attorney is well worth his fee to walk you through the process the first time or two. Thereafter, you could probably do it on your own. And some wise members of your local REIG can probably assist you, too.
A pure option would prevent you from overextending yourself, is that right?

As opposed to a assignable purchase agreement...

Well with the proper clause, I suppose it amounts to the same, but why make things difficult.

Not sure what you mean here, Ben. A Pure Option is risk free in that you are not obligated to purchase the property. If you decide not to, the option simply expires and you are done with it.

A Purchase Agreement, on the other hand, even if is assignable, is still a legally binding contract that requires you to follow through and adhere to the terms of that Agreement, (although you may be able to execute a weasel clause or two in there).

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Not sure what you mean here, Ben.  A Pure Option is risk free in that you are not obligated to purchase the property.  If you decide not to, the option simply expires and you are done with it.

A Purchase Agreement, on the other hand, even if is assignable, is still a legally binding contract that requires you to follow through and adhere to the terms of that Agreement, (although you may be able to execute a weasel clause or two in there).

Yes, you said exactly what I was thinking. The obligation part. Thanks Michael.

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