herbdalyjr 0 Report post Posted April 11, 2009 I wanted to know if you have a straight option to buy on a property and want to flip it to anotherbuyer for a fee, how is the purchase and sale between what parties handled? Do I just assign it for a fee and let the end buyer close with seller, or do I sign a p&s with the seller or end buyer?Who signs the P&S agreement between seller, me, and end buyer? Share this post Link to post Share on other sites
Jason (AL) 1 Report post Posted April 12, 2009 Hey herb, Here are a couple of great threads concerning the matter.Hope this helps. Thread 1 Thread 2 Share this post Link to post Share on other sites
MichaelC 160 Report post Posted April 12, 2009 Hi, Herb, and welcome to The Naked Investor. Good to hear from you again. Hope all is well up by you.If you are assigning a Pure Option, you collect your assignment fee and are done with the deal. You have no further involvement and have nothing to concern yourself with in regards to Purchase and Sale agreements. Share this post Link to post Share on other sites
herbdalyjr 0 Report post Posted April 12, 2009 Hi, Herb, and welcome to The Naked Investor. Good to hear from you again. Hope all is well up by you.If you are assigning a Pure Option, you collect your assignment fee and are done with the deal. You have no further involvement and have nothing to concern yourself with in regards to Purchase and Sale agreements. Michael, So am I to assume once I have assigned the option to my flip buyer,via an assignment contract for a fee, he will thengo to the seller and do a purchase and sale agreement, for the agreed upon price? I originally thought if I found a buyer I would exercise my option, then go to the seller write up a purchase and sale agreement and then assign that to the flip buyer? Share this post Link to post Share on other sites
Jonathan RexfordFL 8 Report post Posted April 12, 2009 Herb, If you are working with a cash buyer then a simple assignment. If you are working with a buyer that needs financing then there may be a few more steps to be involved. Here is how I do RETAIL FLIPS as they have been called: Option a propertyRecord a Memorandum of OptionFind BuyerBuyer and YOU SIGN (Purchase and Sale agreement)YOU exercise your OPTION to BUYYOU CLOSE WITH SELLERYOU CLOSE WITH BUYER It would be a Double FUNDED Close. In the past I would have done them different. There are a few more or less ways to do them. It is based on how the end buyer is taking title and the financing the buyer has. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted April 12, 2009 So am I to assume once I have assigned the option to my flip buyer,via an assignment contract for a fee, he will then go to the seller and do a purchase and sale agreement, for the agreed upon price?That's the idea, Herb. But keep in mind it is an option, and the assignee is no more obligated to buy as are you. Though it would seem likely someone would buy if they have paid you money to have that right. I originally thought if I found a buyer I would exercise my option, then go to the seller write up a purchase and sale agreement and then assign that to the flip buyer?That can be done. But I find it easier to collect an assignment fee and move on. However, I think the determining factor is the amount of equity you have in the deal between your option price with the homeowner and the FMV of the property.For example, a $20K spread in a deal might be work three or five grand to someone. Is that amount worth the trouble of a double closing? I'd say no. But a $60K spread might be, and so if you find a retail buyer, a double close becomes something worth considering. Share this post Link to post Share on other sites