endeavor11 0 Report post Posted January 8, 2010 I am a little confused on the different lease purchasing strategies mentioned in the manual and was hoping for some clarification from the resident gurus here. The manual lists Strategy 2 as "Assignment" and Strategy 3 as "Cooperative Assignment. My understanding with the 2 methods is that they're the same. You are basically assigning the contract to the end buyer (collect fee) and wiping your hands clean from the deal. Is my assumption on this correct? I have reread the manual several times over trying to differentiate the 2, but I just understand the 2 techniques as being the same thing. Also, what is the difference between lease option and lease purchase? I read somewhere that with the LP you are required to purchase and it is not an option to purchase? Thanks in advance! Share this post Link to post Share on other sites
MichaelC 160 Report post Posted January 8, 2010 endeavor, first, a lease purchase and a lease option are one and the same, at least in my opinion. I know there are some who will try and differentiate that a lease purchase obligates the lessee to eventually purchase the property. But, really, how do you force someone to buy your property if they change their mind or are financially unable to do so? That's why I say there is no difference between the two, and why I use the terms interchangeably.An assignment is simply selling your interest in your deal, any deal, to a third party for an agreed to assignment fee. That assignment fee goes into your pocket and has no bearing on the deal itself. In other words, that fee does not apply towards the purchase of the deal.A Cooperative Assignment differs in that the assignment fee does apply towards the purchase price.Does that help? Share this post Link to post Share on other sites
endeavor11 0 Report post Posted January 8, 2010 An assignment is simply selling your interest in your deal, any deal, to a third party for an agreed to assignment fee. That assignment fee goes into your pocket and has no bearing on the deal itself. In other words, that fee does not apply towards the purchase of the deal.A Cooperative Assignment differs in that the assignment fee does apply towards the purchase price.Does that help? Ok, I see now! Thanks for the clarification Michael! I noticed that most of the posters here do CA. Wouldn't it be in your best interest, from a legal standpoint to do an assignment instead? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted January 8, 2010 I don't see how legalities enter into the equation at all, endeavor. Assignments are legal and legit, be it a straight assignment or a CA. I think you'll find CA's much easier to come by because you are giviing the homeowner a good price while at the same time the assignee/tenant-buyer is receiving something for their assignment fee/option money. Share this post Link to post Share on other sites
endeavor11 0 Report post Posted January 13, 2010 I don't see how legalities enter into the equation at all, endeavor. Assignments are legal and legit, be it a straight assignment or a CA. I think you'll find CA's much easier to come by because you are giviing the homeowner a good price while at the same time the assignee/tenant-buyer is receiving something for their assignment fee/option money. Sorry, I wrote that wrong. What I meant is if an assignment was used, then equitable interests or other issues that may arise in the future would not pertain to the "assignor". However, if a CA was used, then there could be a possibility, correct? A couple more questions with the assignment strategy:1) Do you let the seller know that you will be "assigning" the property?2) How do you advertise the terms when looking for TBs? Do you just list your "agreed on" terms with the seller? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted January 14, 2010 What I meant is if an assignment was used, then equitable interests or other issues that may arise in the future would not pertain to the "assignor".This is correct. One for one. . . However, if a CA was used, then there could be a possibility, correct?No. A CA is still an assignment, is it not? Swing and a miss, one for two. . . .500 batting average. That's Hall of Fame material! 1) Do you let the seller know that you will be "assigning" the property?If you're doing a CA they know from the get-go. If a straight assignment, I don't hit them over the head with it. It is clearly spelled out in the paperwork, however. If it turns out I do assign the deal, then I'll tell them what is happening. 2) How do you advertise the terms when looking for TBs? Do you just list your "agreed on" terms with the seller?You're talking about a CA, I assume? If so, then yes. The terms you agreed to with the homeowner are the same terms you will be marketing the property for and that the t/b will ultimately agree to. Share this post Link to post Share on other sites
endeavor11 0 Report post Posted January 14, 2010 What I meant is if an assignment was used, then equitable interests or other issues that may arise in the future would not pertain to the "assignor".This is correct. One for one. . . However, if a CA was used, then there could be a possibility, correct?No. A CA is still an assignment, is it not? Swing and a miss, one for two. . . .500 batting average. That's Hall of Fame material! 1) Do you let the seller know that you will be "assigning" the property?If you're doing a CA they know from the get-go. If a straight assignment, I don't hit them over the head with it. It is clearly spelled out in the paperwork, however. If it turns out I do assign the deal, then I'll tell them what is happening. 2) How do you advertise the terms when looking for TBs? Do you just list your "agreed on" terms with the seller?You're talking about a CA, I assume? If so, then yes. The terms you agreed to with the homeowner are the same terms you will be marketing the property for and that the t/b will ultimately agree to. I don't know how to reply to your last quotes, LOL, so here goes...... Reply to your 2nd: But with a CA the option (down payment) applies to the purchase price, while with the straight assignment it doesn't. I'm confused now! Reply to last: Actually, I was referring to a straight assignment... Share this post Link to post Share on other sites
MichaelC 160 Report post Posted January 14, 2010 A CA or a straight assignment, as I said previously, it doesn't matter. They are assignments and you have no further financial or legal interest in the deal.As for advertising a straight assignment, yes, you would advertise the terms you have agreed to with the homeowner. Hopefully they are enticing enough to generate interest in the deal and get someone to pony up some cash so you can be done with the deal and move on. Share this post Link to post Share on other sites
