Do you assign back to the Seller or to the Buyer?

[Chris43 0]

As most of you know by now from my two previous posts that I am new and am still learning about L/O and CA's. With that being said, I have a couple more questions:

 

Assigning back to seller vs. buyer..... is there a benefit to one over the other? What are the steps with each and what forms do you use?

 

Secondly, is it feasible to control the sellers property with a straight option for the period of time you are marketing for a TB or do you need to sign a lease and option agreement with the seller if you are assigning a lease with option to your TB? My idea is to purchase on straight option and assign to TB with new lease and option agreement with price and terms that seller has agreed upon or assign back to seller.

 

Is this how you do it or am I over thinking this?

 

 

Thanks in advance,

 

 

Chris

[MichaelC 160]

Assigning back to seller vs. buyer..... is there a benefit to one over the other? What are the steps with each and what forms do you use?

Chris, when I was learning this biz I was taught to assign my deals to the t/b. It's a heck of a lot easier in my experience and so I still do that today. I'm sure there are some who prefer to assign the deal back to the seller and, in some cases it may be necessary. But for the most part, if you are doing a typical Cooperative Assignment, assigning to the t/b is the way to go, in my opinion.

 

Secondly, is it feasible to control the sellers property with a straight option for the period of time you are marketing for a TB or do you need to sign a lease and option agreement with the seller if you are assigning a lease with option to your TB? My idea is to purchase on straight option and assign to TB with new lease and option agreement with price and terms that seller has agreed upon or assign back to seller.

If you are doing a lease with option with a t/b, then you need to have that same type of agreement with the homeowner. If you are looking to have an option to purchase without a lease involved, then a straight option will suffice. From your post it sounds as if you are combining two types of lease purchase deals, making things more confusing for yourself and probably for anyone else involved in the deal.

[Chris43 0]

Assigning back to seller vs. buyer..... is there a benefit to one over the other? What are the steps with each and what forms do you use?

Chris, when I was learning this biz I was taught to assign my deals to the t/b. It's a heck of a lot easier in my experience and so I still do that today. I'm sure there are some who prefer to assign the deal back to the seller and, in some cases it may be necessary. But for the most part, if you are doing a typical Cooperative Assignment, assigning to the t/b is the way to go, in my opinion.

 

Secondly, is it feasible to control the sellers property with a straight option for the period of time you are marketing for a TB or do you need to sign a lease and option agreement with the seller if you are assigning a lease with option to your TB? My idea is to purchase on straight option and assign to TB with new lease and option agreement with price and terms that seller has agreed upon or assign back to seller.

If you are doing a lease with option with a t/b, then you need to have that same type of agreement with the homeowner. If you are looking to have an option to purchase without a lease involved, then a straight option will suffice. From your post it sounds as if you are combining two types of lease purchase deals, making things more confusing for yourself and probably for anyone else involved in the deal.

 

 

Thanks Michael, as always your input is appreciated!

[Chris43 0]

Michael,

 

I guess I do have another question...

 

If you sign a lease w/ option with the seller and then aren't able to assign or find a new tenant buyer are you on the hook for the agreement and terms you signed with the seller? How do you avoid this? I must be missing the basics here.

 

Chris

[MichaelC 160]

Michael,

 

I guess I do have another question...

 

If you sign a lease w/ option with the seller and then aren't able to assign or find a new tenant buyer are you on the hook for the agreement and terms you signed with the seller? How do you avoid this? I must be missing the basics here.

 

Chris

I'm assuming we are talking about a CA, no? If so, if you are using my agreements, on Page 2, Paragraph 8, of the CA Residential Lease Agreement, there is a cancellation clause that allows you to cancel at any time without penalty.

[Adam 0]

In the system that Joe McCall teaches he assigns his paperwork back to the Seller. Not sure if it’s necessarily a better way, just a different way to skin a cat.

 

Joe has the Seller sign an ‘Option to Lease Option Agreement’ which is a simple one page form controlling the property. After the Seller signs the ‘Option to Lease Option Agreement’ he goes out and finds a ready, willing and able Tenant/Buyer and signs a ‘Lease Agreement’ and an 'Option Agreement’ with that Tenant/Buyer. Lastly, he assigns the ‘Lease Agreement’ and ‘Option Agreement’ back to the Seller.

 

What I like about Joe’s method is that it feels a little more simple, plus you’re not sending the lease agreement and the option agreement paperwork to the Seller up front. Seems that if you do this it might increase the chances of the Seller using your paperwork behind your back.

 

I guess the bottom line here is which method will get you more deals? It seems that the more simple the paperwork is up front the more likely the Seller might be to sign your paperwork and work with you, but I haven't done enough deals to actually test this.

 

Anyone else tested this? Please speak up!

 

~Adam

[MichaelC 160]

Nothing is more straightforward or simpler than assigning the deal to the buyer. Assigning the deal back to the seller is unnecessarily adding steps and paperwork to the deal.

Here is the Naked Investor way of doing a CA:

1) Sign a lease and option to purchase agreement with the homeowner

2) Find a tenant buyer and everyone signs the Assignment agreement

3) Profit, repeat.

What could be easier?

[pilot76180 51]

I never worry about the seller using my paperwork. That's why they called me, for my good looks and expertise....and charm...and charisma...and ....well...

I haven't seen Joe's docs, so I can't comment on that flow of docs, but MC is right that the NI way is the easy way...., it is very straightforward to send the docs to the seller, review the terms, make the tweaks if needed, then market the contract with the terms already spelled out. Then you are assigning your contract to the assignee, which is the TB.

[EQUITY NOTES 0]

I to have looked at assigning back to seller with a c/a as some lender issues

 

Can you describe what steps to take on the c/a to assign back to seller?

 

Thanks

Tom

[Adam 0]

MC is right, it does add a step to the c/a process. Here is how Joe does it...

 

1) Sign an option to lease option with the homeowner

2) Find a tenant buyer and have them sign a lease and option to purchase agreement

3) Assign paperwork back to homeowner

4) Profit, repeat.

 

I too like MC's number 3)...

 

It does seem however that homeowners might be more likely to sign an agreement with me if it is simple (one page), but I haven't tested it. Seems that Mr. Charm... Mr. Charisma... hasn't had any issues getting homeowners on board. Must be those good looks!

 

I plan to use Joe's methodology (for the most part) on my deals and I'll let you know how it goes. If I come crawling back you can certainly tell me that you told me so....

 

~Adam

[Jonathan RexfordFL 8]

Hey Mr. Seller....I want you to take an OPTION to LEASE OPTION your home. It is NON BINDING and if you rent it or sell it before I do, we will cancel our agreement.....to me it looks more like a listing contract.

 

The safest way to do these as a non realtor in my opinion is what MC and John have been stating.

 

I take them as a realtor on some occasions, but I also do a lease and option agreement and move it the way I see fit.

[kcan 0]

Nothing is more straightforward or simpler than assigning the deal to the buyer. Assigning the deal back to the seller is unnecessarily adding steps and paperwork to the deal.

Here is the Naked Investor way of doing a CA:

1) Sign a lease and option to purchase agreement with the homeowner

2) Find a tenant buyer and everyone signs the Assignment agreement

3) Profit, repeat.

What could be easier?

In doing a CA, what about option consideration to the homeowner before you assign the deal to a t/b? I think Joe Mccall gives the homeowner $1 (at least that's what it says in his lease option agreement with the homeowner) Don't you need to give some kind of consideration to lock the deal up with the homeowner?

[MichaelC 160]

KC, every state that I am aware of requires the payment of some form of option consideration to make said option legally binding. So, yes, you can give the homeowner a buck or five to secure the deal.

[fanelli19 0]

MC is right, it does add a step to the c/a process. Here is how Joe does it...

 

1) Sign an option to lease option with the homeowner

2) Find a tenant buyer and have them sign a lease and option to purchase agreement

3) Assign paperwork back to homeowner

4) Profit, repeat.

 

I too like MC's number 3)...

 

It does seem however that homeowners might be more likely to sign an agreement with me if it is simple (one page), but I haven't tested it. Seems that Mr. Charm... Mr. Charisma... hasn't had any issues getting homeowners on board. Must be those good looks!

 

I plan to use Joe's methodology (for the most part) on my deals and I'll let you know how it goes. If I come crawling back you can certainly tell me that you told me so....

 

~Adam

I am sorry to dig up an old thread here but I have some questions regarding steps 1, 2, and 3 above on the CA method described above:

 

Step 1.) do you spell out the exact terms and price in the option to purchase?

 

Step 2.) do you sign up the lease and the option to purchase agreement with the buyer/lessee with YOUR NAME as the seller/lessor? (if so, I do not understand what permits you to enter into an agreement as a seller/lessor for a property that you do not even own. Is the option to purchase in Step 1 some special agreement that allows this or is it just your standard option to purchase agreement?)

 

Step 3.) so the seller is the assignee, but you still collect the option consideration from the buyer? (I've never heard of an assignment fee being paid to the assignor by someone else other than the assignee?).

[MichaelC 160]

I can't answer how someone else's paperwork should be used. Suffice it to say that by taking a simple, straightforward, and legal approach to doing these types of deals, and making it more difficult and unnecessarily complicated, you can tell people how smart you are and charge 5 times as much money to share that wisdom.