Unfortunately, most of the time you cannot use assignments on foreclosures.
I recently had this problem on a foreclosure. I put the property under contract and the buyer wanted me to assign the contract to him. Because I could not do it I nearly lost the deal, but the buyer decided to go ahead and buy the property from me anyway.
I actually have done a few assignments on foreclosures, so it is not completely impossible - but very unlikely. Just ask, and every now and then you will deal with a bank rep who doesn't care, but Extremely Rarely! I would go ahead thinking that you will not be able to assign the contract.
One way to get around the assignment problem when buying REO's is to put REO's under contract in an LLC then sell the LLC to an end buyer. It takes a little up front work but I think this is an excellent strategy.
One more way to go if you cannot assign the contract to find an attorney that will do a double closing. Or you can find a hard money lender so that you would be able to fund the deal for the flip. I do this all the time: there are a lot of guys who will lend me hard money - even though I hate paying the price. Sometimes it is a grand just to borrow for an hour; but if I can pay 1k to make 5-10k or higher I will do that all day long.
If you are sure the house will sell, and sell fast, then do what I do and put your earnest money down. Get 30 days to close (unless they offer you a super deal if you would close faster) and start marketing it, try to sell it immediately. If you think you have buyers for the property, don't let anything stop you from making an offer.
I recently had this problem on a foreclosure. I put the property under contract and the buyer wanted me to assign the contract to him. Because I could not do it I nearly lost the deal, but the buyer decided to go ahead and buy the property from me anyway.
I actually have done a few assignments on foreclosures, so it is not completely impossible - but very unlikely. Just ask, and every now and then you will deal with a bank rep who doesn't care, but Extremely Rarely! I would go ahead thinking that you will not be able to assign the contract.
One way to get around the assignment problem when buying REO's is to put REO's under contract in an LLC then sell the LLC to an end buyer. It takes a little up front work but I think this is an excellent strategy.
One more way to go if you cannot assign the contract to find an attorney that will do a double closing. Or you can find a hard money lender so that you would be able to fund the deal for the flip. I do this all the time: there are a lot of guys who will lend me hard money - even though I hate paying the price. Sometimes it is a grand just to borrow for an hour; but if I can pay 1k to make 5-10k or higher I will do that all day long.
If you are sure the house will sell, and sell fast, then do what I do and put your earnest money down. Get 30 days to close (unless they offer you a super deal if you would close faster) and start marketing it, try to sell it immediately. If you think you have buyers for the property, don't let anything stop you from making an offer.
About the Author:
About the author: Jesse Davis is an expert wholesaler in the Jackson Mississippi Real estate Market. Go here for tips on how to wholesale Real Estate and to get a free audio on Wholesaling Real estate
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