Unfortunately, most of the time you cannot use assignments on foreclosures.
I just had the same problem on a foreclosure that I put under contract. The buyer wanted me to assign the contract to him because he did not want another name on the chain of title. I nearly lost the deal, but he decided to go ahead and buy the property from me even though I could not assign it to him and let him close on my contract.
I have done a few assignments on foreclosures, so it is not totally out of the question - but very unlikely. You just have to ask. Every now and again you will get a bank rep who doesn't care, but Very Rarely! I would go at it thinking 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.
Another way to go is to find an attorney that will do a double closing, or to have a hard money lender available to fund the deal for the flip. I do this all the time - I have a lot of guys who will lend me hard money. Sometimes it costs me a grand just to borrow the money for an hour, but if I can pay 1k to make 5-10k or higher I will do that all day long.
When you are sure the house will sell fast, do what I do and put your earnest money down. Get thirty days to close (I have never had a problem with that except in rare cases where they offered me a super deal if I would close sooner) and start marketing it. The bottom line is if you think you have buyers for the property, don't let anything stop you from making an offer.
I just had the same problem on a foreclosure that I put under contract. The buyer wanted me to assign the contract to him because he did not want another name on the chain of title. I nearly lost the deal, but he decided to go ahead and buy the property from me even though I could not assign it to him and let him close on my contract.
I have done a few assignments on foreclosures, so it is not totally out of the question - but very unlikely. You just have to ask. Every now and again you will get a bank rep who doesn't care, but Very Rarely! I would go at it thinking 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.
Another way to go is to find an attorney that will do a double closing, or to have a hard money lender available to fund the deal for the flip. I do this all the time - I have a lot of guys who will lend me hard money. Sometimes it costs me a grand just to borrow the money for an hour, but if I can pay 1k to make 5-10k or higher I will do that all day long.
When you are sure the house will sell fast, do what I do and put your earnest money down. Get thirty days to close (I have never had a problem with that except in rare cases where they offered me a super deal if I would close sooner) and start marketing it. The bottom line is if you think you have buyers for the property, don't let anything stop you from making an offer.
About the Author:
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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