Deal with Assignment Clause

[Naaman Newbold]

We're looking at a deal with an assignment clause and it's the first time we've dealt with this clause. Overall the deal looks good, but our broker won't do a deal with an assignment clause because it raises "red flags". After talking through it with our broker, the red flags are really a measure left over from the 2008 bubble that prevent flippers from speculating on properties. The way I understand it, the wholesaler is arbitraging the market by getting into contract at a below market price, selling it for market value, use the mortgage company to cover the cost of acquisition and close simultaneously with us. According to our analysis, the price we're paying is still about 10% below market value. So, we can start looking for a bank that can get the deal financed, but it's unclear to me if there's some hidden concern over an assignment clause that we should model. I really appreciate your help. Thanks, Naaman