IL state specific questions

[Robert D.]

I am licensed real estate broker in IL. Many times I come across owners who would like to sell quickly for cash. I do buy for rehabs but once the capital is tied up in my flip, I could use wholesaling. I do also know some local real estate investors who might be interested. While I usually try to list such properties to attract maximum traffic and price …I think contract with assignment would not be a bad idea. I have created an LLC for that purpose. So it will be a contract between seller and XYZ LLC (my LLC). Yes at first contact I do disclose I am broker, I hand the owner a no-agency disclosure and also explain in writing that it is in their best interest to contact appraiser, real estate attorney, or independent real estate agent if they feel this way their interest will be protected. I also put at the end of the contract that XYZ LLC is broker owned.

So once we are past disclosure part …it comes to signing a contract. I am looking at mutliboard 5.0 and nowhere do I see anything about assigning. I do not want to put in buyer line XYZ LLC assigning to…. As this might trigger red flags with owners. Shall I just write in line 308 (other provisions): “ this contract might be subject to assignment” and I need to provide additional assignment agreement (can be downloaded from Resources) once I find the buyer ? will that be enough ?

Contingency part :
Is it better to put cash and cross out all mortgage contingencies or put mortgage 95% LTV etc and give myself 30 days "to obtain a mortgage aka finding a cash buyer"
If I put cash they might ask about proof of funds ..and I also limit the time to find a buyer ..as attorney review period is only 5 days in IL. I could cross out that 5 days and put e.g. 20 days …within that his time If I don't find a buyer I could cancel and get my EM back from owner's attorney escrow account

Showings:
The way I see it happen …once I market the property off MLS (craigslist, zillow, trulia) maybe not property itself but the inside of the property and the general idea of location (I do not want to disclose the address of the property even though I have a contract on it) I would ask investors for proof of funds and organize showing for all of them at the same time. to the owner I would explain those are my contractors coming to look at the property to give me estimate of remodelling costs.


Owner:
Nothing prevents an owner from signing another contract and going with the “real” cash buyer. Yes I have a contract …yes I could sue for non performance, I could probably notify a title company about it …not sure I would win unless I am prepared to spend a lot for an attorney and engage in complicated litigation. Anybody experienced that ?

Lastly do you know of any local Chicago land area title company who is familiar how double closing works. I don’t want to end up with a team for who 2closing is news
Thanks for all your input

[Wendell De Guzman]

You ask a lot of good questions so let me provide some answers:

"I am looking at mutliboard 5.0 and nowhere do I see anything about assigning...."

A contract is assignable when it does NOT say it's NOT assignable. So you can use the multiboard 5.0 contract.

"Is it better to put cash and cross out all mortgage contingencies or put mortgage 95% LTV etc and give myself 30 days “to obtain a mortgage aka finding a cash buyer”

Cash - for proof of funds partner with one who has the POF. My only contingency is inspection. For a stronger offer, put NO CONTINGENCIES (but this is for really experienced investors only).

"Nothing prevents an owner from signing another contract and going with the “real” cash buyer."

Yes there is. Should I reveal it here? OK...here it is: you can record what is known as Memorandum of Option. That will cloud the title in case the seller tries to go around you. This happened to me and the seller came to me and beg me to sign a release because without it, he can't sell the house to someone else. So, it works.

"Lastly do you know of any local Chicago land area title company who is familiar how double closing works"

Chicago Title (I've used them in several wholesale transactions)