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Updated over 16 years ago on . Most recent reply
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Assignable Contract?
I have a buyer who is willing to pay $400,000 for a property that I can purchase for $300,000. Before I execute the contract I want to make sur eI am doing this correctly as I know "flips" are pretty much impossible to finance and the buyer will be financing. What is the best way to make this transaction complete and still ensure the buyer can obtain a loan while I make the difference between the 2 prices?
Thanks,
Jeremey
Most Popular Reply
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You can do a double-close, but you can also drop a lien on the property, equivalent to your assignment fee. What you do is have the buyer put the property under contract directly with the seller for $400k. Then, you attach a lien invoice to the contract for $100k. Give both contracts to the title company and wait for your enormous check to arrive in your mailbox.
I've done this more than a few times, without even registering the lien officially. If the title company is easy to work with, they'll take the invoice and your word for it. A lien invoice can be created in Excel in 5 minutes. Remember, it's attached to the property, so the seller's name is on the lien, not the buyers, eventhough you are essentially receiving the cash from the buyer. The title company will work all that out.