All Forum Posts by: Casey Carroll

If someone can please tell me how an assignment of a lease option violates Dodd Frank (since the end contract is between the seller and the buyer only), then I will gladly put my foot in my mouth. BTW @Bill Gulley, I'm assuming part of that post was directed at me. You can feel free to non-passive aggressively talk to me if you'd like (and no, this is not me yelling at you in a drunken and sloppy manner... I am calm).

Dodd Frank WILL come to play if you were to do an assignment of mortgage, land sales contract, deed installment, or mortgage wrap (because you actually hold the deed and therefore are the seller)... but there are a number of ways you can resolve this.... use a real estate attorney to structure your deals with your end buyer. They can assist with screening and ensuring you are compliant with the law.

Of course, you need to know Dodd Frank and what it does to our business... and always stay compliant. If you are creatively selling a deal you hold the title to, you need to hire an attorney. If you are merely assigning a deal, the law falls on the shoulders of the seller (but most sellers I've worked with aren't selling 2 or more homes with creative financing within a 12 month period, so Dodd Frank won't effect them either).

Wonderful! That's an awesome scenario.

BTW, some other exit strategies you can use for future deals, are to sell those sub2 homes with a lease option, or a mortgage wrap. If you can negotiate a longer term deal in the future than 3 years, either of those exit strategies are good for monthly cash flow, depreciation on taxes, and a big paycheck in 2-3 years. Great job!

I am fascinated by this. Please tell us more. How did you source the deal. Did you present the idea of sub2 before you met with them, or during the presentation. How did you present the offer? I'm about to start doing sub2 myself as a side to my main rent to own business.

Truth be told, I've actually never sold a wholesale deal to another investor... and I flip 4-7 homes a home in 9 different states.

99% of wholesalers work with other investors, like rehabbers or landlords. In those sorts of transactions, you need to negotiate a substantial discount to make a profit. With 99% of the homes I've sold, I've sold for full market value, no discount from asking price, and most of the times the homes I flip have little to no equity at all. And my assignment fees typically range from $3k up to $10k each (which are about on the same amount that "traditional" wholesalers would pull in even after negotiating a massive discount on the price).

@Jon Holdman, there is a whole world of real estate investors like myself, which are "wholetailers," which wholesale to retail buyers. Deals like these include wholesaling lease options (lease option assignments), sandwich lease options (which I hate), buying homes sub2 and subsequently selling those homes to retail buyers using: mortgage assignments, land sales contracts, deed installments/installment sales, and mortgage wraps.

Hence, you're wrong. Wholetailers like myself rarely work with cash buyers, but it's an incredibly lucrative niche which most investors seem to know nothing about, and/or aren't actively working.

Case in point: I wholesaled 4 lease options last months for homes I've never seen myself, to buyers I've never met, for lease option assignment fees... and I'm NOT a broker or realtor.

@Kimberly Martin, for a traditional wholesale to investor deal, that won't work. However, for a wholetail play, it works extremely well. How much do they owe on the unpaid principle balance? You can work a sub2 deal, and then assign that sub2 deal to a retail buyer (assignment of mortgage), or you can sub2 and sell the home on a land sales contract or mortgage wrap to a new buyer. If sub2 isn't a workable solution because there is a lot of equity, then you can sub2 the first mortgage and then ask if they can do a second mortgage in the amount of their equity. If none of those solutions work, then ask them if they'd be willing to sell the home with a lease option at 88k...heck, even $93k (this last method is exactly what I do in my business right now). If they are willing to sell the home at $88k with a lease option, then mark it up to $91k or $92k with a $3k or $4k assignment fee. All of these options I mentioned above are ways to profit on deals with no/little equity... and allow you to make money on deals that most investors and wholesalers would pass on.

Where you begin depends on your long term business strategy. Do you eventually want to do this full time, or just here and there? If full time, then you ought to determine where you can maximize your ROI. I did a few rehabs in the beginning and almost lost everything after 2 bad flips went sour. It can happen, and it's a risky move. Then I tried wholesaling, and failed at every type except for wholesaling lease options. If part time/dabbling, then go for the long term buy and hold play. In my opinion, read a book on the principles of persuasion (robert cialdini) and books on negotiations, and you may be able to come across a deal you can obtain with creative financing. Motivated sellers are everywhere, and sometimes spending $300 on bandit signs and a good idea on how you can convert those leads into money (sub2, mortgage assignments, wraps, lease options) can allow you to engineer a profit from any deal you come across. Spending money on learning about creative deal structuring and then dialing every single craigslist ad you can find which fits your criteria, is another way to start. The possibilities are endless, so start with which business model you intend on adopting, and then we can take it from there.

a) make sure you write your contract and/or assigns.

B) make sure your buyer isn't going to be using FHA financing, because you can't assign deals to FHA financed buyers (unless I'm wrong on this here). I whole tail every single deal I do... But I also only deal with lease options so I'm in a different type of deal that doesn't need a title company to close.

I make lots of offers on homes sight unseen, but it works well for my niche... Wholesaling lease options. Keep the idea of a lease option assignment in your back pocket as a back up plan if your primary plan fails.