Hi @Elan Adler!
I'm going to preface with this: IMPORTANT!!!! Take the time NOW to find an investor friendly title company that is willing to close assignment deals (some title companies won't). You can check with some of the local REIA groups for good title companies and closers. Make sure to let them know ahead of time you're going to be wholesaling and assigning your equitable interest in the deals you bring them. Also ask if there is a cap on assignment fees. Some title companies will close assignments, but have a limit on the fees they will pay out. Also I don't know of a single title company that can close a transaction the same day if you're getting a title policy. It's just not enough time. The fastest I've seen is a week to close and that was years ago. You're going to need probably 3-4 weeks realistically.
I'm in Texas, but this is generally how it should go:
1.You sign a contract with the seller to buy their house. Make sure you put your entity name and/or assigns as the buyer on the contract.
2.Go ahead at that point and receipt that contract with the title company immediately. You want to get this process started right away because many times there will be title issues that will need to be cleared up that could take time. Ordering payoffs and HOA docs also require time to process. Sellers aren't always aware of liens or back taxes owed. They don't always know their loan balance. You want to get ahead of any problems and be proactive in getting those issues cleared up prior to closing. You don't want any surprises at the closing table that could cause your seller or end buyer to walk at the last minute.
3. Market the property within 24 hours of getting it under contract. We put a two week funding approval clause in our contracts that allows some time to market the deal, as well as give us time to renegotiate if there's a lien or title problem that was not disclosed to us from the seller. *Note: we believe in being transparent when we are planning to assign a contract and always make sure the seller understands what we are doing, but not all investors do this. Decide which type of person you want to be :)
4. Once you have an end buyer, you'll do an "assignment of contract" contract which goes to the title company as well. It shows the original seller and the new end buyer with the sales price your end buyer is paying. The buyer will wire earnest money to the title company (whatever was negotiated on the contract). Prior to closing the buyer will wire the purchase funds to the title company to be held in escrow. You are collecting the difference between the original contract sales price and the end buyer's contract sales price as your assignment fee, but ONLY after the deal is closed.
5. I would highly recommend keeping up with all steps of the transaction as it moves forward so you know if there are any delays or problems. I would suggest not just dumping it all on the title company and expecting them to handle everything with no communication from you. They get buried with files and if you're not staying on top of things it can cause delays. Plus you want to maintain a good relationship with the seller and end buyer in case things fall apart on either end. The title company will let you know when title is clear and you're ready to close.
6. Once closing is complete, the title company will disperse the funds and you will receive your assignment fee. It should appear as a line item on the HUD. Then you can decide if you want it in check form or have it wired to your account.
I hope this was helpful!
