Quote from @Guy Gimenez:
Title insurance companies, not unlike any insurance company, want to reduce their liability and ensure their team's time is well spent on a potential transaction...they want to get it closed. The reason so many title insurers refrain from working with assignments is because so few assignors are educated about contracts, how to properly assign, what happens if an assignee is unable to close or what the assignor's liability is when the assignor is unable to locate an assignee. It's not that title companies don't understand assignments, it's that assignors don't understand assignments. Assignments occur every day with few issues but only when the assignor is knowledgeable and ethical. Failed transactions cause sellers to become upset with both the assignors and the title company. Most assignors could care less because they're not building a business. Title companies typically care very much about their reputation and understand how a quickly it can be damaged by a third party who is unaware of the assignment process.
Hey OP, another thing out there is you can do double closes depending on the state instead of an assignment. What guy is saying is absolutely right, most of the time it's a novice investor who doesn't understand how contracts work. There's tons of great advice in this thread to help somebody get started. I was an active burr strategy guy for 3 years and got up to 287 units before crossing over into the wholesale and territory. As other than said your word is your bond and you want to be able to close on the property if you can't pass it along and perform a Wholetale instead of a wholesale. This is where you actually close in the property and turn around and sell it very quickly. If you're looking in the bcs area and you have a heloc on your house you might be able to use that if your risk tolerance allows you to. At this time I'll pull a loc and close a property in cash if I'm in a pinch and then I'll refine back out or sell it if I need to. But my risk tolerance and portfolio size is large enough to handle hits, and flipping hundreds of crack houses gave my team and I the experience to know what to do when things go wrong. (Not if things go wrong but when things go wrong.)
Depending on what state you're in, I always recommend a double close over an assignment. People use the word assignment as if it means wholesaling. The two are very different, when you cross into the commercial space almost 100% of everything is assigned because most people will stand up a legal entity to to purchase the asset. When you do assignments generally your end buyer will see the spread. Some folks won't care, some folks might be upset that you made 30 grand because you hustled and found the good deal.
Another consideration is you can't get funding for most assignments prices, but there are lenders out there that work with double clothes wholesalers that will lend to a forever home buyer. An example would be we found a 180k 3/2 that we were able to wholesale to a forever home buyer for 220k. If we would have done an assignment contract(at least in this state) the forever home buyer would have seen that we made a 40k spread and would only have been able to qualify for a loan against the $180k. But we work with lenders that will lend on the second contract at $220k.
