BiggerPockets

I just put my first property under contract this afternoon. They were asking 200k, and I offered 155k over a month ago. They did not accept on the spot. They called me today and wanted to sign the contract.

I have sent it out to the small list of investors I have, and am looking to do some other marketing.

I am not sure whether to do a double closing, or just have an assignment contract. I think I may be able to pull 20k out as an assignment fee. I really dont want a double closing to eat up 7k or so.

Im also wondering what kind of signage I should put on the property. Just a bandit sign size or a vinyl banner type sign. I was also thinking about putting an information box out..... not sure. This property is in a high dollar area with lots of rehabs.

Hopefully, it will all work out.

First off... congrats on getting your first property under contract. Now is the time to put in the real work to get paid!

One side note before I give you some suggestions... anytime I put an offer it and am called back on it later, I put on the " Reluctant Buyer" hat. I tell them how interested I was when I first put in the offer, but since then my circumstances have changed and I am only able to offer $XXX for it. By the time they call you, they are typically more motivated, and you can often get the price down lower just by being the reluctant buyer.

As for marketing, start getting on the phones. Ask everyone you know if they know anyone who does rehabs. Go to any real estate related event and hand out flyers. If you know any real estate agents, see if they know any rehabbers in the area and call them. Put an ad in the paper for handyman special and also on Craigslist. Call bandit signs that you see on the side of the road. Basically you want to get in touch with as many potential buyers as you can. Make sure to keep a list, even of those who may not be interested in this deal. You may be able to offer them a future deal.

Good luck. Let us know how it goes.

I just assigned the contract this morning! Only 2 days.

Anyway my end buyer wanted me to write in a clause that said contract was contingent upon financing so that she had an exit, so I also wrote in that if buyer fails to perform my only remedy is to retain the earnest money deposit so that if she did back out due to financing I could. I probably should have worded it so that it says If buyer fails to perform for any reason... but..

Is writing in clauses in the assignment contract typical? Or am I just possibly screwing myself?

The original contract has " contingent upon obtaining suitable financing" and I guess the end buyer could back out using that w/0 me writing it in the assignment contract.

Im just worried that legally that contingency would over ride my contingency that says " assignor's exclusive remedy is retaining earnest money deposit if buyer does not perform"

would the end buyer backing out due to not obtaining suitable financing be considered " not performing" ?

thanks as always for the input guys!

Kevin,

How do you do an assignment if you're making $20K on the assignment? Wouldn't your buyer get upset that you're making so much money? Also, how do you ask for your assignment fee? I can't imagine someone is going to pay you $20K in cash if you're not doing a double close. Please advise!

Michael is right. As long as the price to the end buyer is good, it shouldnt matter what the assignment fee will be.

And you would use an assignment of contract for the $20,000. Which you would then send that to the title company and let them handle it from there. Once you have that signed you have 'signed' away your rights to the contract and the deal, its now in the hands of the seller, end buyer and the title company. And you get your $20,000 after closing.