contracts

4 Replies

Hey BP,

I hear alot of investors talk about putting a property under contract.

Ex. Lets say i have found a investment property that would be perfect fr my cash buyer how would I get the property under contract?

Would i have to use any money?

what would the contract entail?

Write up a contract and have the buyer be your name "and/or assigns". Have all the basic stuff in the contract like a inspection contingency and a financing one. You will have to give an earnest money check. Then assign the contract to your buyer that you have in mind and normally collect a finders fee.

@DiskinYoung

thanks for the response.

What exactly do you mean earnest money check?

and what is the average finders fee?

hi @Gary Threadgill , sounds like you might want to brush up on the basics. Did you review the ultimate beginners guide on this site? You will want to use a standard contract (ie purchase and sale agreement) that is legal in your state. Earnest money is completely negotiable between you and the seller. We've put as little as $25 as deposit, but we normally use $100 today, just seems better accepted. Typically, all contracts are assignable unless stated otherwise. You would then use an assignment of contract form to assign your interest to your cash buyer. This second contract would spell out your assignment fee. Alternatively, you can actually close on the purchase, then re-sell to your buyer, but in my state (Missouri), that is frowned upon, at least according to the title companies I've used. There are LOTS of details you will want to review in your own state. Do you have a cash buyer already identified? That is a great sign!!

@Mike Bryant thanks for your response,

I was speaking with a cash buyer who told me the type of investment property he was looking for.

So im working on trying to find a good property for him. How did you go about doing your first deal?

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