As a new investor, I've joined a few free trial sites that list foreclosures and comps in the area. The profit margin for some of these homes based on comps in sq ft, room numbers and location are great for investors that have the money to acquire the property. However, would a bank allow a Wholesaler, such as myself, to assign my rights to an investor? I have seen different forms of this question and a variety of answers. Is it on a case by case basis?
Should I look into obtaining a Hard Money Loan and just buying the property myself, doing the rehab and putting in back on the market? Nashville is hit-up hard for residential property.
Popular topic today @DaVon Brooks ! I really doubt banks would allow the assignment thing. If you have a good enough deal (70% FMV - repairs) a hard money loan would probably be the way to go. With those, the costs are high as you know but in the buy quick world, it is the availability of the money that's important. Maybe talk to a couple HMLs and start a relationship for future potential properties? See what they are looking for? How quickly they can fund? (I've never done one. The costs and risks are more than I care to deal with.) Someone else that has uses HML want to chime in?
what are these sites of which you speak?
@Steve Vaughan Thanks for the input! The HML seems to be the best option. The assessed value of the property as-is is about half of the MAO for the property, so its a great deal. Good enough to make ME want to come in as the investor on this to reap the large profit on it, but understandably I hesitate to make my first investment based on debt (loans).
I wonder if contract wording without specifically saying "assign" would work for a bank.
Banks won't recognize your "Rights as an investor". They only recognize owners and/or the legal, authorized representative of an owner so, you can assign all you want. Makes no difference to the bank. If you don't own it, you have no rights as far as the bank or the property is concerned. Even if you are on title preforeclosure, your simply going to be added to the list of notices sent of the intent to foreclose.
@Ron Scribner are you saying that the bank "should allow" me to assign, or rather, I need to be going in as a cash buyer?
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@Davon, I'm saying you should go in as a cash buyer, as an "Assignment" is not relevant to the bank.
@DaVon Brooks , how much cash do you have saved to begin your new goal to be a real estate investor? Have you approached a bank to see how much of a loan you would qualify for?
The first thing you need to do is figure out how much of a budget you have to invest. Once you know that, you can begin assessing various properties based on how much it would cost to purchase+rehab. It will be easy to determine if this property is for you once you know what your budget is?
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