Rental Property Investor 路 New York, NY 路 Member since 2019 路 27 posts 路 6 votes
Can someone share a HUD Closing(Of Course no personal info), I'm trying to compare my HUD statement. I used a Hard Money Lender with a Wholesaler. Issuing I'm having is the Assignment Fee and the money i need to bring to the table at closing.
Rental Property Investor 路 New York, NY 路 Member since 2019 路 27 posts 路 6 votes
6y
I see the assignment fee listed in POC paid out of Closing. I thought it was paid by the HML or whatever bank I'm using to close the deal. Paying the assignment fee ($10,000) every time I close a deal PLUS the closing cost can get very expensive and limit the amount of deals I can close.
Specialist 路 Delran, NJ 路 Member since 2016 路 2k+ posts 路 951 votes
6y
I wouldn't expect the HML to pay the wholesaler's fee, but the wholesaler should be working with you not the HML such that you know what your purchase price is and their fee would be the difference between that and what they got the house under contract for. For instance, if the wholesaler came to you with a purchase price of 110K and they got the property for 100K then the HUD should reflect a purchase price of 100K with their fee listed appropriately. So in essence you are paying it, but you're just paying whatever your purchase price was.
That's one if the differences in dealing with a Wholesaler. From the sellers perspective they are getting $100,000 for the house. However they are selling you that contract for $110,000. Often times they demand the $10,000 up front in a non refundable deposit, so that if you back out they are still covered. Also they don't have to chase anyone for it because it is already sitting in their account until closing.