Real Estate Investor · san antonio, TX · Member since 2008 · 8 posts · 0 votes
Hello everyone,
My name is Edgar, and I'm an alcoho........oops wrong introduction lol.........jk....... :mrgreen: I'm a day trader and a real estate investor. Moved to San Antonio from Los Angeles and bought a bigger and cheaper house and ended up staying here.
I would like to get some info about assignments and whether they are legal. For example: I'd like to buy a home that's appraised at 800,000 for 710,000 and simultaneously assign it or (sell it) to a ready buyer at 800,000 realizing that 90,000 gain without even getting a loan myself. Is that possible?
Real Estate Investor · Atlanta, GA · Member since 2008 · 118 posts · 0 votes
19y
The assignment is up to the lender. Many lenders frown on assignments. They look at them as possible kickback situations; meaning a portion of the assignment fee goes to the Buyer. I know Texas is under tremendous scrutiny for these types, and other, creative transactions. I would suggest checking with the lender of the end buyer as well as the title company you will use for closing.
I hope this helps you in some way.
Loveland, CO · Member since 2008 · 1k+ posts · 123 votes
19y
Hey edgar, welcome to TX.
One thing that I would caution you about. In CA an $800K house is a "first step-up" house, in TX it's way up in the upper reaches of the market. Experienced investors know that the top 10% of any deal is fluff, and it's probably closer to 15% on upper end deals.
Add to that the $24K in annual property taxes and the holding costs on that unit could eat you alive in short order.
Real Estate Investor · san antonio, TX · Member since 2008 · 8 posts · 0 votes
19y
Thanks for all your inputs guys, I appreciate it.
So if the lender is ok with an assignment, that means my name goes in the purchase contract as the "middleman" and escrow pays me the differential gain? Please elaborate if anyone is familiar with the process.
Actually the assignment that I want to do is in California, I'm not messing with Texas at all for the reasons you guys mentioned. My primary house is here in San Antonio, but I want to purchase a house/condo in Glendale, Ca.
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
19y
I am familiar with the process, and the title company pays you whatever is dictated in the assignment of contract as your assignment fee.
In an assignment you will assign your contract with the seller to your buyer with an assignment of contract that will outline the original contract price and your assignment fee. The person you assign it to will be become the legal holder of the contract. The original contract must be specified as an assignable contract. Both the buyer and seller will know exactly how much you are making on the deal because your fee will show up on the HUD1.
Residential Real Estate Agent · Moriches, NY · Member since 2008 · 635 posts · 9 votes
19y
the appraisal for the bank is paramount.
also - i'm just going to throw a number out there - IF this house is "worth" 810k - and "worth" means WHAT THE BUYING PUBLIC WILL PAY - aka market value -
then for me, personally, i would not pay a dime more than 700k MAX for the property in order to have a smooth assignment and i stress the whole market value thing very much.
people like to throw numbers around, but they have NO IDEA what market value really is. they just think they know.
now in my local market - if it was worth 810k 9 months ago - it's now "worth" the same amount right???
WRONG - the value of any home is dictated by the BUYING PUBLIC.
today, in my market, i wouldn't contract a 810k house for a dime more than 600k. this would afford me a very smooth transition most likely - with buyers jumping at a price of say 720k, and because i contracted it so low, i can play with the number, heck all the way down to the mid 6's...and still make over 45k.