Can I Assign a Creative Finance Deal?

Question

I feel like there's no reason why this couldn't be done, but I cannot find anything about it online, so I'm probably just looking it up wrong..

Anyways, I'm an Acquisitions Manager, I own my own business, and up until recently have only been working in wholesale. Since learning about Creative Finance, I've branched out more into that & absolutely love it!

I want to add CF Acquisitions to my service list for investor clients, but also for my own company, want to get into assigning CF deals to other investors, until I feel comfortable enough to build my own portfolio.

My question is- HOW do I assign these deals? Would it be the same as assigning a wholesale agreement? Get the seller to accept & sign the agreement, find a buyer who's interested, assign the agreement, get paid a percentage, and close?

Since the #'s used to make sure a CF deal makes sense are pretty close to the same as a wholesale deal (ARV, mortgage payments, repairs, rental comps, etc.), this just makes sense to me. Any help, insight, or tips are welcome- TIA!

Tom Gimer · Answer

Let me spin it a bit differently than @Jerryll Noorden. The issue as I see it is has the seller made the decision to sell to the buyer based upon his/her evaluation of the buyer's ability to perform.

How would you like to contract with a buyer who is an accredited investor and then find out months later that the party who ends up on title is a deadbeat?

Yes, transparency is key... if the seller agrees to such an arrangement after disclosure, all should be well even if the buyer eventually defaults.

Jerryll Noorden · Answer

You absolutely can, but you increase risk.

Your buyers pool now becomes significantly smaller.

An other way of looking at it, is that you now are arguably being dishonest with the seller right? Most creeative financing deals is where the actuakl BUYER, promises the seller certain terms. Now you are promising these terms on behave of someone else that didn't yet agree to any of it.

A solution to this is of course being very transparent with the seller and let them know their risks. But then again, it makes the transaction a lot more riskier and thus harder. But if you have good partners (cash buyers) that you trsut and know and they trust you, I honestly don't see why you couldn't

Eliott Elias · Answer

Ceshker Title Austin

Jerryll Noorden · Answer

First, I do see your point and I don't disagree, remember, I said, "dishonest... UNLESS you are transparent and DO tell the seller you are not the end buyer". It seems that you are transparent so you get a fat ol "good job" check!

And no, I don't necessarily think you should get buyers interested in CF deals....  This, because buyers (most of them) don't care. All they want is to make a profit. If you did ALL the work, creative thinking, setting up the deal and deliver that deal ready to be devoured on a silver platter, I doubt any investor would frown upon you. Au contraire mon ami, you will be seen as extremely competent and resourceful and you would build quite the reputation among otherwise incompetent wholesalers (Wholesalers chill... I didn't call you incompetent, I said incompetent wholesalers those wholesalers that are incompetent get it? )

As for you don't want to be in the situation where you screw up yourself or the seller... that can't be avoided sadly.  The more complicated or the more people involved in a transaction the more probability there is... BUT that can be remedied by indeed being honest AND transparent and explaining the risks, advantages and disadvantages involved. That is what we do. We tell the seller exactly how wholesaling works, and the most common case scenarios "like back-end buyer backing out... (in which case I will give the earnest deposit  left to the seller, or we split it with the seller.

On a personal note,

You are doing very well. You are thinking  outside of the box instead of doing what everyone else is programmed to do by the gurus and you take the sellers interests with high priority.

I have no doubt you will go far!

Briannan Burns · Answer

Thank you!!

Jerryll Noorden · Answer

Please don't mention it. You are very welcome.

:D

Briannan Burns · Answer

Thank you so much! Honestly, that's helped so much, and I feel better about getting started. I was just worried about whether or not it could be done, even though I didn't see why it couldn't haha

You're always so helpful in these forums- it's greatly appreciated!

Briannan Burns · Answer

Definitely makes sense. So I guess it'd be on me to vet the buyers & ensure they're GOOD investors. Do you have any tips on specific questions I should ask, to do so? I'm thinking

Average length of ownershipPOF, of courseCurrent portfolioCurrent mortgages, liens, taxes, & insurances (to make sure they can cover the deal)

Anything else?

Briannan Burns · Answer

Yes, please- that'd be great! I've actually started looking in Texas already for deals, so that works perfectly

Briannan Burns · Answer

I wouldn't necessarily say "dishonest", as I wouldn't tell them I'd be the end buyer, but more of, "I'm an Acquisitions Manager who works with investors to find new investment deals", ALSO my main focus was going to be investors looking to get rid of property already, preferably already tenant occupied, free & clear, etc. etc. to make it easier on everyone lol, or sellers who own free & clear and are okay with seller finance. But, I do see what you're saying!

So do you think I should find the buyers that are interested in CF deals 1st, get their criteria, THEN reach out to sellers? Or do it the wholesale way & find seller, get deal, find buyer..? I just don't want to end up in a situation where I'm screwed & screw the sellers, so I want to find a way to make it work & make sense, 1st lol

Can I Assign a Creative Finance Deal?

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