Hi, I am a RE newbie in Massachusetts. When wholesaling in MA can you assign the contract or is a double closing always needed?
Wayne, you can assign the contract or do a double closing if you have a cash buyer. Some use the double close to shield their wholesale fee. They feel (and rightfully so) that their profit is no one's business or want to ensure they don't get nickeled and dimed on the next deal. Assignments seem to be the cleanest and most transparent method, but you are showing everyone your cards. The assignment fee is stated right there on the HUD.
I just ran into an issue with wholesaling a property and the buyer requires conventional financing. I can neither assign or double close because the financing can't start until I am shown as the owner of record. There are probably a number of ways around this, but he is a friend and we don't want to tread into any gray areas in our first deal together.
Also some bank owned properties will have a 90 day seasoning provision on the resell.
The questions you have to ask yourself...
- what kind of money is the buyer using (cash, conventional financing)
- is it banked owned or are there any seasoning provisions in the P&S
Lastly, you have to make sure your closing attorney understands assignments and/or double closes and get their advice first.
Thanks for your insight Bob, appreciated
@Wayne Jewell Welcome.
@Bob Couture has some good points, especially getting an Attorney who is doing this type of work now! We usually have one at our REIA meetings. Next one includes updates on the new HUD which is supposed to be "simplified" by Frank-Dodd in August 2015:-(
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