How should the assignment contract be worded to protect me

Question

Hello BP....

I was wondering about the assignment contract and how should it be worded to protect me if the buyer backs down or whatever else that can go wrong.  I may have my first deal on my hands.  A multi-family 5 unit fully occupied no repairs needed deal.  $750,000 cash deal, cap rate 13.2%....I'm thinking a $10,000 should be for myself which brings it to $760,000....Annual:   income $114,288...expenses $15,200....noi $99,088 (what is that)

Is this a good deal for a buy and hold / investment property?  HELP!!!

Account Closed · Answer

@Ron Cole

The assignment agreement isn't used to protect you, it is used to assign the purchase contract.

@Curt Davis

The earnest money would have been negotiated in the purchase contract.

Ron Cole · Answer

It's in the talking stage of doing so right now...

Wayne Brooks · Answer

Since you said you're talking to "the agent", I assume it is listed, or at least widely exposed.

Ron Cole · Answer

Alright, thanks for the info.

Ron Cole · Answer

If the property is listed then I would obviously say no.

Wayne Brooks · Answer

Ask yourself this....do you think you can find a buyer on your own who is willing to pay more for the property than everyone else who has seen this property, both agents and their buyers, during all the time it has been listed and advertised to the world?

Ron Cole · Answer

I've informed the agent that I'm a wholesaler and asked her have she ever worked with one.  She answered yes.  I've found this property on loopnet, found out about it from one of the podcasts from here....

Curt Davis · Answer

you will run into issues if this home is listed on the MLS with an agent.  They are not going to entertain a wholesaler.

Ron Cole · Answer

I can honestly tell you, I have no clue.  I never even expected to be in this position this early in the game.  I'm excited but worried at the same time.

The agent is asking for 10% down of the seller's asking price, $75,000...I'm wondering if that's her (agent) earnest money?

Wayne Brooks · Answer

The NOI is Not $99k on a gross income of $114,000, not possible if you use any kind of of even optimistic assumptions about vacancy, repairs and capex.  I'm guessing that supposed $15k is just taxes and insurance.