Today I paid a 100,000.00 Assignment fee !!!

[Jay Hinrichs]

AS all you know I am not all that keen on newbies thinking the road to real estate rich's is paved through wholesaling.

And today I just paid a 100,000.  assignment fee.. can't think of any bigger at least that I knew about  LOL.

I brought a cashiers check to title co.. and the contract was assigned to me.. I have to then put up another 50k in EM for that contract by sept. 1...

Details

3 phase development in Canby Oregon... one chunk will go to neighboring adult care facility to build 80 units.. another phase will go to bigger regional builder and last phase to Lennar..  although I would not mind pealing off maybe 20 lots for our own build's.

7 mil purchase price upon plat approval and final engineering and appeals expiration... another 100k EM non refundable at plat approval.

4.5 million to build out the subdivision...   Letters of intent from these 3 different entities for just under 16 million..

Including assignment fee/  Pre plat engineering and all permits to get to that point I will spend just under 400k in cash.. There are no real estate brokers involved ( except me) although I am now the owner ... so 11.5 all in say 15.5 exit  profit 4 mil  400k of risk capital. IE it craters anywhere along the line and I am out 400k..  18 months start to finish.

Now the buy and hold crowd will not like this because I will have to pay ordinary income tax on the gain of about 1.2 to 1.6 million with a net in the jeans of 2.8 to 2.4 million.. or market craters and bye bye 400k..

Oh well no risk/ no reward.. will update along the way and let everyone know how we are doing.

What do you all think..  Too risky   crazy  ?  or would you go for it as well. ?  curious about feedback.

[Cody L.]

I don't like working with wholesellers in that way but I will work with "bird dogs" that bring me a deal.

Normally it's 3% plus some upside at sale. The largest deal a bird dog gave me was $3.6m

I gave him a $108k check. So I have you just SLIGHTLY beat :)

(I sold the property for $4.8m not much later so it was worth it)