Assignment or Double Close?

4 Replies

I've been watching a house go through foreclosure. It's up for auction soon. I'd like to do a wholesale on it, its a great house, 2003, looks to need some repairs.

It's in Erath County. Is there a generic Assignment contract or Double Close contract for Texas, or is there one specifically for Erath County, or is it city specific?

I'd like to jump on this, but I don't want it to bite me in the butt for using ththe wrong form or the wrong approach entirely.

I'd love some advice.

thanks!

FYI If you do a double close instead of an assignment you would need to provide all of the initial purchase funds. Plus you have 2 sets of closing cost instead of one.  Upside is that the seller won't see the assignment amount on the day of close if you do a double close. I personally do contract assignments and keep the seller informed to the amount I'm looking to make. I found if I'm fully transparent the process goes much smoother. 

Here's a thread regarding TX assignment contracts. I'd find some others as well. 
https://www.biggerpockets.com/forums/93/topics/629660-assignment-contract-dallas-tx

Before you make an offer FIND BUYERS and know what they'll pay. You're located in a smaller county and it takes a little bit of time and a lot of effort to build that list. But if you don't know what people actually willing to buy from you are looking for, you'll find yourself in a very stressful situation with risk of hurting your credibility. 

Both were very helpful. I recognize that the smaller area has definitely been a challenge already. The larger cities are a little out of my reach so I thought I'd get started here to, you know, build character and relationships. I really appreciate your input.

@Malcolm Jarrell Ok, let me correct you on something that I have seen a lot of new wholesalers struggle with. The house itself doesn’t matter. I see a lot of posts from wholesalers who say they have found a house, but thats worthless if they havent also connected with the sellers. Ive seen vacant boarded up pieces of crap that the owners refused to sell. You cannot be fixated on the house, you need to be fixated on finding the motivated sellers.

With regards to this house thats up for auction, if you are in TX then you need to contact the sellers prior to the auction date because there is no redemption period here. From experience I can tell you that wholesaling a house in foreclosure is difficult because the numbers have to work. You have to know what the payoff amount is, what the ARV is and what the repairs are. Also the seller usually needs some cash. Im not saying its impossible, just be aware there are a lot of moving pieces. The first thing you need to do is reach out to the homeowners and see if they want to sell. Good luck

Your first objective should be to contact the owner to ascertain if they even want to sell. If they do wish to sell, do you know values for that area? Are you knowledgeable on repair costs? Have you negotiated real estate deals before? Do you understand contracts and contract law? Have you ever reviewed a survey to determine if it's usable for your purposes. If the answer to any of these is no, perhaps you should consider working with a seasoned, active investor in your area. He/she will get most of the profit from any deal you bring them but you'll learn from their experience, knowledge and mistakes and still make a little profit. Going it alone with little or no skills or knowledge should not be your strategy starting out.