Real Estate Contract Assignment
Proven Profits With No Risk
(Simple, Especially for Beginners)
Real estate contract assignments are probably the least complex profit model if you are looking to get into the money making world of real estate.
Basically assignments are an excellent way to generate profits with very little risk or without having money of your own. So if don't have money or credit to actually purchase properties, this model provides a great opportunity. One of the major benefits of contract assignments is it's very easy to get started, all you need is motivation, a little basic marketing know how, and an understanding how these deals work.
What is a "Contract Assignment"?
A contract assignment happens when you find a motivated homeowner ready to sell and you negotiate a sales agreement to purchase his or her home, never intending to take title to the property. As soon as the contract is executed, you may sell the contract or the "right to purchase" the property to a real rehabber that will take title, fix up the place and sell or rent it out for a profit.
Your profit or fee comes from the actual transfer of the contract to the final investor. The typical fee is generally from $500-$5000 per transaction.
Where Do You Find Properties To Assign?
There are numerous ways to find homeowners that are willing to negotiate a contract assignment.
Preforeclosures are one great source.
Unfortunately many homeowners have absolutely no way to continue making monthly mortgage payments. They could be victims of job loss, divorce, injury or a spouse passing away or any number of reasons that prevent them from making continued monthly payments. These homeowners need help whether they realize it or not.
Once a homeowner misses one payment technically they are in default on their mortgage and probably need your help whether they care to admit it or not. Our example assumes the homeowner cannot continue paying.
Your job is to provide the best solution to a distressed homeowner that has no way to continue paying the mortgage and will eventually end up in foreclosure plus destroying their credit in the process.
Sadly, there are plenty of homeowners in this situation that are many years into their mortgage and have plenty of equity built up. These are the homeowners you need to find and there are plenty out there, probably in your area as well. Interacting with them will create a win-win scenario.
How will you create a win-win situation where everyone profits?
Once you've evaluated the situation and have successfully communicated to the homeowner the fact that doing NOTHING and waiting will have devastating financial consequences, you can start negotiating.
Lets see how an offer is made to the homeowner...
So for example lets consider a property is worth $200,000 fixed up and the owner had an original and still owes $50,000. The house needs $20,000 in repair to compete with comparable properties in the area.
After market price of the home = $200,000
Investor willing to pay 60%= $120,000
Minus repair $20,000=$100,000
Minus payoff on note 50,000= $50,000
Minus your assignment fee 8% ( 50,000 * 8%), $4000= $46,000
Minus closing costs $3500= $42,500 (cash offer to homeowner)
Homeowner Wins - The distressed homeowner walks with $42,500 at closing which is not bad considering the distressed homeowner would get NOTHING if the home went in to full blown foreclosure and was sold at a sherries sale.
Investor Win - The investor who accepts your assignment gets a below market valued house that he can potentially make about 80k from.
You Win - You the assignor made a nice fee of 4k for bringing the two parties together, no risk on your part at all.
Everyone is happy...
This is a simple anatomy of a typical contract assignment deal. What will make you stand out to sellers and investors is how organized and professional you are in delivering your information.
Why not learn more about Real estate contract assignments? If you want a great step by step method that gets you assigning contracts in about 30 days from start to closing and collecting fees, take a look at the link below.
http://findandassign.com/clickbank.html?hop=seancollin
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