Buyers list vs. Great deals

Brian,

Don't reinvent the wheel. Dean has come up with a system/plan that works. I assume you have an idea what your buyers are looking for. 1st, find the house and lock it up on contract. The key here is to have a "subject to" clause stating that the contract acceptance (on your end) depends on finding funding. Give it 90 days (for example). And if you know that is the type of house and conditions your buyer is looking for. If you have good communications with him/her (buyer) it won't take 90 days. You chould be able to close well within 90 days (the date stipulated on the contract).

I got the PM and posted my reply here incase anyone else wants to add to my 2cts. I hope this works for youu. Good luck.

hey thanks for the advice! just one last question that i kinda didnt understand in Dean's book either, what does locking it up on contract mean? Initiating the contract itself with seller or agent or bank? or what?

Locking it up means that you get the house under contract so that you or your assignees are going to be the ones to go to closing. This eliminates anyone else from getting the house from under you. HOWEVER, you want to give yourself an out clause in the contract just in case your buyers don't come through. Keep in mind tho that most banks are not allowing assignment clauses in the contract so if it doesn't have a good out clause, make sure your buyer will buy it.
Remember also, if you are assigning the contract to another buyer, you are assigning your rights to the contract to purchase and not assigning your ownership of the property. This is the technicality that allows you to assign your contract to anyone.

Hope this helps...

Andy Sager
DG's AndyS

The fist step is to develop your buyers list. Then qualify them meaning you find out what they are looking for and if they really do have the money to buy houses. You may want to get some information on their past deals in order to see what they have closed on and to verify that they are experienced investors.

Next, you will be ready to start finding houses. Work with your Power Team to find the properties that fit your investors criteria. Start making offers through your real estate agent. Remember, it may take 25 offers before someone agrees to your offer, so get busy.

Your real estate agent will use a state approved purchase contract that will give you legal rights to purchase the property and spell out your obligations. Once the seller accepts the offer and said acceptance is communicated to you, you have "locked up the property" meaning you have control.

You will then, and not before, introduce investors on your buyers list to your deal. They can't go around you because only you at this point have rights under your purchase contract to purchase the property. You have not shown your purchase contract to your investors yet. When you quote them a purchase price, you will include your mark up/profit.

If they want to buy it, you will either do a double closing or an assignment. An assignment is easier because you won't have to find the money to do your closing, only your buyer will have to come up with the cash.

The assignment contract will then give your buyer the rights under the purchase agreement. Your assignment agreement should have sufficient legal language to ensure you your profit so that the investor to whom you have made the assignment can't get out of paying you. If you are not sure your assignment is not strong enough to win in court if the assignment is in question, then spend the money with a good real estate attorney to make sure it is.

I hope this clarifies things for you.

Good luck.

Thanks guys! all this info is definitely helping and makes me feel a bit better, but it is still a bit intimidating because i have never done any kind of deal or signed any contracts, maybe its my young age of 22?

:/

Age has nothing to do with it. Remember when Dean started? Because you are young gives you time in life to make more deals.

One more thing, keep asking questions. The more you know the easier it gets.

I hopes this helps you. PM if you wish. Good luck and happy investing.

I have spent many months avoiding assignment deals because my real estate attorney has stated that I could get "stuck" with a property if my buyer backs out. I havent been instructing him correctly in how I intend to keep myself "out of the deal"
meaning I dont want to end up owning the property. You clarify the difference between selling the "right" and selling the " property" , thank you Brent, looks like I need to go back to the Attorney and try again...

Consider putting in your contract(s) a "subjedt to funding" clause thay way you won't get stuck. In my humble opinion. Maybe this will help.