| Wouldn't it be nice if you could become a | | | | But before we sign a contract, I explain that |
| wealthy real estate investor just by filling | | | | I need to show their house to the appraiser, |
| out some paperwork? Well, you can! One of my | | | | the termite inspector and to a couple of |
| favorite ways to make money in real estate is | | | | different rehabbers to get bids on the work. |
| to get a property under contract and then | | | | |
| find another buyer before the closing date in | | | | They agree. |
| the contract. | | | | |
| | | | I also ask them to sign an assignment |
| In order to do this you have to be able to | | | | document which simply states that they |
| fill out a real estate purchase contract | | | | acknowledge that another person may step into |
| (i.e., the paperwork) correctly. You won't | | | | my shoes and buy the property. |
| need a large down payment or good credit to | | | | |
| make this work, but you do need to be a | | | | They agree to that, too, and sign the |
| stickler for details when you make your | | | | document. |
| offers (i.e., fill out your real estate | | | | |
| contract). Have a real estate attorney review | | | | As I leave, I put a For Sale By Owner sign in |
| your contract before you get the seller's | | | | their front yard with my phone number on it. |
| signature. | | | | |
| | | | Within the hour I get phone calls from other |
| Now that there are a lot of foreclosures on | | | | real estate investors who know the house is |
| the market, I often get calls from families | | | | on the sheriff's sale list. They want to view |
| about to lose their home. They want to sell | | | | the property and make an offer. |
| quickly, but their house needs repairs. In a | | | | |
| situation like this, I get the house under | | | | The following day I show the house - in its |
| contract and then assign it (that is, sign it | | | | deplorable condition - to a couple of |
| over) to another investor who is going to do | | | | investors who specialize in rehabbing |
| buy the property, do the rehab and put the | | | | property and putting it back on the market. |
| house back on the market. | | | | |
| | | | The nice thing about working with other |
| Let me show you how it works. | | | | investors and rehabbers is that you don't |
| | | | have to clean house first. |
| Imagine you're sitting at a kitchen table in | | | | |
| the home of a couple you've just met. | | | | You don't have to bake cookies for an open |
| | | | house.You don't have to mow the lawn. You |
| Their kids are in the backyard playing with | | | | don't even have to clean the bathrooms. |
| the dog. | | | | |
| | | | See, investors and rehabbers aren't looking |
| They offer you a glass of iced tea while you | | | | for a house to live in. |
| look through their mortgage documents and | | | | |
| verify the amount they owe on their house. | | | | They're looking for structural problems. |
| | | | They're calculating the cost of paint and |
| "How soon will you be able to move?" you ask | | | | carpet. Water heater doesn't work? No |
| them. | | | | problem. |
| | | | |
| The man and woman look at each other. They | | | | The only "bad" thing about dealing with other |
| look at the piles of stuff in the living room | | | | investors who want in on your deal is that |
| - everything from stacks of unopened mail, to | | | | some of them overstate (make that "lie |
| dirty laundry, to half a dozen used pizza | | | | about") their ability to close quickly. |
| boxes. | | | | |
| | | | The guy who can guarantee he can close the |
| No one has cleaned in months. The odor of | | | | deal before the date of the sheriff's sale is |
| sweaty shoes stings your nose and the carpet | | | | your guy. |
| is fuzzy and gray from dust balls. | | | | |
| | | | You sign over your rights in the contract to |
| Don't even get me started about the | | | | the other investor in the assignment |
| bathrooms. | | | | contract. He becomes the buyer named in the |
| | | | contract - and you drop out of the picture. |
| For anyone who works with people facing | | | | |
| foreclosure, this is a common scene. | | | | Your assignment fee may be $1,000 - $3,000, |
| | | | depending on what it's worth to the other |
| I see it all the time. | | | | guy. |
| | | | |
| Something happened here. One of them had a | | | | Everything is negotiable, including your fee |
| medical emergency and they didn't have | | | | and when you get paid. |
| insurance. Or she lost her job. Or he bought | | | | |
| a boat and then had to buy a truck to haul it | | | | If you've never assigned a contract to a |
| to the lake. They got behind financially and | | | | particular investor before, be sure to get |
| before they knew what happened they couldn't | | | | your assignment fee (cashier's check or money |
| make the mortgage payments. | | | | order) upfront when you assign the contract. |
| | | | |
| For a couple or three months they really | | | | However, if you've had a good experience |
| thought they'd get caught up. But it never | | | | working with a certain investor before, you |
| happened. | | | | may agree to wait to collect your fee until |
| | | | the closing date. It's up to you. |
| So they gave up. | | | | |
| | | | Now that you know how simple it is to "buy" |
| Now we're sitting at their kitchen table. The | | | | real estate with no cash and "sell" it before |
| sheriff's sale date is just a couple of weeks | | | | you own it, not having money, or good credit, |
| away. | | | | or access to financing can never keep you out |
| | | | of the real estate investing game again. You |
| I'm here to buy their house, save their | | | | can become a wealthy real estate investor |
| credit and help them get on with their lives. | | | | just by filling out paperwork. |
| | | | |