Whenever I put a house under contract to buy I always use the standard Realtor sales contract. If you ever read the contract you will see that it states you can not assign this contract. This being so, if you cross it out and put your initials on it and get the seller to do the same then the contract will now become assignable.
Along with the above, when putting properties under contract to assign I typically put “123 street name llc” as the buyer along with the words “and or assign.” Doing so would allow you to assign the name of the buyer on the contract to anyone you wish.
How does an assignment contract look? Its simply as this:
123 street name llc agrees to assign all rights of the contract written up between x on x day for a fee of x. Please sign below if you agree.
I know it seems very simple but that is it.
Want to learn more on how to wholesale houses? I invite you to look into my 101 wholesale training video. As always, if you didn’t learn anything from the video just email us and we will gladly refund you your money.
To your continued success
*This is not being promoted as legal advice. Please speak with your attorney before doing any of the above.
To get business credit you need to have a llc and ein number setup. If you don’t have them please go to how to setup your own llc to get this done.
Once the above is complete go to dnb.com and register for a free dnb number number. This is like your social security number for your business credit. Once registered it takes 30 business days to receive your dnb number. If you want to get the number faster you just have to pay for it.
Once you get your dnb number you must now use it to get an 80 paydex score. You will do this by buying things from stores that provide what is called a net 30, 60, 90 pay structure. What that means is you can buy whatever you buy and they will bill you 30, 60 or 90 days from the day of purchase for the item. Its like a credit card but base on your business credit vs. yours.
You need to buy things from about 5 different companies, make payment and so 30 days from that day they will report to DNB that you borrowed money from them and made payment on it. Once at least 3 of the 5 companies you bought things through report these activities to dnb you will get a paydex score of 80 which would allow you to move to the next step.
There are 3 type of rehabs that exist. If you can simply identify what type of rehab a property needs and its sqft you can figure out the cost. These numbers are relevant for medium income communities where the houses are selling for 200k to 400k.
Light rehabs cost $20 to $25 a sqft. and it will cover the cost to paint the property, replace the flooring with new carpet or hardwood floors, tile and clean out of the kitchen and bathroom.
Medium rehabs cost 30 to $35 a sqft. will covers all of the above plus the cost of a new kitchen and all new bathrooms + a new roof or furnace.
Gut rehabs cost 50 to $55 a sqft will cover all of the above plus new electrical, plumbing and Sheetrock.
New Construction is 95 to $105 a sqft + Includes all of the above
So say for example the house is 3000 sqft and its a light rehab, 3000 sqft x $25 a sqft = 75k to do a light rehab.
Simply said, figure out what kind of rehab the property needs through photos of the property. Figure out its sqft and you will be able to estimated cost to renovate without visiting the property. We buy 50+ houses a year base on this model and these numbers. Once we get a counter back from the seller we physically go out and look at the house. Once we see it we’ll make our adjustments to close the deal.
We operate our business this way because if you had to go see 100+ houses and then make offers, by the time you do you’ll get all the houses confused and so tired you want out of the business.
For houses in price ranges of $400 to $600k add $10 to all of the above numbers. Subtract $10 a sqft if it is a property between the ranges of 50 to 200k.
How long would it take you to save 100, 200, 300k? Exactly… A pretty long time. Being so, to me knowing how to raise money is like having the ability to time travel. This being said, what does it take to raise?
First of all, raising is very easy. When you go to a real estate networking event typically half of the room is full of money. Its just, no one is going around asking you to take their money. Instead, what they are there looking for deals they can buy for themselves. This being said, how do you get them to invest in you?
You don’t… What you do instead is ask them exactly what they are looking for and if you were to find such a thing would they be interested in partnering with you to take advantage of the opportunity. Its that simple!
This is one of the ways to raise. Literally everyone that is at an event that is a rehabber is potential a money partner! I mean what is raising anyway? Its getting access to money to do what you want to do right? What is the difference if its through a partnership? NO DIFFERENCE at all!
Now.. you don’t have to do this for your very first real estate deal. I highly recommend you don’t as getting paid is way more important then making more money because at times getting paid an assignment fee is actually more valuable. Get paid, once, twice, 3 times and then slowly transition over to doing partnerships that way you can make larger spreads. Then slowly transition to real raising where you pay people base on cost of capital vs.. giving up 50% partnership.. Point is.. it all starts here so do it up.
Like my write-up? Want to learn more? I invite you to get my 101 raising money video.