Can You Assign REO's? Real Estate Investing Training Video

[tedabalos5]

REO’s are still here and the time to make money is NOW!!! If you are new to real estate or want to get into REO’s first read this book “REO BOOM” it’s a helpful book that walks you thru the entire REO process.

[NajeeNIB]

How does creating an LLC, satisfy the REO's need to see proof of funds to allow them to accept the offer? Do you form an LLC with the Buyer and show his funds? And why would a buyer do this with me. I am not sure that I understand.

[localmentor]

@NajeeNIB - one has nothing to do with the other - you use an LLC to get around assigning and/or having to use flash cash at closing. You need proof of funds for whatever you are closing in/taking title as/flipping as - hard money lenders can get you a funding letter or just google "proof of funds letter" there's many sites that let you create your own funding letter. this is not a problem.

[TANISHAADJO]

whats the site to to create the llc in CO?

[localmentor]

@TANISHAADJO the Colorado Secretary of State's website - just google it - go to the business division then you can search names to make sure no one else is using the name, then "file a new document" and you can select new LLC

[TANISHAADJO]

so i assign the contract in my llc? i assign the rights over to my end buyer?

[localmentor]

@TANISHAADJO the LLC writes the offer to purchase the REO. Once you contract is accepted, you sell the LLC or the membership interest in the LLC. You'll need an agreement to sell the LLC, then your buyer closes on the contract. You may have to work out the earnest money - often I put it up before I find a buyer - else If I haven't, I just have my buyer put it up. have to coordinate with the title company or closing attorney who will be signing for the LLC and Statement of Authority

[TheMotifES8]

Hey Mike, what type of contract do you use or more specifically, where can I get that contract to sell the LLC to the end buyer? I'm sure the buyer would also want to assured the LLC is clean & clear from any other activities, litigations, bills, liens, etc.... Does your contract address those concerns if it becomes an issue to the buyer?

-Do the buyers  make the check payable to your name or your company?

-After you sell your LLC, is there anything else you do to sever ties between You/LLC?

[localmentor]

@TheMotifES8 comes with either the "lazy man's guide to wholesaling houses" or 2010 Wholesaling Seminar on my blog at michaeljake (add dot C O M)

[localmentor]

@localmentor ...and yes it addresses all those concerns for the buyer...including whether or not membership certificates have been issued...which usually they are not.

[OhioDreamer]

Hi. It's $125 to create an LLC in Ohio, if I live in Ohio, can I create an LLC in Colorado and make offers on homes in Ohio? Also, after I submit the LLC online, can I immediately make offers in the LLC name, or do I have to wait? Thanks!!

[technoracer79]

An LLC in Illinois is $500. What's the point of paying that much, and then loosing your company, by selling it?

[localmentor]

@technoracer79 - you are not creating the LLC to run as a business - it's a means to and end - avoiding flash cash expenses and un-assignable contracts. Going to contract with a Trust is another option, but in my market place, they are a big red flag and I would not get as many contracts accepted. $500 to make $5,000 - do the math - else, get a Colorado LLC for $50.

[Filmaker25]

@technoracer79 Forget that register it as a Nevada or Wyoming Cor.

[diamondlife6]

To submit the offer to the REO's agent, we are required to show proof of funds.

How do we show proof of funds to submit an offer?

What is the time line of events to do this deal?

Thank you

[localmentor]

@diamondlife6 google fastfixerfunding or ivisionary - you can create your own funding letter

Offer to closing - takes about 3 weeks for most REO's.

[tmob71]

@localmentor. Great video. One question... Does creating an LLC keep the bank from wanting to see proof of funds?

[localmentor]

@tmob71 - Nope! fastfixerfunding and you can create your own funding letter.

[RLJ93727]

Like the video

[treada1583]

WOW micheal,great video,trent

[linhkvo]

You're the man. Keep it up

[thinkofsomethincleva]

So if you're doing a cash deal, then you can always assign it without any problems right? (assuming the seller agrees to the assignment/exit clauses)

[localmentor]

I have an assignment clause built into my contract so by them signing the agreement, they are agreeing that it can be assigned. I use the same clause whether I keep it, or assign it.

[jreq01]

I live in Texas and I want to try this. I understand you can file for the LLC online but how much time will it take for me to actually go out and start making offers, like once you file with the SOS online its an official LLC so I can go out right then and there and start making offers with the LLC? And would I include a sell provision in the operating agreement so I can sell the LLC to the other buyer? And would he have to dissolve the LLC after the he were to buy the actual house on contract?

[arcman002]

Mike so with the LLC as the buyer, the Seller (Bank) wont require to see your proof of funds?

[reycake]

What kind of verbage can I put into the contract with the lender to protect me just in case I can't get a buyer?

[localmentor]

the only exit you need is an inspection contingency that's built into every state contract I've seen. If you can't get a buyer within that time frame - at least get feedback from the buyers that have seen it and counter offer on your inspection to lower the price to where your buyers will take it (and you get a spread).

[adamcrap]

Search "transactional funding"

[localmentor]

LLC=$50, Transactional funding=2pts or typically 1k-2k or more in expenses. You do the math.

Many guru's would have you use transactional funding because they refer you to the transactional funding source and make a profit on all the transactions you do there.

[220lucci]

do you have to have a special title company you deal with or will any title company let you sell the llc to the 3rd party

[localmentor]

it's a personal property transaction, the title co.has nothing to do with it, so you can use any title co. - usually with REO's you can't pick the title co anyway.

[localmentor]

watch my video on wholesaling REO's. NO you don't use an assignment. You create the LLC first, use that on the contract - then sell the LLC. Not sure what you mean by court house - we're talking about REO's - which means it's past court house - it's lender owned - if you buy at the court house, you need cash then and there - not a wholesaling strategy.

[220lucci]

so what your saying is create an llc and put the llc in the contract...but not the assigment of cantract with it right ....then sell the llc sepeate to the buyer then he takes over the contract

[peachtree05]

so you put the REO property under an assignment contract 1st and then go and put it under LLC? couldn't you put it under LLC at the court house?

[localmentor]

There are some high volume wholesalers that can get assignment deals done with lenders because of their reputation and ability to get it "done". Follow the rules till you can play that angle.

[localmentor]

it might work or it might cost you the deal. I DEFINITELY See lenders having a problem with that. Just do it the right way. You need a business process that works EVERY time. What you might save in time/$ on one deal is going to COST you thousands in deals you WON'T do because the lenders will kill the deal.

[localmentor]

typically you're going to make more double closing a short sale to an end-user who'll get a mortgage - that is getting harder and harder to do with seasoning requirements. not as likely to short sale one and assign to an investor as you can get them cheap, but often not cheap enough for a rehabber.

[space10]

What are your experiences with short sales? Have you ever been able to assign those? Any problems? How long did it take? (since I hear short sales take forever to close and esp. now since lenders are waiting for a bailout)

[localmentor]

yes. keep in mind though, some agents will not "get" it. I even had a former student of mine who's an agent tell another current student of mine "you can't do that" - right up to the point where my student made 6,000 and the agent made 1800 commission.

[localmentor]

you need a buy/sell agreement. I had my attorney draft mine to reflect "real estate" situation.

[shonasplace]

how do you sell the LLC?

[localmentor]

just as easy in CA. LLC's cost more to start, but it's still what investors do, not to mention based on the values of properties you typically make much more per deal because of the higher values.  No excuses - go make some money!

[KuNkLe81]

Totally agree! I was referring to creating the LLC online in a few minutes. Thanks for the kick in the butt =)

[KuNkLe81]

Great strategy. I WISH California made it this easy!