How Wholesalers Use “Assignment of Contract” To Flip.
Ed, I never use an assignment contract but 2 actual PSA's. I like for my buyer and I to negotiate a price versus an assignment fee. Reason being, the buyer won't know how much I actually have the property under contract for until the closing docs are prepared.What Is An Assignment Fee? The assignment fee in an assignment of contract wholesale deal is the profit an investor stands to make by acting as the middleman. That said, the terms of how the investor will be paid are detailed in the Assignment of Real Estate Purchase and Sale Agreement, and can transpire in more ways than one.Simply put, when a wholesaler assigns his or her contract over to the end buyer, they are given an assignment fee (similar to a finder’s fee), which is usually a small percentage of the property’s value.
An assignment fee is the compensation an assignor receives for selling the equitable interest in a real estate contract to another buyer (“the assignee”). This is also known as a “wholesale fee.” Who Buys Real Estate Contracts?Investor A is the middle man and earns his profit through an assignment fee. As the middleman, your duties are to locate the deal and secure the rights, much like a real estate agent does, and then you assign the purchase contract to a real estate investor. Wholesale Purchase and Sale Agreements.
I hope you can see, having a steady flow of smoking hot multifamily deals to wholesale (and collect fat assignment fees from) isn’t about being a supernatural negotiator, or a real estate genius. Rather, it’s about being systematic, and having a lead generation and lead conversion system that identifies and develops deals, to your exact buying criteria in a predictable, systematic way.
