This information is based on the Think a Little Different course, so if you have the course you can reference the material mentioned. If not, you can ignore those parts.
The following steps will assist you in locking up a property for 30, 60 or 90 days and re-assigning it to an investor.
Finding Great Investment Property
Using Dean's "Think a Little Different" Real Estate Program To Help You Find Property
In Dean's real estate program, he has given you all the tools you'll need to go out there and find amazing deals in real estate by simply "Thinking a Little Different." Pay particular attention to the chapters on Taking the Opposite Approach, Finding the Flexible Sellers, and Personal Experience: Making Full Price Your Best Friend. The techniques outlined in these chapters will be instrumental in helping you find those incredible properties other investors have many times overlooked, properties which could end up putting thousands of dollars in your pocket!
Review the secrets to Dealing with People, the seller you will be coming into contact with, in both the Huge Profits and No Money Down manuals. Understand what a seller's immediate needs or "magic buttons" are regarding their piece of property and gear your approach to meet those needs. Remember, the way you deal with people is one of the most important "secrets" of how to become a successful in life. Learn how to deal with people, and with their emotions, before approaching a seller with an offer to purchase their property. Find out everything you need to know about the property before you approach the seller. How long has the property been on the market? Does the seller need to sell the property right away or do they just want to sell it? Do they owe a lot of money on the property? Are they in a financial bind? It is so important to know all of these things before offering to purchase the property from the owner so you know which "magic buttons" to press.
Example: You notice a "For Sale By Owner" sign has been out on the front of an old house in your neighborhood for the past three months. You know, because you live in the neighborhood, that the reason this property probably hasn't sold is because it is at the end of a cul-de-sac and doesn't get any traffic from the outside streets. Because this property is a "For Sale By Owner," you know it is not listed through an agent on the Multiple Listing Service. The owner has been trying to sell the property for 90 days with no apparent signs of giving up and hiring a realtor. This could indicate that the owner of the property does not want to compromise the money he or she will get from the sale of the property, whether it be total dollars received from the equity the owner has in the house or total dollars used to satisfy the liens the owner has on the property. Also, because the seller has had the property on the market for three months with no attempts to hire a realtor, you know that time may not necessarily be as important to the owner as getting the most money out of it as possible.
Knowing all of these things, you are equipped to approach the owner with an offer to purchase the property from them. You might explain to them that you would like to offer full price for their property in exchange for the ability to lock the property up in escrow for 30 days with the rights to know that in this time, you will be posting his or her property on an EXCLUSIVE real estate network of hundreds of investors, waiting to potentially purchase great investment properties just like theirs. The owner has nothing to lose! If he or she will simply allow you to lock this property up for 30 days, you will be advertising their deal at no cost! You can explain to the seller you will be paid by the investor through the fee you negotiate directly with the investor when they offer to purchase the contract and therefore purchase the seller's property. Again, the seller has nothing to lose and a quick sale of their property to gain!
What if the seller doesn't want to basically "take their property off the market" and lock it up with me for 30 days if I have the right to back out of the contract?
You can point out to them that they have already had the property on the market for 90 days with no luck. You believe this is a great investment property but that it just hasn't had the exposure it needs to be sold. Why not give you just 30 days to close on the property? It won't cost them a dime! In fact, this could potentially save them thousands of dollars!
If the owner still does not want to lock the property up under this agreement, and you feel this is really a great investment, you can make an offer to purchase the property yourself, contingent upon both your ability to acquire financing and a clean inspection of the property, while continuing to retain the rights to re-assign the deal to another investor.
Helpful Contingency Clauses
Contingency clauses in real estate contracts are designed to protect both the buyer and seller of a particular property from running into some of the unforeseen "pitfalls" which could be associated with either the sale or purchase of that property. Below we have included some of the most valuable contingencies one can include in their contract to purchase real estate. Use them! They will prove to be priceless to you! (Not to mention, they may have the ability to save you time, money, and most of all, headaches!)
1. Reassignment Clause – This allows the buyer of a piece of property to re-assign the purchase contract they have on that property to another buyer without penalty.
2. Cancellation Clause – This allows the buyer to cancel the purchase contract with the seller, within a specified length of time, without facing a penalty or losing any earnest money they may have offered upon initiation of the contract.
3. Ability to Acquire Financing – This contingency allows the buyer to cancel the purchase contract of a piece of real estate without penalty if they are unable to secure the financing necessary in completing the purchase.
4. Property Must Pass Inspection – This contingency states that the property defined in the purchase contract must pass all inspections, and that if the property does not pass inspection, or if the seller is unable or unwilling to honor all requests of the buyer in replacing or repairing any or all items requested by the buyer, the contract is null and void without further penalty to the buyer or seller.
"Locking Up The Deal"
Once you have made a verbal agreement with a seller to purchase their property, you'll need to open up an escrow account with a title agency or attorney to make the agreement legal. There are many title agencies out there, some of which charge fees for opening up an escrow account and some, which do not. You will need to research title companies in your area to find one, which will not charge any fees or require an earnest deposit for simply opening up an escrow account with their company. Let the escrow agent know the contingencies specific to your contract with the seller, that you will have the rights to re-assign the deal to another investor and that you will have the rights to exit the deal at the end of 30, 60 or 90 days, and they should be able to assist you in completing the purchase agreement and all other necessary documents correctly.
In many states an attorney can perform the same duties as a title agency. So if you have an attorney that you are comfortable working with, he or she may be able to help you complete all of these steps to make sure your contract has all the required sections needed.
Market Your Deal
Market your property online and in your local area.
Receiving Offers From Investors
All interested investors will then contact you to work out the details of taking this great investment over from you! In your conversation, be sure to mention the dollar amount you feel is fair for the investor to pay you as compensation for assigning this contract of sale over to them. Then, once both parties agree, be sure to specify in writing the amount the investor has agreed to pay you in exchange for the ability to have you re-assign the contract to them, and be sure the contract is signed and dated by all parties.
You will then contact your escrow agent or attorney and let them know you wish to re-assign the purchase agreement to another investor. The agent or attorney will help you fill out all necessary paperwork in completing the re-assignment. When this is done, the investor will begin the escrow process with the seller of the property and will compensate you as outlined in your contract with them.