for NYC newbies, that is.
I posted a question of assigning step by step in another forum on another site. Here's the response of an investor here in NYC :
Dated : August 20, 2009 at 11:05:11
Subject: Re: Assigning.....step by step.
I'm in the NYC area, and while I don't do assignments as a vehicle of purchase and sale, but one managed to come my way some years back, so I'll give you the mechanics, which is pretty simple, and some of the issues.
Almost ALL sellers in NYC uses attornies, and you'll need to go through them as the first obstacle. An attorney with his client's interest at heart would NOT want his clients to be locked up in an assignment. The seller and I had specific reasons to do the assignment, his attorney agreed to it. Bascially these are the steps:
1. Almost all P&S contracts in NYC has "this contract is not assignable" as an addendum. In our case, it was changed to "This contract can be assigned once". This means you'll go find a buyer instead of another guys who's going to assign it.
2. Once you find the buyer, there is another P&S contract between you and YOUR buyer. In the line that says seller, it says "Your name, as assignee".
3. You would need to work with a bank who would accept the contracts written as such. Our bank (who since went out of business) wanted to see both set of P&S contracts.
Having done RE investing in the NYC area, I find doing assignments difficult in the NYC area for a number of reasons:
- Many transactions are within ethnic groups that like to deal with quick cash transactions. A contractor friend of mine was going to sell a home of his, he lived there over 40 years, quick and cheap, a neigbhor wanted to lock it up as an assignment, and sell it. His wife and daughter got suspicious, convinced him to speak to a broker down the street. who instead listed the place $75,000 over what his neighbor offered, a bidding war between two builders erupted, and he was paid about $535,000, ALL CASH by one builder if he can pick up and leave in two weeks. His deal with the neighbor was originally around $425,000.
Conclusion?? You can do an assignment with an elderly FSBO seller, who's not going to check with anyone, lock it up cheap, and move fast. Your problem is going to be when their family members find out about it, and yell fraud.
- You'll have problems with RE brokers checking the public records, find the sellers name, and want to konw who you are. My seller in the assignment had to refer numerous calls to his attorney, who in turn have to verify that I am legit.
- Most FSBO sellers, who want to sell, want too much money, and they don't care how long it takes to sell the place. The exceptions are those who price them cheap, just to sell it fast. Now, you come on the scene to lock it up, and to make the assingment work, you'll have to mark the price up, to make your profit. What does this mean?? You'll lock this thing up a few months, and meanwhile the guy in a hurry to sell is going to call you up everyday.
Now, in these cases, in my area, if the price is cheap enough, it's a nice size lot, zoning allows greater density, builders are going to come in, pay all cash, snap it up, and ask the seller to leave in 2 weeks.
Me: So.....what do I do now DG Family???
The race isn't given to the swift, but to those who'll endure to the end.