Foreclosure Investing - Why You Must Learn To Assign Contracts

A remarkably simple yet powerful and profitable strategy used by foreclosure investors that requires no investment cash, is called 'assignment' or 'flipping'.

The learning curve is easy, takes no special license and it can put a nice chunk of cash into your pocket. This type of foreclosure training is available.

Once you've invested the time learning and mastering this type of transaction and find out how lucrative it is you’ll wonder why you ever wasted time with a 'JOB'. It's not uncommon to acheive hourly rates of over $100.00 an hour when you analyze how much time you actually put into each deal.

The key to making money this way is first sourcing properties in default that fit specific criteria, and step 2 is learning the step-by-step process of how to approach, structure and close the deal. Again, finding the right foreclosure training is critical (A link to great training manual is provided below, perfect for total beginners.)

The successful foreclosure investor first must source a property that is in the early stage of default, hopefully less than 30 days. Also, you are looking for homeowners that have built up equity but for whatever reasons won’t be able to handle their month to month payment.

A typical situation would be finding a distressed homeowner currently paying a monthly mortgage bill of $1,100 but can't afford to continue making the payment. Liquidation is the homeowners best option and decides selling the property to YOU is the best way out.

You'll want to make an offer on the property quickly but no more than 65% of the 'as is' value. Furthurmore, a realistic analysis reveals the value of the property to be worth $300,000, 'as is'. You've spent considerable hours trying to honestly 'value' the property with a thorough comparative analysis of comparable homes in the area. The payoff on the home is $175,000. You offer to buy the home for $195,000 ( 65% of the 'as is' value) which they gladly accept.

And why not? Arranging the deal terms as such would pay off the 1 month owed on the mortgage, bring the foreclosure to a halt and give the distressed owners some dignity in the form of cash and an exit strategy. You've just given them a strategy to salvage a potentially devastating financial situation.

What do you do next? Do you keep the property and fix it up for possible sale or lease?

NO, you know an easier way - which you'll find out is 'assigning the contract' - so you decide NOT to keep the property.

You are currently holding something that is extremely valuable - the contract to purchase a property at a price way under market value. This is the basis for 'assigning ' the contract.

You decide to look for an investor to 'assign' the property. Seeing that the property is valued at $300,000 on the market, right now, do you think an investor that is too busy to do the required leg work of sourcing and structuring the deal, as you did with the distressed homeowner would pay $195,000 for the right to own a $300,000 property? You bet, and within a short period of time investor cash will be flying at you.

Of course, the final purchaserthat ends up buying your contract will pay $195,000 plus your fee, which you must decide on. Say you charge 6% as your finders fee - you just made $11,700 for only a few hours work!

This translates into a pretty good hourly rate, definitely worth your time.

Why not learn the lucrative art of 'assigning' foreclosure deals? It's a great way, even for those that are not risk takers, to enter the world of foreclosure investing WITHOUT SPENDING ANY OF YOUR OWN CASH.

You can visit the link below for details and how to get started.