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We Understood the Assignment. Understanding Real Estate Purchase Agreements.

We Understood the Assignment

In real estate there are many ways to make investments; whether you buy and hold for long-term returns or fix-and-flip for a fast return. Savvy investors know these creative solutions in how to see opportunities. One of these we’ll discuss today is the art of wholesaling a property, using a Real Estate Assignment.

What is a real estate assignment contract?

The Assignment of Real Estate Purchase and Sale agreement is the process of transferring a real estate contract from an original party to a new party, then collecting an assignment fee for your effort.

The original party, an Assignor, acts as a middleman or the contract flipper. The key in this investment strategy is that it occurs while the property is Under Contract and not yet purchased.

The Assignor finds a property and enters a real estate purchase agreement with the seller.

The benefit for an Assignor is that they put up little to no capital of their own. Be aware, some contracts are written prohibiting an assignment or are only allowed with the consent of the seller/owner.

Understanding the Real Estate Purchase Agreement

The key to this investment strategy is understanding that a purchase agreement is simply a document that gives one party the right to buy that property. If allowed by the contract terms, then the right to buy can be sold to another purchaser. This creates an opportunity for the original Assignor to sell at a higher price and make a profit, without ever taking actual possession of the property. The Assignor profits once the deal closes with the final purchaser.

Curious about what other investment strategies you’re missing out on?

J+ Group offers creative solutions from a team of knowledgeable experts to help you build an investment portfolio that aligns with your goals, asset type, and rate of returns. Reach out today and see how we can assist. Email jplusgroup@compass.com.

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