LandInvestors.com Forums **Ask A Question** Buying/Selling using option contracts, assignment, etc.

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  • #29252
    Andy
    Participant
    Post count: 25

    Hey all,

    Does anyone here have experience flipping properties using option contracts, assignment, or something similar? I see people doing this online, and I understand how the process works, but I’m a bit unclear on the legality and how these folks are actually going about it. One lady seems to just send mail, get a signed purchase agreement, list the property without purchasing it first, and then do a double closing through title once she finds a buyer. That seems maybe slightly illegal to me? I spoke to my lawyer and he also seemed to agree that listing properties that I don’t hold title to can be a bit of a legal gray area.

    Anyone here have a process of doing this that works for them, or any tips on how to send mail and do this within legal bounds?

    Thanks!

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  • Rob
    Participant
    Post count: 21

    I have done these before.I typically have title search done, and tie the property up with an option. When selling, I disclose that I dont yet hold the title. Regarding the double close, if you close with an attorney/title, most of them require that you deliver funds for your ‘purchase’ or they will require the end-buyer sign a disclosure stating that you are using their money to essentially fund your purchase. I never wanted to get into those weeds so we always delivered funds for the initial purchase.

    Kevin Farrell
    Moderator
    Post count: 2142

    Andy – When you do an assignment you don’t sell the property (which you don’t own), you sell the contract. The option is a little bit different but you have equitable title meaning that the seller has agreed to accept the offer that you are able to get for then purchase. You need a different attorney if yours could not explain this to you. You need an attorney who knows the structure of real estate deals. However, IMO it is best to fund your purchases and then sell land that you own. Good luck.

    Kevin Farrell - Moderator
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    Schedule a 60 minute call - https://calendly.com/kevin-629

    Luke Mitchell
    Participant
    Post count: 44

    Totally agree with Kevin on this subject. If a deal is worth doing, its worth funding it. And that won’t be an issue if you have done proper due diligence and an experienced funder is involved. Best of luck to you!

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