If you are starting out as a Real Estate investor, you want to know how to assign a real estate contract.

Every day you see the commercial and advertising telling you how you can buy real estate with no money down! Is it true, can you really make money in real estate that easily. YES!

Some real estate investors buy a property, rehab and renovate and then sell for a profit. This requires a lot of work.

There are house finders also known as wholesalers, flippers or bird dogs that find good deals, get the property tied up and under contract, and then find and assign the contract to the actual buyer for a fee. This process is known as assigning a contract, and requires little if any money at all.

Here is how it's done;

Find a property that is under valued

Whatever your method, find a property that is under valued. In order to flip or assingning your real estate contract you will need a property that another investor will be interested in buying. Therefore the property should have enough equity or profit for the investor to pay you a contract assignment fee.

Make an offer

Write an all cash offer to purchase the property and have the seller sign the real estate purchase contract. Once all parties have signed, take it to a title company or real estate attorney so that they can get it ready to close by doing a title search, ordering a survey and estoppel for the home owner's association. Make sure you use a closing agency that is familiar with assignment of contract, and let them know up front that this contract will be assigned to another buyer.

The offer you are writing should have the buyer's name followed by "and or assigns".

This purchase offer should also retain the right to inspect and reinspect the property prior to closing, giving the seller at least a 30 minute notice before any inspections. This allows you to let other investors come and see the property to make a buying decision.

Make sure to either get the seller to put a lock box on the door or give you a key to the property to help facilitate entry if they are not home.

Escape Clause

Write in an escape clause in special provisions section of the contract, that will allow you to terminate the contract at no fault if you are unable to find another buyer. An escape clause could be as simple as "the offer is subject to my partner's approval." You will need this if you cannot assign the contract to another investor and you are not interested or able to purchase the property.

Find a Buyer

Find a buyer who wants to buy the property. Have them execute an assignment of contract with you, effectively taking over your position (as buyer) to perform on the contract based on the terms and conditions set forth in the contract.

It is best that if this buyer is a cash buyer, avoiding financing contingencies. If your buyer is a cash buyer, there should be no problems with closing the deal. If the buyer is going to finance the property or get a hard money loan, make sure they have enough cash to pay you your assignment fee along with recovering your escrow deposit if any was required on the original contract.

Once you have found a buyer, write an assignment of contract contract with them. Present this contract to your closing agent, along with any information they will need on the new buyer.

Have this buyer deposit enough money in escrow (earnest money) so that you can withdraw your escrow deposit (if any) and cover your assignment fee. This way at closing those funds are dispersed directly to you.

Closing the deal

At closing the buyer purchases the property directly from the seller and you collect your assignment fee. This fee is typically $1000-$5000, but can be anything that is mutually agreed upon.

Also, have the new buyer reimburse you for any earnest money that had been deposited. Hopefully there was none required on the original contract.