Posted by SCook85 on December 06, 1998 at 22:43:20:
Flips are easy transactions to pull off but you must educate yourself of the entire process. A simultaneous close does not protect you from buying the home. You need clauses within your contract such as a financing contingency to get you off the hook. Simultaneous closes and assignments are the 2 types of ways that you can do a flip at the table. I personally and anyone one else who has done them I’m sure will say that an assignment is the best way to go. It saves you money for closing. In the event of a simultaneous close, there are 2 closings that take place. An assignment involves only one close in which you get paid an assignment fee. There are a couple of reasons why someone would do a simultaneous close as opposed to an assignment. 1) to hide the amount of profit that you are making on the deal. A buyer never has to know what you paid for a home and how much you are making if you do a simultaneous close. and 2) some lenders will now do transactions that involve an assignment (many of them won’t do a simultaneous close either) they want the seller of the property to have title. They also scrutinize the settlement sheet and want to know why someone is making $xxxx for assigning the contract. Keep reading this site and you will learn most everything you need to know about flips.
SCook85