Investing in Real Estate 2 - Assignments
What this investment is: An investor who is interested in Assignments gets a property under contract for an attractive price then assigns the contract to another buyer, usually another investor. The first investor will be paid a fee for the work. If you don't have much equity to work with, and/or if your credit power is limited, assignments can be a way to get started in real estate investing. You will need to have a strong "sales" personality to succeed at it, though.
Equity needed: None, just earnest money.
Importance of credit: Not important, since you are not purchasing the property yourself.
Importance of experience with contractors: Not important. The person that you ‘flip' the property to will be doing the work.
Important of experience with property managers: Not important. The person purchasing the property from you will be managing the tenants.
The next few blog articles explore related topics, such as rentals, fix and flips, and new construction. Next week, we'll continue to explore assignments in more detail!