Buying an Assignment
Congratulations on being an ACTION TAKER! The following sections will show you the next steps to buy an assignment from us, as well as some important information regarding the way our process works. Please read all sections before contacting us.
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Liquid Funds - Ensure you have liquid funds available to pay the assignment fee. For example, cash in a bank account, credit card, or line of credit. Serious inquiries only please.
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Contact Us - Call us at (613) 860-8008, toll free at (866) 702-8008, or email us TODAY by filling out our web form and quoting the deal ID number to express your interest. Remember... Time is of the essence with assignment deals. To ensure you have sufficient time to perform due diligence, contact us as soon as possible before the conditions deadline (we recommend at least 5-10 days before the deadline).
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Inspection - You will have the opportunity to bring your own property inspector to look at the building, or you can do it yourself. If using an inspector, ensure they are available on the inspection date (contact us for scheduling details)
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Sign agreement and pay fee - If you want the deal, as soon as possible after the inspection, be prepared to sign the assignment agreement and pay a $500 non-refundable deposit with cash or certified funds. This ensures you've secured the deal.
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Financing - You will have time to obtain financing approval on the deal. However, we suggest you obtain pre-approval with a bank or mortgage broker to ensure no surprises when trying to close.
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Waiving conditions and closing - Once the deal has been assigned, you are responsible for waiving any and all conditions and closing on the deal. There are no assignment fee refunds if you fail to close.
- A $500 non refundable deposit is required to hold the deal upon signing the assignment contract. Balance of the assignment fee is due and payable within 1 business day of signing the assignment contract.
- Assignment buyer will have the opportunity to inspect the property before paying the assignment fee deposit or balance of assignment fee owing.
- Assignment fees are accepted in the form of cash, bank draft, money order, or wire transfer. Fees are not considered to be paid in full until deposited into our bank account (this includes cash).
- Once all funds have been confirmed deposited in our account, you will receive a copy of the original signed Agreement of Purchase and Sale, contact information for the realtor and seller's lawyer. The seller will be notified that the deal has been assigned to you. It is your responsibility to close on the deal.
- The assignment fee does not cover the cost of any initial deposit given to the seller, or any additional deposit amounts that may be required upon waiving conditions on the offer.
- Assignment fees are non-refundable except in the event that the property seller doesn't close the deal. In that scenario, the assignment fee is refundable to the investor, minus the deposit amount and any costs incurred by Spirepoint.
- After signing, the assignment buyer is fully responsible for all terms and conditions on the accepted offer to purchase, including, but not limited to, verifying income and expense information, arranging financing on the property, waiving conditions, etc. Neither Spirepoint nor any of its partners are liable for any non performance on the part of the assignment buyer or property seller.
Some investors notice that our analysis of assignment deals is different than our joint venture deals. There are many reasons for this, but the most obvious is that most MLS listings include only limited information, such as rental income, property taxes, insurance, etc. Adding anything else to the analysis is simply a guess and can vary drastically from property to property, and from investor to investor based on their management involvement and their risk tolerance.
In addition, some investors look for cash flow, while others for capital appreciation, and each investor analyzes a property differently for profit potential.
For example, with cash flow investors:
- some use Robert Allen or Russ Whitney techniques, and some use their own formulas
- they may want to do a good portion of the work themselves, thereby reducing overall property expenses (ie. lawn care, snow removal, minor repairs, management, etc.)
- they have direct control over expenses that can vary widely (ie. they negotiate a low rate contract for property management, a family member does lawn care/snow removal for a reduced rate, etc.)
- they may find a lender who doesn't need an appraisal and can give them reduced interest rates
- they may want a tax write-off, so they may consider a negative cash flow property with built in equity
- they may want to defer maintenance to future years for tax purposes (ie. wait a few extra years to replace the roof shingles)
- they may use an equity line of credit instead of cash to fund the deal. This dramatically boosts the ROI for net cash flow, mortgage paydown, and appreciation
All of these variables make it difficult to compare one property to another, as each investor is unique. We've broken it down to the basic numbers, leaving it up to the individual investor to analyze it to fit their own situation.
When buying one of our assignments, the most important thing for an investor is that they have done their own analysis
and are comfortable with the numbers. The
investor must be willing to take the risk, as they have
interpreted it, and move forward with the intention to make
a profit.