Buying on an assigned contract: what the desk allows

Many investor deals start with a wholesaler. You take an assignment of someone else's purchase contract and pay an assignment fee on top of the original price. We lend on these deals, within published limits.

The limits

• Fix & Flip, Stabilized Bridge and Ground-Up Construction: wholesale or assignment fees are permitted up to 20% of the original purchase price.
• Rental Loan (DSCR) and Rental Portfolio: wholesale or assignment fees are permitted up to 10% of the original purchase price. Above that is at lender discretion. Non-arm's-length transactions are not allowed.

The paperwork

On Fix & Flip, Stabilized Bridge and Ground-Up, the full chain of contracts is required. That means the original contract between the seller and the wholesaler, and every assignment from there to you. Double assignments are at lender discretion.

Before you sign (general advice)

• Get the original contract and the assignment from the wholesaler early.
• Check the fee against the limit for the program you plan to use.
• Plan to close in your LLC or corporation, since an LLC or corporation must hold title.
• Send the full chain with the scenario, so the desk can read the whole deal at once.

For wholesalers

Our brokers page is written for brokers and wholesalers. If you bring an investor's deal to the desk, you can submit on your client's behalf and stay on the deal.

Pricing is quoted per deal.

Program figures are indicative only and subject to complete documentation, underwriting, appraisal and final credit approval. This post is general information, not financial or legal advice.