How we transfer our contract rights to buyers and make our profit.
An assignment is the legal transfer of your contract rights to purchase a property to another buyer. You're not selling the property—you're selling your right to buy the property.
Think of it like having a reservation at a sold-out restaurant. The reservation itself has value—you can transfer it to someone else for a fee.
Sign a purchase agreement with the seller at your negotiated price (let's say $100,000)
Market the deal to cash buyers/investors who want the property at a higher price ($110,000)
Execute an Assignment of Contract, transferring your rights to the end buyer
At closing, you receive the difference ($10,000) as your assignment fee
Your Profit =
Buyer's Price - Your Contract Price
Your Contract
$100,000
Buyer Pays
$110,000
Your Fee
$10,000
Your buyer line should read: "[Your Name] and/or assigns"
This simple phrase gives you the legal right to assign the contract
Include: "Buyer may assign this contract to a third party without consent of seller"
Some contracts prohibit assignment—always check!
Include a 10-14 day inspection contingency
This gives you time to find a buyer and verify property condition
$5K
Entry-Level
Low-price landlord deals
$10K
Our Target
Average deal
$15-25K
Good Deal
Higher-end flips
$30K+
Home Run
Premium properties
Large Fee Deals: If your fee is $30K+, use a double close instead—sellers and buyers may object to large visible fees
Bank-Owned (REO): Most REO contracts prohibit assignment
Financed Buyers: Lenders won't finance an assignment—buyer must pay cash
Sensitive Sellers: If seller seems uncomfortable with investor language
Collect a non-refundable earnest money deposit from your buyer ($2,000-5,000) to ensure they're serious
Use the same title company for both contracts—they'll coordinate everything
Your assignment fee is visible on the HUD—buyer and seller can see it
Always have a backup buyer in case your primary falls through
Assignment is the simplest exit strategy—you never actually buy the property. Always include "and/or assigns" in your contract, collect earnest money from your buyer, and use a double close instead when your fee exceeds $25K or when working with REOs.