Assignments in Canada
A career as a full-time Canadian real estate investor is very interesting and fulfilling. There are many triumphs and challenges one faces on a regular basis. For some investors who are just “flippers”, the time between triumphs can be long and arduous. Quite often the flipper can become almost broke as they are waiting for a property to be completed and sold before they get their money.
One of the challenges then is keeping money flowing in regularly so you are not in a feast or famine situation. So creating both massive and passive income is the key to success as a full-time Canadian real estate investor.
How can I keep the money flowing?
To create massive and passive income, one must have multiple streams of income coming in on a regular basis. One of the best ways of having money coming to you on a regular basis is the assignment.
What do you mean an assignment?
An assignment is, in effect, a process of transferring rights and obligations of a purchase contract that you have “tied up” with a seller/vendor to someone else, be that another investor or an end buyer who closes with that seller/vendor and pays you handsomely for that service.
The great thing about this strategy is, you can do this as many times as you’d like with as many properties as you’d like, and no one will ever check your credit, no one will ask for a letter of employment, a pay-stub, a tax return or any security of any kind.
This process is not very complicated, yet must be done carefully to ensure that you to get paid and also remain in a position of having no liability.
As a real estate investor, if you have built an entourage of experts around you, you should have properties coming to your attention on a regular basis. These property alerts should be coming from realtors, both residential and commercial, builders who are looking to get rid of large amounts of unsold inventory, and calls from panic sellers who are calling you to get you to purchase their properties at a large discount.
I found a property! But now what?
Once you have decided that a property is worth making an offer on, then you submit your standard offer. This offer must have certain clauses contained within it allowing you a certain time for due diligence, a clause that allows you to view the property as many times as you’d like during that due diligence period, providing you give the owner at least 24 hours notice, and finally, a clause that allows you to assign the rights and obligations of that contract, thus your liability, to another person, persons, corporation or a corporation yet to be named.
More on the power of Assignments in Canada in a future article.
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