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How To Assign Non Assignable Contracts?


In this episode, Larry and Kandas talked about assigning non-assignable contracts. In other words, how to not come up with the money to be able to wholesale a property. They also talked about where it can be applied and the different ways it can be done.


  • Updates from the hosts
  • Deal of the week
  • Assigning a non-assignable contract
  • Where it can be applied
  • - Bank-owned property
  • - HUD property
  • - VA-owned property
  • - Any property on MLS
  • Ways to do it
  • - Using a trust
  • - Using LLC
  • - Using a financial partner
  • - Having your buy-and-sell entity and buy-and-hold entity with similar names
  • Using transactional funding


  • "It's cheaper to the trust than LLC."
  • "It's all about negotiating."



Larry: Welcome to the show. The BRAG Radio TV show. I am Larry. This is Kandas.

Kandas: How are you doing?

Larry: What’s up! So, yes, this is our show about the BRAG, Be Rich And Generous.

Kandas: Using real estate to be rich and generous.

Larry: Using real estate to be rich and generous.

Kandas: It’s what we do.

Larry: That’s exactly right. We’re in the trenches doing deals everyday. Kandas has got back from turning power on a little house.

Kandas: Which we don’t usually do.

Larry: No. Tell them why.

Kandas: We don’t ever do this.

Larry: Tell them why you did it.

Kandas: The upside to this house is different than what some of our other typical wholesales are, so this is probably going to be more like a hotel deal and we need to clean it out. This house is full, so we’ve got to clean it out. I went out to be able to turn power and water on so that we can make the most of our time when we’re up there because we’re not going to be able to be up there everyday cleaning it out. I had to get everything squared away, went by, checked on the house too, and came back just in time for BRAG.

Larry: Just in time for the show.

Kandas: That’s right.

Larry: That’s awesome. That’s awesome.

Kandas: Still feeling a little bit under the weather. I’m sure you guys can hear it in my voice but I’m working on that too.

Larry: There you go. Let’s talk about the deal of the week.

Kandas: Alright. Which one do you like?

Larry: I don’t know. We’ve got 22 in our pipeline right now, 22 deals in our pipeline. I just looked at it a few minutes ago. But, we’ve got some deals that we’re selling right now. Let’s just pick one of the four we closed last week. One of the four we closed last week was a little rental property that we picked up for 3,000 dollars and we sold it for 15,000.

Kandas: Grand. Alright. So this 3,000 dollar property is tenant occupied right now for 275 a month. This was my deal. I went into this house. I was the AM on this one.

Larry: Acquisition manager.

Kandas: Yes. Took the pictures and everything like. We were able to sell it off the pictures. Pictures were so important. We went over that at our free day this past weekend. If you get enough pictures for you to tell the story to your potential buyer without either of you having to go back out there, it’s great. That’s the way we’re selling the majority of our houses now, right? I mean, the buyers have a lot of information upfront. They have pictures of everything that’s good, that’s bad, that’s ugly. It doesn’t matter. It is what it is, right? And it is going to be right for somebody. So don’t try to hide anything from anybody. If you can give them enough information upfront without either one of you having to go out, a lot of our buyers are appreciating that, that they get everything in photos. Let me see. Oh, so this one with the tenant occupied, you can leave the tenants in place, not do anything, collect 275 a month if you wanted to, or you could leave the tenant in place but go on and do some minor rehabs, maybe five grand worth of rehabs or whatever. Bump the rent up a little bit.

Larry: Right.

Kandas: Or, if the tenant wants to leave anyway, remodel the whole thing. Bring it up to like the current standards of the houses around it and then charge even more in rent with the new tenant. So, you got a couple of different options and our buyer has a couple of different options with that. It’s all how far it goes now.

Larry: That’s the play with this deal. This deal, the play is our buyer is going to buy in 15 and they’re going to leave the tenant in place, let the sleeping dog lay, right?

Kandas: They are not complaining.

Larry: Right. And then, if and when they move out, he will go in and spend three to five grand, raise the rent to probably 400 or 500 bucks a month. Right?

Kandas: Yes.

Larry: so there you have it. Sweet little deal. This was a deal actually I had under contract for 12,000 dollars and then I went in and renegotiated it down from 12, down to 3,000 dollars.

Kandas: And how are we able to do that? You’ve got to have a viable reason to be able to go in and renegotiate with that stuff, right? So the seller doesn’t live here. He hadn’t been to the property. He was relying on other people to tell him the condition and different things like that. Well, we were able to prove to him or send him photos that I took when I was out there justifying a reduction or justifying a renegotiation based, you know, from what he told us initially to what was actually happening.

Larry: Right. Right. That’s absolutely true.

Kandas: You’ve got to be ethical with the renegotiations.

Larry: That’s true. And I just told him, I said, you know, I just really can’t do anything with it at this price. You know, I am going to turn around and resell it. Unfortunately, I can’t do anything with it, so I renegotiated it down to 3,000 and we sold it for 15, so we made a little bit of money. He got it off the books and was done with it.

Kandas: Which is what he wanted. He wanted to be done paying taxes. He wanted to be done with calls from the tenant. Well, this tenant really wasn’t calling on anything but he’s done with just having to worry about a property that was so far away from where he lives. Problem solved. We made a little bit and our end buyer is in a great situation for a cash flow property.

Larry: That’s exactly right. Exactly right. Now, let’s talk about the topic today. The topic today is how to assign a non-assignable contract, right?

Kandas: Assign non-assignable.

Larry: Assign a non-assignable contract. In other words, how to not have to come up with the money to be able to wholesale a property? This would apply to a bank-owned property, a HUD property, a VA owned property, any property on the MLS, an auction property, whether it be own land or in-person auction, so any of those properties are typically not assignable. Okay?

Kandas: So, how you do it, Larry?

Larry: Well, there are multiple ways to do it. Okay? So there are multiple ways to do it. The first one I want to talk about is using a trust. You can use a trust, right? You create a trust. Let’s say you’re buying the property in the trust name of 125 Oak Street Trust. Okay? 125 Oak Street Trust. Then what you do is, your company or you are the beneficiary of the trust, so let’s say you’re buying it for 20,000. You find a buyer that’s going to pay you 40,000. So, what you do is, instead of selling the property, what you’re going to do is you’re going to sell the beneficial interest in the trust. It’s one real estate transaction and one personal property transaction. Okay? So you’re buying the property in the name 125 Oak Street Trust and then you’ll find the buyer that’s going to pay you the 40. They wire their money to closing. They use the money. You’re selling your beneficial interest in the trust for 20,000 dollars and then your buyer closes and pays the selling 20,000 dollars for the property. It’s how to assign a non-assignable contract. Now, the other thing you can do is you can do the same thing with an LLC. okay? You can create a new LLC, 125 Oak Street LLC.

Kandas: You like that address.

Larry: I use it all the time as an example, don’t I?

Kandas: I know. All the time.

Larry: I know. I used to use 125 Falls Avenue and that was actually a house that I bought over Lawndale, so anyway, I used to use that all the time. But anyway, so let’s say you create a new LLC, 125 Falls Avenue LLC.

Kandas: LLC.

Larry: Okay? LLC. and then you get the property under contract, then what you’ll do is you’d sell, you sell your membership interest or all of your membership interest in the LLC to your buyer for 20 grand and then they close on the transaction but it’s all done in one time. You don’t sell it ahead of time. It’s all done at one time. Okay? You don’t use an LLC that you’ve had for a while or you do with other stuff. You use a one-time only LLC for this property. Whatever they do with that, we’ll deal with it afterwards, is up to them. It’s cheaper to do a trust than an LLC. Okay? It’s cheaper to do the trust than an LLC. Alright.

So, the next way you can do it is...

Kandas: That was two. That was number two way.

Larry: Right, right. The next way you can do it is, you know how they don’t allow, you know, like your name and or assigns, like neighborhood housing group and/or assigns. What are you laughing at?

Kandas: Dean Seff right here through the door.

Larry: Oh, really? So, let’s say you’re using neighborhood housing group and/or assigns, that’s one of our companies, so you can’t put and/or assigns, but you could put, or partners, right? And then, you can say, well this is my partner that’s going to close on it and, you know, our financial partner is really the way you would do that, financial partners. So, you can change that a lot of times, not every time, nothing works 100% of the time, guys, but the vast majority of that time, they will allow you to change the name for your financial partner, okay? Because the financial partner means they got money and they got to close. Right?

Kandas: The money is all they’re worried about ultimately.

Larry: That’s exactly right. That’s exactly right. So the next thing I want to talk to you about is this is a really, really slick trick that you can use, okay? I shouldn’t say trick. It almost sounds devious or unethical.

Kandas: That sounds unethical.

Larry: But this is really a great strategy to use, okay? When you’re buying HUD or MLS or VA or Hubzu, or auction properties, okay?

Kandas: Strategy.

Larry: We have two companies. We have a company that we buy and hold and buy and sell.

Kandas: We have a lot more than that but these are two he’s talking about.

Larry: Right, right. We have a company we buy and hold and buy and sell. So, sometimes, we don’t know if we’re going to buy and hold or buy and sell but right now, we’re buying and selling most of everything, unless it’s in a tax advantage account. But for right now, what we do is, we have neighborhood housing group and neighborhood housing properties. Let’s say we get the property under contract with the name Neighborhood Housing Group, then what we do if we decide we’re going to put it in properties, we just call up the agent or the closing attorney or the seller or whoever, and we say, look there’s a typo on the contract. It is posted the correct name of the company is Neighborhood Housing Properties, LLC. Right now, it just says Neighborhood Housing Group. Okay?

Kandas: Right.

Larry: So, in their eyes, it’s a clerical issue, right? And they just make the correction, right? Now, how could you do that? How could you do that? Let’s say you have a company called B&R Remodelling LLC, okay? What you could do is if you want to assign a non-assignable contract and you find out later, maybe oh, I can’t do this, so what you do is you have your buyer create an entity, B&R Investments LLC, and then you just tell your seller, your realtor, your bank, whoever, there’s a typo on the contract. It needs to be changed, right? And then you change it to the new entity and your buyer’s doing it and you can either be POC, paid outside of closing, or you can be put on the HUD as a marketing fee or something like that. How about that? Is that great or what?

Kandas: It works as long as, like, the names are similar or are really close. I mean, it’s not like you could go from Neighborhood Housing Group to Sphero Family Properties and be a clerical error.

Larry: That is true. That is very very true. That’s why you want names that are similar. That’s why you should have your buy-sell entity and your buy and hold entity with similar names so you can have them correct the clerical error anytime you want to.

Kandas: Anytime.

Larry: Anytime you want to on the bank owned and HUDs and all like that stuff. Okay?

The last thing I want to talk about assigning a non-assignable contract, double closings, not a lot of attorneys or title companies let you do that anymore, so what you need is transactional funding. If you have my courses, you probably have our transactional funding directory, but there’s transactional lenders all over the country that will loan you the money for 24 or 48 hours to close and fund your deal and they’ll typically going to charge around a couple of points to do it, one to three points, probably 2,500 dollars minimum. But, I’m a firm believer. I would rather have a little bit of something than all of nothing, so, just pay it, get the deal closed, put some money in your pocket, put some money in the bank and then use that money on marketing for your next deal.

Kandas: Here’s something that I would think you guys want to keep in mind when you’re doing like, if you’re using transactional funding or whatever, on your contract where you’re selling it, make sure that you have a timeframe in there when your buyer has to have their money wired in. make sure their money has to be there a day ahead of yours, right? They won’t use that money to close, but if you will set your sell date for your buyer, that transaction date a day or two ahead of when you have to close it and make sure that they have their… not set the closing date, but set the timeframe for when their money has to be to your attorney. Ours is two days before closing or there’s a 500 dollar per day penalty. So, our buyer’s money comes into the attorney’s escrow account. We know that it’s there, then I can wire funds and I will do our closing first, then they’ll do their closing. In that way, I am not wiring money out for a deal that I might not be able to sell, right? That our buyer’s money is not in yet.

Larry: Great, great point. Great point. I’m glad you brought that up.

Kandas: You’re welcome.

Larry: I mean, it is right there in the contract. They have to have their money in the escrow account 48 hours, two business days, by five o’clock, 48 hours or 5 o’clock two business days prior to closing, ahead of the original scheduled closing date. Right?

Kandas: Right.

Larry: Now, this is something that you can also negotiate out as well.

Kandas: True.

Larry: For example, let’s say to run it over a little bit, you know, they couldn’t get it in in time but there’s something else they ask you to do, you know, clean out the house. Well, you know, listen. I can’t clean out the house and eliminate the 500 dollar. I’ll tell you what, I will forget the 500. You use that money to clean out the house yourself, right? Yes.

Kandas: Problem solved.

Larry: It’s all about negotiating. Right? So there you have it. What else can we share, Kandas?

Kandas: You actually did a webinar this morning, well not this morning, but at 12 today.

Larry: At noon.

Kandas: Yes, at 12 today.

Larry: Live deals.

Kandas: Yes, so if you guys were able to get on that but haven’t talked to anybody about that, make sure you give D or Ron a call, 877. Is it 877?

Larry: It’s 888.

Kandas: Yes, 888-212-6567. 888-212-6567. If you were able to watch the real estate day trading mastery, dealer view webinar today, give the guys a call if you have any questions about that material.

Larry: Yes. we’re going to post it on Facebook too I believe.

Kandas: The replay?

Larry: I believe we will post the replay on Facebook because it was nothing but, I think went over three or four of our deals that we close last week. That was it.

Kandas: Yes.

Larry: Just went over three or four deals. I showed you all the details, what we paid for, what we sold it for, our pipeline, pictures of the property, all the details and answered all the questions.

Kandas: That is day trading. The way that we operate our business, things that we do with our properties, day in day out, every week, the properties that we close, is real estate day trading. So, it just kind of give you a lot of in-the-trenches view of what the course teaches.

Larry: That’s what we do.

Kandas: Yes.

Larry: There you have it. So, please share this video if you enjoy it, if you like it, share it with others. If you want to get a free copy of our day trading book and HUD Homes Half Off, just call Zanobia. She is our outsourced virtual assistant from India that’s right down the hall.

Kandas: That’s inhouse.

Larry: She is right down the hall. She is virtually right now because I can’t see her, but she is about 30 feet away. So give Zanobia a call, 877-LarryGo.

Kandas: Yes. Like Larry said, the digital copies of HUD Homes Half Off, Getting Started in Real Estate Day Trading, and there are some links to our deeper training education, the Filthy Riches Model, the Wholesale Model, Asset Protection stuff in there. Let’s say, Entity Structuring, different stuff like that that’s in there. We changed it up so make sure you have a copy of the investor’s kit.

Larry: Awesome. Thanks so much for watching, guys. I really appreciate it. Thank you very much.

Kandas: See you next week.

Larry: Alright. Bye.