Mortgage Assignment Case Study – Quail Hollow

This was another one of our very first mortgage assignments and it’s where we started to learn how to close buyers.

The homeowner was listed with a realtor at the time he received our flyer so we had to pass the call off to our investor partner (we are licensed so we can’t talk to any buyers or sellers who are already represented). To add another obstacle, the seller only spoke spanish, so we had to hire an interpreter.

The seller only had 2 weeks left of his listing and he wasn’t keen on firing his realtor. So we decided to wait it out until the listing expired. Once the listing went off the market, we met with him and signed a contract to offer the home as a mortgage assignment.

The great thing about this deal is that the seller was still current on payments. The down side was that he had lost his job so it was getting harder and harder for him to keep on paying the mortgage every month. On top of it, he bought this home for his wife, who just left him, so he was sad to be there and he just wanted to get out.

So we started marketing the home. We had numerous buyers come through because the home was priced right at market value, had a low down payment and monthly payments were under $1000/mth. The problem was that all the buyers who came through the home said it was just too small.

We finally found a buyer who was self employed, had a girlfriend but no other family. This home couldn’t have been too small for him….except he said it was. You see, he had just seen a home the other day that was twice the size, and as a hard working business owner (he owned his own roofing company), he wanted to have a house he could be proud of when he came home after a long day’s work.

I let him bake for a little bit and then called him back and he agreed to come take a look at the property again. I knew this buyer was going to be the best fit for this house due to it’s size. So we went to the house again and started talking.

Yes the home was small…but here were the upsides
Owner finance homes are scarce…
You RARELY are offered an opportunity to buy a home at it’s loan value, especially such a low loan value (approx. $92,000)
You RARELY find a home where you get to take over the EXISTING loan payment with a great interest rate… (approx 6%)
You RARELY find monthly payments under $1000…
This home was being offered at a competitive price, not priced slightly above like most of the other homes…
This could simply be an investment for him that he could refi and rent out later (he had that investor mentality)…
This was plenty big enough for him and his girlfriend and he would not be extending his budget – it was an easy payment to maintain…

Once we really started looking at the big picture, he was ready to go. He pulled out his checkbook and we started signing paperwork.

This buyer took over a loan of $92,083.68
He paid all the closing costs $1818
He paid an assignment fee to my for $6,000

It’s now a year since that mortgage assignment has been done. The buyer ended up moving to Colorado but rented the house out while he is away. All payments are current and the buyer intends to either keep the home as an investment property or sell it when his balloon comes due.

The seller now lives in an apartment, his credit in good shape and he was able to avoid foreclosure. He also found a new job!

Buyer is happy, Seller is happy and my bank account is happy! Win-Win-Win