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Article by Doug Pretorius

CA 101: The Cooperative Assignment

  Would you like to know about a real estate investing technique that's simple to learn, works in all market conditions, costs next to nothing to use, and has virtually zero risk? Too good to be true? Here's the catch: You're not going to get rich off of one deal. Still interested?

  The Cooperative Assignment (CA for short) is gaining ground as the tool of choice for many full-time investors and at the same time is becoming recognized as a great way for beginners to get started.

  So what is it?

  A CA is where you take a Lease Option, Contract for Deed, or some other form of Owner Financing contract, write the terms to be attractive to both buyer and seller, and then market it and assign it to a buyer for an instant cash profit.

  A CA turns you into a consultant who uses their knowledge of terms and marketing to bring buyers and sellers together in a mutually-beneficial deal. It allows buyers to get into a house faster, cheaper and easier, and gives sellers the chance to move on with their lives while making extra money from the sale of their property.

  Things You Need:

  There are a few things you need to do a CA smoothly.

  1. 'Terms' paperwork. You can use a Lease and Option, a Contract for Deed, or any other paperwork you're familiar with.
  2. Yard signs and directional signs to draw attention to the house.
  3. Voicemail so you can describe the house and terms ONCE instead of 100 times to 100 different buyers.
  4. Website to showcase the house (recommended but optional).

  Things You DO NOT Need:

  For reference, and maybe a little inspiration, here's a list of things you DON'T need:

  1. Lots of money ($50 should do it)
  2. Good credit
  3. A job
  4. A real estate license
  5. Fix-up skills
  6. Repair estimate skills

  Now I bet you're curious what a CA looks like on paper, right? Here's one of mine so you can see how it worked out for everyone involved:

  After calling several FSBOs from the paper I came across Mr. C. S. who had a 3 bedroom, 1.5 bath, 1-car garage townhouse for sale for $142,900. He had already bought another house and needed this one sold or rented within 60 days.

  In 9 days I found a family eager to own their own home but needed some extra time to get their credit in shape to get a mortgage. 14 days later the deal was closed and I had my profit.

  The Seller:

  $149,900 sale price, $300/mo positive cash flow plus mortgage reduction and tax deductions, and pays no commission or closing costs.

  The Buyer:

  Got out of their basement apartment and into a move-in condition townhouse with all the trimmings without the hassle of dealing with the bank or a realtor.

  The Investor:

  For an investment of about $40 and 10 hours of my time, I made $4,750 cash profit in 3 weeks.

Doug Pretorius first became interested in real estate in 1996 and after a few false starts and hard-knocks began his investing career in earnest in 2000. Doug has mentored countless students all over the world to become full-time investors in their own right and continues to help beginners as time allows.
contact_email: pretor@rogers.com
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