Option Question Acquisition Fee

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  • Hello,

    I do have a question about options. My goal is to target apartment sellers who will do seller financing.

    I want to get an option on the apartment buildings and then assign my option to a cash investor.

    My question is how much of an assignment fee would be the norm?

    Would it be between 1-3% of total purchase price of property?

    Than you kindly,

    -KB

    HI Kenneth

    You should not charge a % of the price of the option for an assignment. it should be a flat fee. The fee would depend on the deal you negotiated

    Just like wholesaling, it is better to start with a BUYERS list first, then start looking for sellers. When you’re building your buyers list, you need to ask what they are looking for, how many units, what down payment do they have to work with, do they want turn key or fixer uppers, which part of town, etc etc.

    Some of these might be subject to the mortgage deals too. You will want to see the mortgage documents so you know exactly what your buyers are getting in to. If there a fixed interest rate or does it adjust often? If there a balloon?

    Once you know what your buyers want, then you can start filling orders!

    Why target only apartment sellers? There would be many more buyers for single family homes!

    Hi Jackie,

    Than you for the thorough answer, that makes perfect sense.

    I will look at SFH as well. You’ve always been so helpful. I really appreciate it.

    Best Regards,

    -KB

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