BiggerPockets

Hello. Everybody. I have built a list of buyers that are hot! I am a wholesaler. My intent is not to purchase the property, but to assign it to my end buyer. I dont have my own proof of funds or LOI. or earnest money deposit to tie the property up to market it to my end buyer. I do have, however an option agreement. Am I missing a piece to this puzzle? Lets say that I want to campaign a property to my buyers list. Can some one tell me what is going to be my strategy so the end buyer doesn't go around me. Are most investors that have the property under contract direct with the seller willing to use an option agreement from another wholesaler? How does the non-refundable earnest money apply to me directly? Maybe I have the answer's. Just need to be sure.

Thanks

Hi, I do not disagree with Don, that is good advice and all true, but just to drill a little deeper, you don't need to have an earnesat money deposit, but what you will need is an Option Fee or consideration to enter into the Option Agreement. I also don't like the idea of people having an option and advertising property as if they own it. Your Option Agreement should be structured so that it can be filed for public record or a Notice of Option tha can be filed. This is what keeps the seller from going behind your back and selling on their own. (Notwithstanding an Open Option or a Flex Option as they are called)

SO long as you buyer knows he is buying an option to purchase that will be assigned to him with an option fee being paid to you, everything is cool.

If your option is properly made, you can simply assign the option to the buyer and you have your hand out when you make the assignment for your fee. You can also use a sale contract and assign the contract.

As Don pointed out, this requires extensive experience and knowledge to clearly explain your position to both parties, a seller, who will be difficult to go along with such a deal unless there are some motivating factors, and to the buyer, knowing he could have bought it for less if he had contacted the seller before you. So, to a buyer, you'll need to stress that it doesn't matter what you got it for, it's what the place is worth to them at the time that will secure the deal for the buyer.

I suggest before you do any birddoging or attempting to facilitate a real estate transaction between a buyer and a seller that you check state law very carefully as to who is required to have a real estate license! If you have an interest in the deal, you can sell your interest, you're not to sell a house for the seller. And it's not your house (yet)to sell.

As Don said, read all you can find, not guru bokks, but forum posts from people who have been there and done that, having knowledge of the transactions you're interested in doing. Good Luck, Bill.

I used to sign Flex Option Agreements all the time. Now I refuse, the only people I know that have ever asked for those are typically right out of a boot camp.

To tie up a bank owned property you will need some money.

If you network with some local wholesalers, they will typically allow you to add your fee on top, that might be the best place to start.