Los Angeles, CA · Member since 2010 · 112 posts · 2 votes
First, is this possible? I find a seller and have a buyer to make a quick flip. I buy the property in my name and quickly sell it to the buyer. Do I have to have the property in my name first?
Second, what's all this buyer list for? How do you profit from that?
Are there any laws or regulations with this transaction?
Having been reading and educating myself, I see double closings and wholesaling are strategies used depending on the monetary amount situation.
Wholesaling is the act of taking control (and perhaps brief ownership) of a property and then passing (or reselling) that property to someone else.
Double-closing is just a method of executing on a wholesale deal. Other methods include assignment of the contract, simultaneous closing, purchasing in an entity (land trust, LLC) and transferring ownership of the entity, etc.
I just don't want you to think that a double close is an alternative to wholesaling...it's not. It's just a method of wholesaling.
If I'm going to sell it for retail profiting big, I double close.
Keep in mind that a retail sale often involves a buyer who is purchasing the property with financing. If that's the case, there are a couple things you need to be concerned with:
- The lender will likely require an appraisal, and if an appraiser sees that you purchased a property this week for much less than you're selling it for this week, you may have difficulty getting the appraisal to come in at the retail sale price;
- The lender may have title seasoning requirements, whereby they don't want to lend on a property if you haven't had ownership of it for some minimum period of time (generally 90-180 days).
Consider that assigning the contract might be a better way of earning your fee on this type of transaction, as the lender roadblocks should go away.
Wholesaling involves selling to other investors, mostly when I'm going for lower profits.
Wholesaling can be to another investor or to a retail buyer. They are both wholesaling.
What you're talking about doing is called wholesaling and it happens every day of the year. Read the wholesaling forum for lots of info but basically you find a seller and put the house under an option contract for a certain dollar amount. You then assign that contract to someone else for a higher dollar amount. You keep the difference. You could put the house in your name but I don't see any reason to do that in this situation. It just adds cost and time.
Now your buyers list is where you find your buyer. You have to contact others to see what kind of houses and where they are buying.
Like I said take a few hours and read everything you can in the wholesaling forum. Everything will start to come together.
What you're talking about doing is called wholesaling and it happens every day of the year. Read the wholesaling forum for lots of info but basically you find a seller and put the house under an option contract for a certain dollar amount. You then assign that contract to someone else for a higher dollar amount. You keep the difference. You could put the house in your name but I don't see any reason to do that in this situation. It just adds cost and time.
Now your buyers list is where you find your buyer. You have to contact others to see what kind of houses and where they are buying.
Like I said take a few hours and read everything you can in the wholesaling forum. Everything will start to come together.
Chris, now that I've been here for two weeks and learning. My thinking was more towards double closing. Buy the property using the end buyer's money and profit from the difference of my mark up. But, you introduced me to the exciting world of wholesaling.
Having been reading and educating myself, I see double closings and wholesaling are strategies used depending on the monetary amount situation.
If I'm going to sell it for retail profiting big, I double close. Wholesaling involves selling to other investors, mostly when I'm going for lower profits.
I'm starting to sound like I'm know what I'm talking about. Ha!
Having been reading and educating myself, I see double closings and wholesaling are strategies used depending on the monetary amount situation.
Wholesaling is the act of taking control (and perhaps brief ownership) of a property and then passing (or reselling) that property to someone else.
Double-closing is just a method of executing on a wholesale deal. Other methods include assignment of the contract, simultaneous closing, purchasing in an entity (land trust, LLC) and transferring ownership of the entity, etc.
I just don't want you to think that a double close is an alternative to wholesaling...it's not. It's just a method of wholesaling.
If I'm going to sell it for retail profiting big, I double close.
Keep in mind that a retail sale often involves a buyer who is purchasing the property with financing. If that's the case, there are a couple things you need to be concerned with:
- The lender will likely require an appraisal, and if an appraiser sees that you purchased a property this week for much less than you're selling it for this week, you may have difficulty getting the appraisal to come in at the retail sale price;
- The lender may have title seasoning requirements, whereby they don't want to lend on a property if you haven't had ownership of it for some minimum period of time (generally 90-180 days).
Consider that assigning the contract might be a better way of earning your fee on this type of transaction, as the lender roadblocks should go away.
Wholesaling involves selling to other investors, mostly when I'm going for lower profits.
Wholesaling can be to another investor or to a retail buyer. They are both wholesaling.