BiggerPockets

As I mentioned before I have under contract a 3 bed 1 bath home. I am paying $31k.

My plan was to fix and flip the property. Getting into flipping and doing the work is my ultimate goal. I want to build up to 4 to 5 per year.

This house is a good one to start with.

However after reading about wholesaling on BP. I posted an ad of CL listing the house for $55. Outlining teh repairs needed.

I had a guy go by amd look at the house. He has offered me $48.

I will negoatiate to get higher.

My questions pertain to(if i deside) to sell it to him. How to go back to my seller and work out the deal. My deal is done and they are working on closing.

How do I go back to my seller?
How do I handle closing so that I dont have to close on it first?
I would like my buyer to buy the house from my seller and I get a check for the differance, how do I do this?

Should I do this? If I want to be a rehabber why do this? The only reason I see is it will load my pocket to help pay for flipping another house

Ideas? Thoughts?

anything

Thanks
JD

I think the buyer is an end user not an investor

i just dont want to pay closing cost twice. Plus I am using hard money. If I can avaiding having to use the
hard money I will have money on the points etc.

Why don't you just assign the contract?

Is this some sort of first time or low income program? What restrictions is the housing authority putting on you? You may have to treat this more or less like a REO. That is, you'll have to double close, maybe with transactional funds.

Is the end buyer getting a loan? Best if your end buyer is a cash buyer. Lenders get concerned when the seller (you) is not on title.

Sounds to me like you really need to look closely at the contract and see whether it truly not assignable. If it is not assignable, you need to see if there is a minimum amount of time you the city housing is saying you need to hold onto the property until you can re-sell it.

Unless the contract specifically states that it is NOT assignable, you will be able to assign it.

If you need to double close to get the deal done, so be it. You may even be able to find a title company that will do a wet closing (using your buyer's cash to fund your end of the deal). Title agents willing to do this are a rarity as of lately, but not impossible to find, especially if your buyer is using cash.

Good luck on the deal. Please report back let us know how it turns out.

edit: I just re-read through the posts... looks like you're already going to closing on your end... sucks to use hard money rather than just some transactional funding just to do a double closing, but if the numbers work for you and you make the amount of money out of the deal you're looking for, I say go for it.

Otherwise do the rehab like you wanted to do in the first place.

If you have the chance to make 13-15k in profit after expenses for what basically amounts to an assignment fee, I wouldn't screw around with trying to fix it up myself or negotiate your end buyer up any higher. You leave out what the ARV is on this so it's hard to tell how much of a deal your end buyer is getting. Assuming your end buyer has rehab/carry costs of 20k, and the house is worth 100k ARV, he'll be making the same net amount (roughly) that you are by flipping it to him, except you don't have the additional time or money invested.

Your scenario is why it's a good idea to use an LLC or Trust to purchase properties. You can assign ownership or beneficial interest in either one of those entities without running afoul of the assignment rules on the property unless there is language specifically prohibiting that as well. However, if I was your end buyer, I wouldn't be too thrilled with you taking such a big chunk of the equity for yourself.

You are just going to sell your LLC to your end buyer for the the amount of your choosing. $53K - $31K - Closing and carrying cost = the amount you sell your LLC to this investor guy for.

I don't know fine details of the how to do this, but that is a round about answer.

Hi Jason,

I've enjoyed reading your thread so far and this seems like a good deal. Just curious how this has worked out? Did you decide to wholesale it or fix and flip?

Thanks,

Tom