Altus, OK · Member since 2008 · 2k+ posts · 690 votes
17y
1.Do a double close
2.Form an LLC and then sell that LLC to your end buyer
3.Get it under contract along with your end buyer once your end buyer buys the property quit claim it.
Homeowner · taylorsville, NC · Member since 2008 · 145 posts · 3 votes
17y
dont get it,looks like the end buyer still bought the home from you in all 3 situations,please explain ,thought wholesaling was just assinging contract
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
When you buy a REO or a short sale, the selling bank will typically insert a "no assignments" clause in the contract. The three techniques Mr Investor listed are ways to do the same thing without doing an assignment.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
I pay all cash for REO's so I don't run into this problem so much, however, in commercial, I make many of my offers in my name the add "and/or an entity to be named later. This is not an assignment but simply using an entity to buy the property. If your end buyer is using debt leverage, that may be a problem getting funding on these types of deals. For cash deals, it is a no-brainer.
Real Estate Agent · Tampa, FL · Member since 2009 · 456 posts · 123 votes
17y
Originally posted by Mr_Investor:
1.Do a double close
2.Form an LLC and then sell that LLC to your end buyer
3.Get it under contract along with your end buyer once your end buyer buys the property quit claim it.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
YOu need to find a title company who does double closings and understands them. It is essentially to escrows, one for your A-B transaction, where A is the bank and B is you. Then a second escrow is for your B-C transaction where B is still you and C is your end buyer. On settlement day, you have your funds from your end buyer C used to pay off the A-B transaction, then shortly after, your B-C tyransaction is closed and you keep the difference (yoour profit). THis is a strategy used to cirumvent the "no assignment" of contract clause that banks have these days.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
In a perfect world, YES.
Unfortunantley it odes not work out that way. YOur end buyers lender may not allow the double close method and thus you are stuck.
If your end buyer is FHA, good luck, at least today.
Also, since you can not assign a contract on bank owned properties or short sales (most banks disallow this), then you must either come with cash to close, double close (if your end buyer is all cash or lender approved), or close with your own financing, then re-sell.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
17y
Matthew, Unclear, is the property in foreclosure or is it now a REO?
#1-I have done many double closings but prefer not to due to the extra costs and being in the chain of title if even for a minute, but it is a way to conceal your profit amounts from the owner who will think you screwed him when he bought from you , and a buyer who will think you screwed him.when he bought from you.
#2-I like land trusts and LLC's to do the same concealing thing without the extra costs. But as stated new financing is much more difficult if that is part of the equation.
#3-Suggest if you going to do number three you write it up as "Brian P, et al. vesting to be determined in escrow". as the buyer, if doing a short sale or REO.and if you don't have the end buyer yet because it avoids the assign word but does the same thing,
Real Estate Investor · Northern Territory · Member since 2009 · 136 posts · 10 votes
17y
what does the "et al." mean? So basically if i found a home that is in preforeclosure (shortsale) or REO (bank owned) and say to keep it easy, a home i can get for $65,000 under contract and put where my name goes
"Dwight Droze, et al. vesting to be determined in escrow" then say they agree to a Close in 30 days after "inspections" etc. then i can put their name there (3rd person who buys) there later instead of my name and have another agreement with him on seperate paper for a Fee of say $5000?
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
17y
Originally posted by nationwidepi:
On settlement day, you have your funds from your end buyer C used to pay off the A-B transaction, then shortly after, your B-C tyransaction is closed and you keep the difference (yoour profit).
Just for completeness sake, some people will refer to the above as a simultaneous close (when the end-buyer funds the A-B transaction), and will refer to a double close to mean when you fund the A-B transaction and the end-buyer then funds the B-C transaction, at which point you get both your money back from the A-B transaction and your profit.
Only brought up this point because many title companies these days won't allow a simultaneous close but will allow a double close (i.e., you must bring cash to the table, even if only for a few minutes).
Real Estate Investor · CT · Member since 2008 · 119 posts · 6 votes
17y
- Find a great deal.
- Put in an offer around 80-90% asking price (negotiate up to 90%).
- Put 5% down, Cash offer.
- Call your cash buyers and get a contract signed
- Double close.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Pay up to 90% ask price?
How can that possibly be a deal on an REO?
You resell costs will be at least 7%, and unless these 90% of ask price properties cash flow, how do you profit at those figures?
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
17y
Though I hate to do it, I have to agree with Will here. :D
Asking price should never factor into what your offer is. Crunch your numbers off of After Repaired Value (ARV) and/or rent value and then work down from their for your initial offer.
And I've got to laugh with Sean here, too.
Originally posted by nationwidepi:
First step is to take off your caps locked key. Posting in all caps is like yelling.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
I don't get it Ryan. Why is it you would hate to agree with me? You seem to enjoy busting my chops in several posts and I can't figure out why. A difference in words here and a difference there and you jump all over me. What gives?!? :lol:
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
17y
I was being facetious. I don't really care if I agree with you or not. What I do care about is if what you are saying is accurate or not.
The times that I've jumped all over you about a difference in words is when those words can make a big difference in someone's perception of key principles to this business.
Either way to be fair, I think I have become overly inclined to zealously busting your chops. I will work on that. Not that I won't be there in a moment's notice to bust any chops necessary, but I'll work on using a less impassioned approach.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Originally posted by Ryan Weber:
What I do care about is if what you are saying is accurate or not.
Oh no, the accuracy police!
Fisrst of all, the times you have recently chosen to bust my balls has been on opinions of mine that I have made. They were not quoted factual references in which they coulb be right or wrong. Who are you to say my opinions are acurate! I made no factual statements or referenced any laws, regulations, etc I simply stated my opinion on a few topics. If you have a different opinion, state it, don't falsly claim I am inaccurate.
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
17y
I'm not sure where you're going with that.
Are you saying that opinions can't be proven true or false?
If someone's opinion is not based on reality then we as humans say its wrong or false. The opinion doesn't have to be based on a law or regulation to be true or false. If what you are saying is not true then you are wrong, whether its an opinion or a fact that you are communicating.
That seems like a very petty attempt to side step taking responsibility for being wrong.
And who I am to question your erroneous opinions? Well in reference to wholesaling, I am merely someone who has more knowledge and experience with it than you.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
No that is not what I am saying. I am saying that in the case of the opinion in question, it was only my considered opinion that wholesaling REO's for newbies "may" not be the best course of first action and that is all. That is my opinion, however erroneous YOU think it may be.
I am sidestepping NOTHING. It is my considered opinion and you or anyone else can not prove it is wrong regardless of your experience.
Ego stroke - Congratulations Ryan, that is a huge accomplishment.
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
17y
When a new investor is looking at wholesaling, one of the biggest issues to consider is your marketing budget. Overhead kills companies, and if you don't have much capital to start then you will need to focus on inexpensive ways to find deals.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
A valid point Ryan but there are two side to the process, finding deals, and finding buyers. By using REO's the newbie may reduce/eliminate a marketing budget, but they still need to find buyers, particularly with REO's as we have discussed previously.
What would you suggest a newbie do to find buyers for REO's on a limited marketing budget?