Wholesale question?

Question

Hi everyone.  I am new to this website, and new to real estate investing.  I am looking to build some capital by doing some wholesale deals, and I totally understand the process and concept of what a wholesale is... almost.

My question is, once you sign a sales contract, what happens if you cannot find an investor to buy the contract from you?  Is this where the risk comes in?  Is there a clause or something that you can write into the contract to help protect yourself against being forced to purchase the property if you cannot find an investor to buy the contract?

Thank you for the help, I appreciate it!

Curt Davis · Answer

Are you buying from the bank or a private owner?

If you try to lock up a bank REO you will need proof of funds and a minimum of $1,000 in earnest money that is non refundable.

Being able to buy from the bank is usually what separates the big leagues from the minor's.

Iman Yusef-Yahya · Answer

Have you compiled a list of buyers?

If so, if you buy at the right price, you really shouldn't have a difficult time getting buyers, if it really is a deal.

As far as your purchase agreements go, having a financial contingency clause in place stating that the offer is contingent upon you (the buyer) securing financing from xyz lender should be suffice.

What that does is it lets the seller know upfront that you will purchase based on you securing financing and that your not hiding anything.

You really do want to go into each deal with the intention of closing it.

*Disclaimer*: I am NOT an attorney - this is just my practice - seek the advice of a real estate attorney to explore this further.

James Harkness · Answer

Iman - Thank you for the advice.  I appreciate it, and I definitely have the intention of closing all deals that I get involved with.

Curt - I am looking to buy both from private owners and from banks.  I work for a lender right now, and it surprises me to see what they sell the REO's for.  I am really starting from scratch here, so I will likely start by doing private deals.  Thank you for the advice as well.