Before You Start Wholesaling

I get a lot of my blog topics from questions people ask on the forums. I see a lot of people jumping into wholesaling and then have no idea what to do or ask when they start getting calls. I get it's exciting and you're motivated and want to dive into wholesaling with both feet, but here are a few things you might want to have in place before you send out your first direct mail campaign or before you put up your first bandit sign. First, find out if it's legal in your state and then read the below.

A List Of Questions:
This is the easiest one I think. Write down on a pad of paper that you carry around with you a list of questions you want to ask when the call comes in. It's amazing how much you forget in your nervous excitement and wish you would have asked when you were on the call. And it is very unprofessional to call back with a, "Hey I forgot to ask you a few things." Search the forums and you'll find questions wholesalers ask their callers. There's also a podcast with Danny Johnson where he goes over what he asks potential home sellers. You can find it here.

Have Your Contract Ready:
You have a motivated seller and he's agreed to you price over the phone. Before you hang up you tell him you'll send over a contract right away. But what contract? Is now the time to post on BP what wholesale contract to use? You should already know what contract you'll be using and how to fill it out. In Texas, I use the standard ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE) from the Texas Real Estate Commission. It's the contract the real state agent will use to put a house under contract. I found a video on YouTube on how to fill it out and I made sure that I had in the Special Provisions section: Buyer to close in entity of choice. And trust me, if there are any mistakes on the contract, the title company will let you know and you'll have to make changes. Which brings me to the third thing you should have...

Title Company
This is very important and you should have this decided well in advance before you start wholesaling. The reason I say this is because it could take days or weeks to research and it's not something you want to wait until you have a house under contract to decide on. There are not a lot of title companies that will do contract assignments. And even with a double close, there are things you should know. Some title companies will only do a double close if you can buy the property first. Meaning, you'll need transactional funding to make it happen. You'll need someone to short term fund the first deal (buying the house) before you can sell it to your final investor. The transactional funding is only for 30 minutes or so, but they might require it. All of this should be known well in advance before closing.