I'm new to the forums but I've been doing research into wholesaling as a way to get started in real estate investing. It seems like there is a lot of conflicting info out there so I was hoping that someone here could clear things up for me.
I understand that if you don't want your seller to see the amount of your assignment fee you can do a blind HUD, but I was wondering if you have to close with the seller before you close with your buyer. I've heard that you can close with your buyer first but that seems kind of sketchy since I wouldn't actually own the house yet.
Also, why are title companies so leery to tell you what you can and can't do? I called one today to ask about the closing process and they just told me they don't like to do deals like that but she didn't say they wouldn't. She recommend that I speak to an attorney before doing anything but I don't have enough money to afford an attorney.
I really want to learn more about this so I can move on and start making offers. I'm in Houston, TX if that helps.
@Ross Rauschenbach - Do you currently have a deal you're ready to close on? If not, I'd make that my focus first. At this point worrying about how to do the closing is kinda like practicing your touchdown dance before you've made the team. ;) Once you get a deal lines up and you're ready to close, most wholesellers don't bother with a double-close unless the wholesale fee it really big. As far as the seller's thoughts go, if you're up-front with them and let them know from the beginning that you're getting the house under contract for $x with the intention of making a profit then it shouldn't be an issue; and your buyer won't give a flip (no pun intended) about how much you make as long as they're getting a good deal. So, like I said...go find some deals first...THEN you can worry about how to arrange the closing. Good luck!
I may be missing something here but if you have the house under contract, there's nothing sketchy about closing with the buyer first. I am by no means an attorney, but if the seller signed the contract the buyer should have no problems closing first.
The reps at the title company are not legal advisers and are most likely trying to avoid any liability in the issue.
I would recommend talking with the buyer(s) you have in mind and confirm. If they are fine with closing first then you're all set.
@Jim Viens I don't have a deal yet. I'm just trying to get as much information as possible before I start making offers to insure that when I do everything goes smoothly. I want to identify potential problems no so that I'll know how to handle them instead of having to figure it on the fly.
So do y'all have any tips for a guy just starting out? Things to watch out for, what can I do to make sure I'm ready to make my first deal, etc? I really appreciate any advice.
Another issue to consider is the funding source of your end buyer-they may have their own requirements as far as how the closings are done. Just have several Title Companies available to work with, that do work with investors. But do go get that deal, Good Luck
Hey Ross, don't let title company tell you what you can and can't do. If they don't wanna do a double closing, take your business somewhere else and i'm sure there is a title company out there that will be more than happy to help you out. Also, when you double close, the title company gets to make more from the double transaction. If the title company is backing away from the deal, it's their loss. I don't know any title company that won't do a double closing in Houston, TX. I can name like 5 title companies that will be more than happy to assist you with double closing.
Also, you should always close your property with your seller first to avoid your investors from going behind your back trying to get the property from you. You never really know who you are working with unless you know whoever you are working with for a long time and you can trust that he/she won't try to go behind your back to steal your deals.
Good Luck Ross...
Yes, practically all title co.s will do "double closing s", where the first "B" buyer has the funds to close, no problem. Title co.s won't do double closing s where the B buyer wants to use the C buyers funds, and you certainly can't sell to the end buyer, before closing on the initial purchase, unless to you want to go to jail along with the title agent.
In Houston, you can use the C buyer's fund for B buyer's property that's under contract. Been there and done it.
@Sonny Ngo Any disclosures/documents that C has to sign acknowledging this?
C knows it's a wholesale deal. That's all. C doesn't care as long as he is getting a good deal.
Could you send me the list of the 5 title companies in Houston that will do double closing? I also live in Houston.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing