So my husband and I are just getting started in REI. Our initial goal was to fix and flip and long term it still is. I have good credit, but my husband, not so much. He's got the income and I'm a stay at home mom who was looking for something that I would enjoy doing and could make more than just $10/Hr... because after daycare and gas expenses, it's pretty much not worth the time away from my kids and doesn't even come close to equally contributing to my husbands income as an Industrial Electrician. A few problems we've run into so far are the fact that our dept to income ratios are a little too high right now and he's got the income with bad credit and I've got the good credit with no income which = No Gap funding... We have a private investor, but that's a no go without the gap funding... So we've decided to start smaller. So far I think we've done well with networking. We actually had found our first deal but since we couldn't get the funding for ourselves, we started looking at other options. I know wholesaling is an option, but I'm not sure how to do the paperwork and do it legally in the state of Texas and from what I've heard, Texas is picky on the forms used. So we got in contact with someone who is willing to pay an assignment fee of $500 for the deal, assuming he is able to find another buyer to wholesale too. This investor already has a buyers list though so he should have a lot more success at finding a buyer than we would. I also figured we could learn from him in this process, how to do wholesaling and the paperwork. Also, these investors seem to willingly give info on the "hot areas" and other useful information when you mention "bird dogging" to them so seems like a win-win situation? So this investor has sent the contract over. However, I thought that assigning contracts in Texas was not allowed anymore without showing proof of funds to be able to purchase the deal myself before being able to "flip" to the next buyer? Or am I misunderstand the circumstances in which this is allowed or not and how its done? Just wanting to get some opinions on what we are thinking of doing? Is this fair for all or are we missing a better option? I'm very excited about this business, but I'm trying my best to learn from others mistakes instead of my own... any advice for beginners is welcome. Thanks so much...
Assigning a contract in perfectly legal (as long as the contract doesn't prohibit assignments) but it must be done right and carefully. Remember, when you assign a contract to a third party you're still responsible to perform under the contract you signed unless the contract specifically states otherwise.
You should continue to network at every chance. If you find a deal (a true investment grade property), you won't have a problem finding someone to partner with you on it. If you can't, it's because you haven't networked with enough active investors or what you think is a deal is actually a dud.
You have a lot to learn and learning must take place every day. If you treat this as a hobby, that is exactly the results you'll get. Treat it like a business and you increase your chances of success. If investing were easy, everyone would be doing it and having success rather than just everyone doing it.
Thank you for the response. I'm definitely putting my full attention to this. My husband works and I stay at home so this will be my "job". I'm working on things from the time I get up till I go to bed. There is a lot to learn and I'm excited to learn it. I can already tell this is not easy and the competition for deals is crazy, but Im committed 100% and other investors seem to be very willing to work with us, surprisingly. My biggest fear in all of this is accidentally doing something illegal. There seems to be a lot of fine lines to walk when you don't have a real estate license. Trying to figure out LLC and how that works to get a company name going. Again, I really appreciate the response! Have a great evening.
@Jessica Martin I was searching the site for wholesaling in Texas and saw this post and was wondering how you are doing today with REI. I am new trying to get started with wholesaling and a little overwhelmed with so much to learn and wanting to do it "right".
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