First Deal?

Question

I got a couple of questions. First what was your first deal like??

And second I read somewhere on here that you can make money by getting contracts and then selling them to other investors. Can you guys explain this a bit more please??

Patrick E. · Answer

Anybody got an answer?

Patrick E. · Answer

Are there any good books about this or maybe a chapter in a good book about this?

Patrick E. · Answer

How do you find the investors??
            
            So you don't need any money to do this correct? You just find a house, make a deal, sign the contract, and then sell the contract to an investor??

Frederic Petit · Answer

Wholesaling works, some people are making money doing this all the time but you also have to be aware of what the risks are.

First, you will probably have to give a deposit called earnest money to get the property under contract.

Second, you have to be sure that the deal is going to be interesting for investors.

If it is not what they are looking for, they won't buy it and if there is no buyer, at best you will loose your earnest money if you cannot close or will have to close the deal yourself.

Charles Whitaker · Answer

Yes. You do not need money to assign a contract, however, you must be ready to either back out of the contract at closing or have cash ready to purchase the property. Beware, backing out of contracts consistently will start your reputation off in the wrong direction and will lead to fewer leads down the road. If you are not willing to purchase the deal after not finding a buyer, it probably wasn't that great of a deal to start with.

A very important aspect of assignments is the time issue, most owners prefer cash now. Can you find a buyer for your potential property within 10 days, maybe 3? This is why such an emphasis is placed on building a solid buyers list; all of which are ready to buy. I recently assigned a contract to another investor with a much stronger buyers list; due to my lack of such I lost out on an extra 5K. Experience is painful at first. Build that list constantly and relentlessly and you should be fine.

J Scott · Answer

Look up "wholesaling real estate" elsewhere on this site and then Google it...

Shawday Bentley · Answer

Oh, there is also usually an assignment contract signed by you and the end buyer, also.

Shawday Bentley · Answer

To answer the 2nd questions:

It starts with the contract. On the line where you put the buyer's name you place your name followed by "and/or assigns."

This allows another party to become the buyer. Then you just determine how much you want (ex:$5,000) and you charge the investor that fee. They end up buying the house, not you.

Rob Beeman · Answer

Oh, forgot part one of you question. My 1st deal - bought it for 17.5k, rehabbed it and sold it for 42K to a very nice retired truck driver and his daughter. It was fun and scary at the same time.

Rob Beeman
Grindstone Financial
Hard Money Mortgages

Rob Beeman · Answer

Amber is correct, the sales contract is assigned to the third party for an assignment fee. Now the new buyer has the rights to that sales contract and should receive a copy of it. It is up to the new buyer to schedule settlement. If for some reason the lending source (if their is one involved) for the new buyer forbids the use of assignments, then you would have to execute a 2nd sales contract between yourself and the new buyer disclosing the price that the buyer is paying you for the property, which will mean 2 closes (settlements) #1 - from the current owner to you, #2 - from you to the end buyer (double closing fees). The benefit with an assignment is only 1 close, you pay no closing fees, and you don't even need money to do the deal (short of a small deposit to tie up the property). The downside to doing a assignment vs. a sales contract with the person buying the property from you is that they realize what you are making on the deal (some people care, some don't).