I have a home under contract that I have been advertising for sale to cash buyers in the area. So far I've received an offer for about half of what I want to sell it for. With the taxes I wont make too much on the contract. It was the first offer from this buyer, so I'm not sure if I want to take it or attempt to negiotate (I'm actually kind of nevous about bartering for more.). I had another "offer" from a investor who is also looking to wholesale it and asking for a 30 assignment contract for him to advertise and sale. Now I just listened to a podcast that spoke on "non exclusive options to sale", kind of a finders fee agreement. If i wanted to take this deal how would I do it? the property is a REO so I was looking to do a double close, but if he is not the end buyer how would that work? Is it possible?
Who is the bank that owns the REO and are there any seasoning requirements in other words are there any restrictions on flipping the contract and/or reselling the property. Usually(almost always) the REO/Short sales can not be assigned. Usually you will have to purchase under and LLC and sell the rights to ownership of the LLC so that your buyer can close as the new owner if the LLC. Banks have are a bit wiser and are now requesting proof of ownership of the LLC before hand and POF.
Long story short no it won't work. Your profit would have to huge you will beed earnest money to lock up the REO and you will need time and money to set up a new LLC to use on the contract.
So you're trying to flip a REO for double what you have it under contract for? Doesn't sound reasonable, trying a more realistic asking price, and you'll get more offers.
@Manny Cirino I do have an earnest money deposit of 10% for the deal. I was thinking to use a transactional lender for the rest.
@Wayne Brooks My asking price is conservative. It may be possible that the investor is just trying to lowball me. I had another ask me why my asking price was so low for the home. Of course I gave myself a little wiggle room because I didn't expect to get what I asked, but I thought the initial offer would be a little closer. I am taking into account the liens I would have to satisfy along with a modest profit.
The name of the game is to sell as quick as possible transactional funding will only work if they do not have seasoning requirements. do they and will they let you flip? is the REO agent aware of your intentions?
@Manny Cirino there isn't any seasoning requirments for this deal. The REO agent knows that I am an investor--I'm working with her on another property after this one closes.
- If your considering offers at 50% of what your trying to wholesale at .. then there's a problem with your re-sale price.
- Your wholesale price should be enough for a cash investor to make a profit.
Phil Z., TOP END Properties | 203‑936‑7776 | http://www.rehabhousesinct.com
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