Help! North Carolina Wholesale Contracts/Understanding Rehab Cost

14 Replies

Hello everyone,

I am on the move! I have built a buyers list of about 15 cash buyers! I am really excited. I understand that Purchase/Sell Contracts and Assignment Contracts are different depending on the state.  The Purchase/Sell contract I found online is very confusing and I am not sure how to insert the the clause to make it assignable.  Does anyone have any contracts that are work for NC? Does anyone know of any investor friendly real estate closing attorneys in Raleigh, NC. 

I also have a question about Rehab cost.  The formula I use requires a rehab cost amount in order to effectively analyze the deal and make a fair offer.  Can someone please help me with this.  I realize that some rehab costs are generally based on personal preference.  I also realize that there are some repairs that must take place in order for the property to be up to code.  Please help! My email is blowing up with motivated cash buyers.  Time to fill my sellers bucket. Thanks everyone!

@Willie Morgan On the contract just go with the standard NC contract...where you enter you as the buyer add language like - @Willie Morgan and/or assigns

On the estimating rehab check the resources section on this website for @J Scott The Book on Estimating Rehab Costs.  It is well worth it.  Also the costs used here are based upon Atlanta pricing which I have found is somewhat linear to NC.  Some things like concrete work however are much more expensive in your area compared to Charlotte and the Triad.

@Jared Rogers    is correct. The newest 'standard' contract (Revised 7/2013) has a checkbox on page 6 (of 11) under SELLER REPRESENTATIONS that allows for Ownership declaration via a checkbox: "Seller represents that Seller:... does not yet own the Property." That makes life a lot easier for wholesalers.

I hope you work out. Our area could use a few good wholesalers.

BTW, Welcome to BiggerPockets!

@Willie Morgan I use an app called hammerpoint. If you know the average of what a contractor charges in your area you put that in and then your square feet.

Welcome to BP community @Willie Morgan  It is a great place to meet new friends and learn about various aspects of real estate and more. Here are a few recommendations for you:

Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meet

Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts

Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/

If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select that person below. He or she will be notified of being tagged so that the conversation will continue.

Wishing you the best! 

Thanks everyone! I have a copy of the NC standard contract and it's C-O-N-F-U-S-I-N-G! I don't understand it, maybe because it is soooooo long.  My cousin is a Realtor but he is not forthcoming with information.  I managed to get some info out of him.  I will get him to myself and go over the NC contract with him.  

@Willie Morgan make it easy on yourself and just download the contracts off BP... You can revise and taper to your needs or buy the cd at staples and you'll have tons of contracts. If you go through an attorney for your deals they should look over it and make sure you have all that you need. If you're worried pay an attorney to write up a wholesale contract for you. 

I've used the ones off the CD, the NC contract and the BP one. All work fine. Just make sure you have your contingencies in place. 

For rehab costs I've learned a quick way to gauge costs is scale from about $7-$12 per square foot. 7-8 good house, 9-10 decent and 11-12 needs work. Anything else is complete rehab. For example 1450 sq ft house in good condition (1450 x $7) and I add 2% of average comp ARV (just in case). Then typically I'll give a range low to high. Every buyer is different in the fact they want different things in the house or are particular about certain things. This gives me room for a range of buyers.

Anyways hope this helps and I didn't confuse you anymore. Can't wait to hear about the first deal!

"Feed your faith, to starve your fears and doubts"

Originally posted by @Willie Morgan:

Thanks everyone! I have a copy of the NC standard contract and it's C-O-N-F-U-S-I-N-G! I don't understand it, maybe because it is soooooo long.  My cousin is a Realtor but he is not forthcoming with information.  I managed to get some info out of him.  I will get him to myself and go over the NC contract with him.  

??

I suggest you pay someone competent to show you line by line, section by section all the ins and outs of the standard contract. They will give you very in depth details on how it works, etc.  And it's not an attorney for $100/hour. It's $5.85 an hour via the Raleigh Broker Pre-Licensing Course up on Creedmoor Road. Educate yourself.

@Chris Martin.  I would first like to say thank you for your response.  I will not be paying $5.85 an hour to attend a class I don't absolutely need in order to be successful in this business.  I am thankful to the attorney and Realtor that have reached out to me and decided to help me for FREE! I offered to buy them lunch, and they respectfully declined any monetary compensation.   And it appears that a Realtor likes the idea of being able to take advantage my dead leads.  Needless to say, I have a wonderful week ahead! I love Bigger Pockets.  You guys are great!

Originally posted by @Willie Morgan:

I will not be paying $5.85 an hour to attend a class I don't absolutely need in order to be successful in this business.

While you don't absolutely need to have your real estate license to be successful in this business, it certainly makes things much, much easier.  It gives you control over your deals, access to data and even provides for some extra income on deals you're doing anyway.

@Willie Morgan  You yourself said the standard contract is confusing to you. All I suggested is that your should "Educate yourself." I don't care if you take the class or not. In my opinion remaining ignorant will put you at a significant disadvantage when dealing with the majority of us who do understand the basic standard contract and its addenda.

BTW, you can take the class for information and not take the final to become a broker. While this is uncommon, I have done it. I took the class to educate myself. It's not just talk.

@Chris Martin  @J Scott ...thank you guys for the advice.  I understand the necessity of educating myself, however, I do not have a lot of extra money laying around to take a course right now.  I would love to take a class!  I explained that I am going to be able to educate myself with the help of my new friends.  I actually went to lunch today with an attorney and educated myself on the contract and addenda. I completely understand the contract and what I need to do.  I would never jump out there and do something that is legally binding without understanding the terms.  

The reason I enjoy BiggerPockets is because there is a wealth of knowledge and a bunch of people that are willing to help. I also connected with a Real estate attorney that is AWESOME! Yes, the contract was confusing, but I understand now. Tomorrow, I will be in a REIA meeting. I am meeting with a local wholesaler in about an hour. This is a continued learning process, which is awesome! I will always have questions. I really appreciate a forum that I can ask even the silly questions. Thank you guys for keeping me in line. You guys are great!

@Willie Morgan Your an awesome guy. I respect that fact that you realized you didn't understand something and then took it upon yourself to solve that. I am having the exact same problem and now i will follow your lead and find people who i can trust and do not mind all of my "to them" simple questions. I have a lot of motivation to want to be successful at this. This post just kicked me in my behind, i need to stop making excuses and go get it done. @Matt Redden   l wish their was a guy like you here in Guilford County, because i had a better understanding of how i need to manage my deals. Now, I promised myself that by the end of September i need to have at least 2 deals done or at least in the works. Thanks bigger pockets, and all of you. And im going to be wholesaling in the Greensboro, high point area, for those of you who want to connect im available. Yeah, I just had to get that in their. lol

@ Matt Redden: What a great quick estimate guide! Thank you for sharing that experience!

@J Scott: Thank you for that post! I am currently going through the real estate licensing class here in North Carolina even though I mostly just want to invest. You have given me some comforting reassurance that I am not doing this for nothing.

@Warren Hemphill: You are absolutely right, it is encouraging to see people actually try to solve their own problems; these days, I feel it is getting frightfully rare. Did you meet your 2 deals goal?

the the “ and Or assignee” with the standard nc purchase agreement still a viable co tract for wholesaling? I just wish the thing was shorter. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here