Anyone have any stories they'd like to share about their first wholesaling experience? I'm looking to get into wholesaling relatively soon. Just curious to know, good or bad. I'd like to hear!
Alright...you wanted ugly? Here goes. My first wholesale deal started out looking spectacular. It was a referral from a yellow letter I sent out. Lady didn't want to sell her house but gave my info to her son's fiancee whose mother had passed away recently and left her a house. When I went to talk to her and see the house she said, "if you don't buy it I'm gonna burn it to the ground." She apparently had already started quiet title proceedings with an attorney to get title in her name and the process was close to completion.
So I get it under contract for under $30k figuring on a rehab of about $25k and an ARV of about $85k. Had a buyer lined up within a couple days and his contractor confirmed my rehab numbers. I was going to make about $7,000. I stayed in contact with the attorney so I would know when I would be able to get this deal closed. As soon as I got word that title was now in my seller's name I boogied down to the title company to open escrow. After a few days the title report comes back and...WHAT?? An open mortgage with a $66k balance left from the deceased mother and two child support liens totaling about $8k from the state against my seller! My first wholesale deal imploded before my eyes.
Two things I learned on this: (1) Have title run IMMEDIATELY after getting the contract; and (2) it would have been MUCH better if the attorney had run a probate instead of quiet title. That way I could have dealt with the daughter as administrator of the estate, worked out a short-sale with the bank on the mortgage and the state liens never would have attached since the daughter never would have held title.
Thanks for the story, @Jim Viens . It's good to know some realism on the subject other than always hearing positives. But how did you end up getting out of that situation? Was the contract setup to where you could get out risk free or did you lose a little money from a down payment?
The contract I use requires the seller to provide clear title.
how does one go about doing a title search? Cost?
Thanks for the info on the post @Jim Viens !
Would you mind sharing the contract you use or where I can obtain one?