I am a recent college graduate struggling to make ends meat. Recently I have been looking into investing in real estate. Wholesaling and flipping houses has become my primary area of interest and I was hoping to get some more information about the technical side of these deals. I believe I understand the process fairly well, however there are a few aspects I need more clarification on such as:
1: If I get a seller to sign an assignment contract with a 30 day inspection period (allowing me time to flip the home myself), can that seller back out of the contract?
2: Can I back out of the contract if I am unable to find a buyer for the property?
3: Do most sellers require a POF before signing an assignment contract? (If so this will be difficult as I have no credit and no start up capital)
I apologize for the long post! Any help would be greatly appreciated!!!
All good questions. My suggestion would be to partner with a seasoned investor rather than be made an example out of later. To answer your questions in order though and are as follows;
3) NO a lot of sellers are not qualified to sell any property because their lack of education.
I recently spoke with some Real Estate agents in my area, however they seemed very reluctant to help me and were fairly adamant that it is very difficult to wholesale and flip homes. Despite this, I am still motivated and want to learn all I can. I was wondering if you would be willing to clarify a few more points for me.
1) If I want to back out of an assignment contract I assume the verbiage of said contract would need to state my ability to back out?
2) Is there any monetary penalty for backing-out of an assignment contract?
3) What is a typical assignment contract duration? 30 days? 45 days?
I hope my questions aren't too troublesome. I just want to understand these deals as best I can because I don't want to lose money on my first attempt. Thanks again for your help!
As a RE Agent, I can tell you, they are looking from the retail perspective. They aren't bad people by and large, they simply don't understand the wholesaling business. That's why you should check to make sure that any RE Agent you work with is also an investor. I would interview them for the job, be discriminating, and absolutely never sign a buyer's agreement with them for more than the current buy. Don't let them fool you, they have complete control over the duration and content of a buyer's agreement and a good one will tailor it to meet YOUR needs.
@William Jones as a RE broker if this gentlemen came to me .. he would not be a client I would take on or let one of my agents take on...
working with folks with VERY limited resources is a monetary killer to most RE agents...
and wholesaling when you have no or little means has about a 99% wipe out rate.
real estate is tough.. its not a business you just jump into because you think you can make a ton of dough with no money.. put in your dues.. get a license and work with a top producer to learn the bizz
or find a big investor who actually can transact and be the land or home Ak guy... trying to do this in your current state is pretty darn tough
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