Buying property from a wholesaler

Jeffrey K.
Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
16y
They are almost all fly by night. Use a lawyer like any ofhter deal and you should be fine.
2 Reply
Bienes Raices
OP
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
16y
absolutely, I will use a lawyer
2 Reply
Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
The "wholesale" deals I see have incredible numbers - when I say "incredible" I mean don't believe them :D
2 Reply
Bienes Raices
OP
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
16y
Originally posted by Steve Babiak:
The "wholesale" deals I see have incredible numbers - when I say "incredible" I mean don't believe them :D

I've done some drivebys of properties offered by one of the biggest wholesalers in our area. Some of the stuff was junk that looked more like a teardown than a house to be rehabbed.

What I was wondering about is if you have to do your own lien (and other) research on these properties as you would for something bought at the courthouse auction? I was concerned that there could be municipal liens that a title policy wouldn't cover.

Another thing: do the wholesalers give you an inspection period like you would get on an REO, so that you can have a real inspector come through, or are you expected to do your own inpections and make a snap decision of whether you want to buy or not, given that the wholesaler may only have a short time frame to when they have to go to closing? Thanks

0 Reply
Brian H.
Real Estate Investor · Akron-Canton, OH · Member since 2009 · 53 posts · 46 votes
16y

A "good" wholesaler should have done their due diligence, and would give you a chance to do your own due diligence.

Of course, you have those "wholesalers', and I use the term loosely that put anything under contract probably did not do any title research, and won't give you the time to do your due diligence. They won't last long because they don't understand the needs of their end buyers, and they are probably offering crap deals.

If you get a wholesaler trying to quickly pawn off a property tell em to "pound sand!" (as another BP member would say) :D
1 Reply
Brian Haskins
Real Estate Investor · St. Louis, MO · Member since 2008 · 443 posts · 91 votes
16y
It wouldnâ€™t matter if they are a fly by night or not. If they have a deal and its legit then whats the problem. The title company will do the research for you and you can still do your due diligence. There will be many unknown wholesalers that run across deals every now and then. You don't want to limit yourself just do your research and get title insurance. You just want to make sure nothing illegal happens.

Brian Haskins
0 Reply
Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
16y
I agree that investors can get inspections if they want but remember, your buying at a steep discount thus the term discount wholesale. If you want to inspections and get the land surveyor out and everyone and their dog, then you might want to go buy retail or full market price if you feel you need the level of security. Buying wholesale sometimes comes with some risk, this is why you should expect some unexpected issues. If your not willing to play by the wholesale game, then you should find another game to play.
Curt Davis - KAIZEN Realty538 Reviews
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0 Reply
Bienes Raices
OP
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
16y
Originally posted by Curt Davis:
I agree that investors can get inspections if they want but remember, your buying at a steep discount thus the term discount wholesale. If you want to inspections and get the land surveyor out and everyone and their dog, then you might want to go buy retail or full market price if you feel you need the level of security. Buying wholesale sometimes comes with some risk, this is why you should expect some unexpected issues. If your not willing to play by the wholesale game, then you should find another game to play.

That's kind of what I suspected, Curt. I'm willing to take the risk, I just like to understand the level of risk is before getting involved, and what's customary, and what's not. I've definitely learned from my REO deal that I need to budget liberally for the unexpected.
1 Reply
Suhas Madappa
Rental Property Investor · Member since 2018 · 19 posts · 4 votes
7y
Any good lawyers you recommend to help close a Whole Sale property in Arizona
0 Reply
Doug McVinuaPro Member
Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
7y
@Suhas Madappa I have been doing residential transactions in Arizona for over 20 years and only used an attorney a handful of times. All of the others have been properly handled with an Escrow Co. The last time an attorney was involved they screwed up and didn't involve the HOA which had to be fixed later after close if escrow.
Is this one unique in some manner that you need an attorney and wouldn't just use an Escow Co?
[email protected]602-751-7577
0 Reply
Suhas Madappa
Rental Property Investor · Member since 2018 · 19 posts · 4 votes
7y
@Doug McVinua Thanks for the quick response. I'm a buyer of this condo in Old town scottsdale and we are using a reliable Escrow company. As you mentioned using a Escrow co might serve the purpose.
But i wanted to be sure the property taxes liens, HOA liens are paid and i guess Escrow co handles that all. Let me know if there is any thing specific i need to watch for while buying from Wholesaler ?
0 Reply
Doug McVinuaPro Member
Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
7y
@Suhas Madappa Escrow normally issues Title Insurance and between the two should get to the bottom of liens etc so you get clear title.
Research the Deed instrument being offered and get comfortable with that aspect. Speak with the Title officer and deep dive into the type of Deed being offered by the wholesaler.
[email protected]602-751-7577
0 Reply
Lydia R.
Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
7y
@Bienes Raices A good wholesaler wont send you a deal until they have clear title from the title company. And they will give you the contact info for their escrow officer so you can call and get info. Also make sure your non refundable EMD is refundable if they cannot deliver clear title and make sure you pay it directly to the title company not the wholesaler.
0 Reply
Suhas Madappa
Rental Property Investor · Member since 2018 · 19 posts · 4 votes
7y
@Doug McVinua @Lydia R. Thank you both and the transaction went well . Wanted to give a recap, the Escrow Company took care of all the HOA liens , Property tax, so i didn't have to involve Real Estate attorney
1 Reply

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