When you guys purchase from a wholesaler...how does that work? Who draws up the contract? Do you use your own realtor or lawyer? I'm not sure if I trust the wholesaler to draw up the contractor and help me with inspection and appraisal as an out of state investor. How do you guys do it?
Ex: Wholesaler X from Utah has a house to sell me that he's rehabbed and ready to go. He wants 48k. I do the numbers, it all checks out. Great! Now I want to make sure it was rehabbed well and there aren't lurking dangers, so I want a good inspector to look over it. And an appraiser to appraise in order to finance it of course. I do my own comps and ensure that it's well-priced. All checks out. I tell him I'm interested, let's do it........Now what?
Hey @Shiv Jey
Your scenario sounds a little bit different than a typical wholesale deal. As a wholesaler myself, we typically don't do any of the rehab work. It sounds like this is a little bit more of a turnkey investment, yet possibly still buying it at a discounted price.
My first question would be: Why would he sell at a discounted price if he already did all of the rehab work and could list if for retail price. Why is he even bothering to try and sell it to an investor like this.
Second question: What part of Utah are you buying a fixed up house for 48k? Because I want in.
What I do when I am in a situation where I can't get to a property but I want it looked at is to hire a contractor that can go in a double check a lot of the work. You will have to pay them obviously and tell them the things that you want them to look at and inspect.
I would not have the wholesaler do the inspection stuff for you, but it would probably be okay to have them draw up the contract. They should have one already put together from their lawyers originally. Or you could just request that they do it on the standard state document and then have a realtor look it over to make sure that it makes sense.
The appraisal will be from the bank and they will typically set it up because they will use someone that they trust so you shouldn't have to worry about that part.
You wouldn't actually purchase the property from a wholesaler, unless the wholesaler is the owner of said property - and then you would just be buying a deal.
There are several ways to wholesale, but ultimately you would be purchasing the wholesaler's position in the real estate purchase contract, and that wholesaler would then assign that contract to you as the buyer.
You probably wouldn't use your agent in this scenario because agency has to be created prior to engaging in contracts - and Real Estate contracts are different than Agency contracts. This gets kinda messy so many agents tend to stay away from assignors and wholesalers.
It's more likely you would need to use an assignment agreement - best created by an attorney.
P.S. If you're buying a rehabbed home in Utah for 48k it's probably a mobile home.