Wholesaling in Tennessee...

11 Replies

Hi again! So I wanted to see if anyone out there wholesales in the Tennessee marketplace. I have various articles and I think in Tennessee, you put in any contract that you are thinking of wholesaling, a clause that states that the contract is assignable. Am I correct in that? Just looking for someone who actually has done this in TN that could provide any guidance!! Thanks in advance BP group!

there are thousands that wholesale in that state.. assignment clause is recommended

@Jay Hinrichs Great!! That's exactly what I was thinking, but definitely wanted to check before I got in any hot water. 😊 Do you think me being a real estate agent and wholesaling is a bad combo? Or as long as I am open and truthful with everyone involved, I'll be alright? Thanks Jay!

the only one to ask this question to is your supervising broker or the owner of the brokerage.

if your only wholesaling to make bigger money than a commission then logic would dictate you have to be untruthful to the seller and or buyer to the value of the property.. that probably goes against the rule of ethics.

IE your going to assign contracts that is.

if your going to close.. I have been licensed for 4 decades I ONLY close.. and its not an issue I offer cash.. I don't represent the buyer.. I put a disclosure that I am the principal in the transaction not taking a fee.. and I am buying for 

PROFIT or LOSS  … they sign and acknowledge that.. and if they want to sell for what I want to pay .. deal is done.

if your think your going to tell someone their house is worth X when its really worth Y just so you can make a big spread that is greater than your commission or tell them your not taking a commission.. then that's your choice..

Although do keep in mind most wholesale deals are distressed wrecked houses that need rehab etc.. and commission are negotiable.. there is no law of charging a higher commission for tough to sell properties.. if that is what your aiming to do.. 

00I worked a builder out of a 22  duplex's he had built was having a tough time selling.. he wanted 30

on the duplex deal builder wanted to net 300k per duplex he had 22 of them.. 

I told him my fee was 30k per duplex.. so that was my listing agreement  330k each  30k flat fee commission.

I took them all to the SF bay area and sold them all in one weekend.. they closed up over 60 days.. so that was a nice 660k in COMMISSION revenue for that quarter.. now I had at least 100k in expenses I had to  front 50k for marketing the event.. but it worked.. I took the risk .. I mean I could have not sold any.. but the market was hot then it was 2004.. 

Hello @Alisha Gilliam , I wholesale properties in Tennessee all the time. My team and I usually will rehab them ourselves but when we have too many projects going or need the liquidity we will assign the contract to another investor. There are many different ways to go about this. We usually will use an assignment contract outside of the original contract for the assignment fee or we will just add in the contract that myself or another party will purchase the property. In the state of Tennessee, all contracts are assignable if stated so.
@Jay Hinrichs Very nice!! Yeah, I'd say that was a pretty nice profit for those duplexes. Lol I know this may sound silly, but I honestly had not even thought about wholesaling off of the mls... it just seems strange to me. And your right, almost unethical in a sense. In my mind, I was thinking of finding off market deals, letting them know upfront who I am, and that I was planning to assign the contract. But I understand what you are saying as well. At what point do you tell the seller what your wholesale fee will be? And how do differentiate that from your normal agent fee? Do wholesale sales have to be done with a real estate agent involved? If so, how do you go about the breakdown of fees between yourself and broker? There definitely may be times when we will purchase the property for cash, but I know right now as beginners, we probably wont have the funds to buy every deal. I'm trying to learn more about creative investing/financing. 😊 Thanks again Jay! I appreciate all the advice!

You do not need a realtor to do a wholesale contract. You are selling the contract (paper) to a end buyer. Once you get the seller to sign the contract and or assigns is in the contract, then you can assign it. You have temporary equitable interests in the property and can market as such. As long you have that stated in the contract.

Hello everyone I’m new to real estate wholesaling but I am very resourceful and dedicated. I’ve already found some leads to follow up but figuring out whether deals are good or not has me a bit stumped for now. I am learning everything possible it’s great seeing all of the input and experience on this site.