Purchasing a wholesale deal

[Michael Veloso]

Good Evening Bigger Pockets,

I am currently looking a purchasing my first deal from a wholesaler and we have not had an opportunity to have an inspection done. I read the assignment contract and I do not see any language on ways to get out should there be a problem with the building. Question 1. Should I even consider signing an assignment contract without having an inspection completed and the financing in place? Question 2. Is there any protect for the end buyer on this type of deal?

I understand wholesale is generally as is and I do believe everyone is acting in good faith, but ultimately I am committing to buying something that I might not be able to purchase.

#nervousnewbie

[Evan Polaski]

@Michael Veloso, it is understandable to be nervous.  Personally, I would not buy from a wholesaler for your first deal.  You are correct that there are no protections.  This is common in the wholesaler offers I have seen.  

But, with this presumably being your first deal, I would not want go in without an inspection. Or at least walking through with a contractor to understand what's needed. In my experience, some wholesalers are extremely aggressive on ARV and rehab costs, so I would make sure you do your own due diligence.

Secondly, you can get some great deals from wholesalers, but typically they will want cash buyers.  Based on your comment, I am assuming you are financing, so I would be cautious.

To find your first deal in this market, I would try listed properties that have been sitting a long time on the market, where you can inspect, get bids, secure financing, etc in a more reasonably pace.

Once you have done a few deals, then you will be in a better spot to buy from a wholesaler.