Looking to buy my first home from wholesaler

Orlando, Florida
General Real Estate Investing
2yFollow

Looking to buy my first home from wholesaler

Adam MarxPro Member
Member since 2024 · 11 posts · 5 votes

Good afternoon,

So I have made a verbal commitment on price for a home.  It does not need alot of work but a toilet is missing.  The current tenant says they have gotten the problem fixed but all that is required is some tile work and installing the new toilet.  Now the wholesaler is pushing to move this quickly.  I am looking to get an inspection done just to verify that the plumbing is not going to be an issue.  I do not feel that this is a ridiculous request.  I figured I am willing to sign saying I will purchase on the contingency that I am satisfied after an inspection.  So I am asking everyone's opinion on this.  

Also, the tenant is being given 30 days to vacate with 10k$ being held in escrow.  I am new to this and this would be my first purchase.  Should I run away simply on the fact that there is a holdback due to the tenant needing to vacate the property? Is there anything I need to be concerned about with the tenant.  I met him when I looked at the property.  I can't say I am worried he is going to destroy the property as he does not seem angry with the situation however I am curious what those with more experience my offer in advice.  Thank you.  Sorry I would go into more detail but I am trying to juggle a million things in a short amount of time but was hoping to hear your thoughts.  Thanks!!!!!

0Reply
21 views

2 Replies

Jump to latestLatest
  • Sarah Brown
    Real Estate Agent · Nampa, ID · Member since 2017 · 439 posts · 361 votes
    2y

    Buying wholesale properties is not for the faint or weak of heart.  You sometimes go into the blind off of visual inspection alone because it's a good enough deal to absorb those types of costs.  Sometimes the wholesaler may have an inspection report on hand already. 

    The headache of a getting a tenant out that refuses to leave is dependent on your state laws. I encourage you to become familiar with them 

    0Reply
  • Shawn McCormickPro Member
    Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes
    2y

    @Adam Marx Unfortunatley, most wholesalers won't allow any inspection period or contingency, that's kind of the risk of buying from them, but the benefit of getting a property under market value and without much competition. 

    The fact that you got in to see it is even pretty rare. The typical wholesaler is cash/hard money only, non refundable deposit, no inspection period and you pay both sides closing costs. If this scenario feels too risky, than you'll need to find your own off market deals. 

    If you are using a hard/private money lender that actually vets the deal (not just you), you might have some leverage. If they have a great track record and have worked with the wholesaler before, they may be able to negotiate an inspection or holdback, but don't plan on that as a strategy. 

    There are soooooo many wholesalers that took a 3 day course or learned it from youtube, it is likely they don't know what they are doing either. Explain your situation and that to keep the deal together in the best interest of you, them and the seller that this is not much of a request and lets get it done.

    The tenant situation should have been resolved before you close. Once you close, they are your problem. You may want to make sure you have some extra money to give them cash for keys if needed.

    Best of luck!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free