Can anyone please tell me the steps needed for wholesaling in san antonio, tx. How to find deals, what forms need to be filled, where to find those forms,....
So let me get this straight. You want me to give you all the answers to get started in a business that you have not even tried to google and get some information??
This is the stuff that google is made for. Come back when you have looked through the forums a little and put out some effort.
If anyone is going to start a business and try to run it successfully they need to do some research on their own, not post here and there for everyone to give everything to them. WOW!!!
@Rick Pozos Chill man!! I didn't ask to be spoon fed. No need to get offended, if you dont want to answer, move on.
Hi all including Rick ,
I did browse google and the TREC site as well. Like someone else said the form on the TREC site is a little too confusing to read, so I was wondering if there were some easier to read forms out there for the purchase and sale contract and for the assignment contract. I wasn't sure whether we can make up our own contracts (as long as they have the essential things that need to be mentioned) and then tweak them to make any other changes.
Im still trying to find an assignment contract.
Also, accourding to SB2212, wholesalers need to specify that they are purchasing the property under contract and then intending to sell the contract to someone else. Does this need to be specified on the seller to wholesaler contract OR on the wholesaler to buyer contract OR both? Is it okay to do two purchase and sale contracts: one when acquiring the property and then one while selling to the third party, or does it have to be one purchase and sale contract and one assingment contract?
@Shashank Gokhale I started off about 8 months ago and the biggest piece of advice that I have is to do your homework and educate yourself. Having a good knowledge foundation will give you credibility with other investors and show that you are serious about real estate investing. After all, if you aren't willing to invest the time to learn then why would someone else want to invest their time in you? Also, I would try to have more specific questions like, "Where can I find a good example/template of a wholesaler assignment contract?"
For education, I recommend listening to the BiggerPockets podcast every chance you get and reading the thousands of articles on this site. Seriously, if you just Google "wholesaling BiggerPockets" dozens of very informative articles pop up. Tons of free information out there.
Well, well, well! Some people say that there is no such thing as a dumb question. After all, everyone has questions including those on here who claim that people who ask for help "arent doing their homework". No one was "born yesterday", so to say that "you need to do your homework" is kind of stating the obvious. There are other people on her who ask the same questions I do, its just that some people get singled out for asking questions and other people dont.
Texas is a whole different ball of wax than other states when it comes to wholesaling so info from local investors is more useful at times.
I can not give legal advice because I am not an attorney, but I can tell you what I do with just about every property that I buy. I use the TREC contract to purchase. I have read through it about 3 or 4 times in the last 16 years(usually just after changes have been made to it by TREC). After that I just fill in the blanks. After my name as buyer I put and/or assigns to make it "legally assignable" in Texas.
If I decide to wholesale it for some reason, I have my own assignment contract that I drew up myself, that no title company has ever had a problem with. It says that the assignee abides by the original contract, has assignor information, assignee information, and how much the assignment will cost the assignee. Assignor and assignee sign the assignment contract and it goes to the title company after the contract. Assignee goes to the closing, I get a wire at closing.
Every once in a while someone does not want to use the 10 page TREC contract. I will include the parties to the contract, consideration, property, terms, etc. (things that constitute a contract) on a 1 page contract. Again, no title company or attorney has ever said that my contract is not a valid contract. If they did, I would say, "What should I include in this document to make it a legally binding contract".
@Rick Pozos Good information, thanks Rick! I was wondering if a contract, like the TREC one, could be amended with add-on clauses, would that still make it a legal contract? Like say, if I put in a clause that says
"Seller needs to make so and so improvements to the property that need to pass inspection". Im new to the world of contracts, so up until recently I did not know that anyone could make up a contract and that as long as it had the minimums required to make it a contract, it would be legally binding. I guess it is,as Judge Lillian would say "Show me a contract between the two of you, even if its words scribbled on a piece of toilet paper". :)
@Shashank Gokhale I apologize if it seemed like I was talking down to you. I was just trying to provide honest advice because there are many people that post before taking the time to do research. Ultimately, I just want to see new investors and the first step is to "do your homework". I do wish you the best in your wholesale endeavors and I hope to see you blasting out some great deals soon!
@Jason Lee I have been going through the podcasts and several youtube videos, books et, so I have a decent handle on things. I just like to get others perspective on things.
@Shashank Gokhale awesome to hear and agreed, always a good to get a second opinion. I'll be sure to help answer any questions if I can.
I would recommend youtubing the TREC contract, there is a 40 or so minute video that goes through the contract and explains it line by line. If you aren't used to it can be a bit daunting and a lot to understand.
As far as your questions, I think it depends on if we are talking wholesale transactions or traditional on market residential transactions. Most of the wholesale contracts I write are pretty simple, we made add conditions that the house has to be vacant prior to purchase (under special provisions and other than that I write them with no option and we close when the seller wants. But we also close on most all of our deals and rarely assign. Wholesalers who are assigning may use paragraph 23 and write in a very long option period so they can back out if they can't close. We don't do that but it happens and i've have had a homeowner reach out to me multiple times over a few months because she kept contracting her house to folks who couldn't close. Wholesale contracts we normally pay all closing costs (survey, title, etc).
Residential contracts are the same form but a little more variation exists. They usually have addendums for financing and sometimes other addendums are attached as well. Title, survey, home warranties, option periods, all vary quite a bit.
The specific question you asked regarding repairs is found in paragraph 7 where you can choose to take the property as is, or based on conditions. In regards to an inspection this normally comes afterwards in the form of an amendment.
Hopefully this information is helpful, let me know if I can be of assistance. As always, I'd recommend getting out to some of the meetups and getting to know folks who are doing the things you want to do. @Rick Pozos may have come off harsh, but he's a good dude, has done a lot of deals, and holds a good meetup. My brokerage has one as well. There are several around SA.
@Aaron Bihl Thanks for the reply, lots of good information from the guys here. One thing that is still concerning me is that rule SB2122 about assigning contracts and being able to wholesale houses.
As I read it, on the one hand it says that you cannot sell a house or advertise that you have a house to sell if you do not own it, and that selling a house in texas that you dont own is only legal if you have a real estate license in texas. And the rule also says that the wholesaler can sell the contract to a buyer but he has to be transparent with the seller and the buyer that the wholesaler is going to assign the contract.
So, Im wondering if the original purchase agreement that we fill out with the seller is enough to let us try to sell the house legally as long as we have the assignment clause in the contract, that says that it will be assigned. Chances are it is, cause that is what the rule says.
The real question is how do you advertise that you have a property that you want to sell when you don't own it. Or does the purchase agreement make it your property to sell even though you haven't paid for of the house. Or should we just say we are selling a contract.
All thought welcome
I'm still new to wholesaling but I've read that whenever you get the property under contract it gives you "Marketing Rights" not exactly sure how it works, would love hear from others though.
@Shashank Gokhale all you need to focus on is marketing. You need to become an expert at finding real deals. Everything else you can learn as you go. Spend 95% of you time marketing and 5% learning when you can’t market. Marketing success is different in every market so you just need to research the marketing techniques...direct mail, driving for dollars, seo, ppc, referral, bandit signs, cold calling, etc. let me know if you have questions. Im in Dallas.
If you use Trec I recommend taking the sales agent class in person for law of contracts or promulgated forms forgot which one. If not, use one pager and assignment off of Biggerpockets files place. Thats what I use. I use trec 1-4 when lawyers involved or agents. If you use trec be prepared to explain every paragraph to seller. If you cant when they ask "what does this paragraph means" say good bye to your wholesaling business.
@Damarius Gilbert Yea, the TREC form seems a little complicated, kind of an overkill, probably has every single detail covered, but explaining it is going to be a doozie for me. I've got one that I made up, but Ill look at the one on BP as well, its probably a little more detailed than mine. Do you use two purchase agreements, one on the seller side and one on the buyer side, or do you use one purchase and one assignment? I dont have a real estate license, and Ive read that TREC rule SB2122 says that if you dont have a real estate license, you can only sell a property if you own it . Does getting it under contract equate to owning it? If it does than I can advertise that I sell houses, otherwise SB2122 says I should say I sell contracts. Let me know please
@Adam Mitchell Thanks man, Ill definitely need some help as I get my feet more wet in this wholesaling business.
@Shashank Gokhale You are selling and marketing the contract. Not the house. Trec doesn't go after unlicensed brokers anyway, they provide oversight on Agents and Brokers. Spoke to someone who sits on Trec Commission recently. I sign one page purchase agreement, Send it to title company. Sign a one page assignment with the buyer. Send it to title. Then you get out the way. You've assigned your interest, you have nothing else to do with it. You are not a middle man for the buyer or seller. Don't take pictures and post online.That's where people get in trouble. Network before start wholesaling to find buyers first. So if you happen to sign a contract, and decide to sell your interest. Its just a phone call and you are not marketing a property.
TREC 1- 4 is for agents and brokers. They have to use that form. In Texas you can write a contract on a piece of toilet paper if you wanted and send to title company. You can also have verbal agreements but hard to enforce. I'm not a lawyer by any stretch but I do have some knowledge of the industry.
@Damarius Gilbert Thanks for the insight. Ive googled for purchase agreements and assignment contracts and such. I'd like to see the ones you use. Please can you send them to me, if you don't mind.
@Shashank Gokhale thanks for this thread!
@Shashank Gokhale Thanks for this thread. I'm in the same place you were. I've been doing lots of research trying to iron out all the details of the wholesaling process, especially in Texas.
@Erin Elam hi, youre welcome. We are all here to learn about real estate, and I find that the more I can share with others, the more it helps me as well as others
If you have any tips you would like to share, then please do so.
In TX, the laws for wholesaling for someone who does not have a real estate license are to be upfront with the seller as to what you are trying to do, get them to understand that you are a wholesaler are selling a contract and not the actual property.
If you mention this in your marketing and you tell the seller that in order to find a buyer, you are going to post pictures of his house in your marketing, then can you legally post pictures of the property without breaking the laws in Texas?