New home contract wholesaling and other strategies

New home contract wholesaling and other strategies

Real Estate Agent · Gilbert, AZ · Member since 2015 · 13 posts · 3 votes

Hey BP!

So...I just got fired this afternoon from my 9-5 because I was talking to people at work about Real Estate and my boss felt like I was focusing more of my attantion on Real Estate then I was on making him money as a Sales Manager for a large freight broker. Needless to say, I was a bit blindsided, but also feel a sense of freedom to turn my focus towards things that I am really passionate about such as Real Estate! 

The only predicament this puts me in is the fact that my wife and I are currently building a new home for ourselves that should be finished in early July and without a W-2, I don't think we would be able to close on it with a conventional loan. The nice thing is that we were one of the first contracts in the development and prices have risen, so we should have a decent amount of equity in it already (potentially $30K-$60K). I have $10k in earnest money in it and wanted to see if you had any advice on options for closing or exiting without losing the EM? 

Here are my thoughts so far:

1) Kind of obvious...find a new w-2 job and close as planned.

2) Figure out a private money situation to act as the bank and close with cash (The lender has a $10k discount in place if you use their "in house" lender, so circumventing this coud potentially cost me an additional $10k on the purchase price)

3) See if there is a way to market and sell or assign my existing contract to a new buyer and possibly flip it for a profit since I have equity in it. I don't know if this is even an option that would work, so I'm specifically interested in getting feedback on this option.

4) Close with hard money and then quickly try to flip for a profit. Not sure if I could refi to hold it, as a backup plan, until I would get a new w-2, so this may be risky with the holding costs.

Let me know what you all think. I would appreciate any feedback on these ideas or additional suggestions!

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  • Real Estate Agent · Gilbert, AZ · Member since 2015 · 13 posts · 3 votes
    11y

    Just wanted to follow up on this post and see if anyone had any insight or could tag anyone in it that they think may have some experience in this area. Thank you in advance for your help!

  • Investor · Phoenix, AZ · Member since 2013 · 167 posts · 127 votes
    11y

    @Aaron R. might have some insight on the private money option.

    Are you familiar with Bob Gomez from AZREIA fix & flip group?  He would be the best contact I know in regards to experience with assigning contracts, and he might be able to help you wholesale it.  He is on BP but the site won't let me @mention him.  I can get you his email if you want it, good luck.

  • Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @Daniel Tansill:

    Hey BP!

    So...I just got fired this afternoon from my 9-5 because I was talking to people at work about Real Estate and my boss felt like I was focusing more of my attantion on Real Estate then I was on making him money as a Sales Manager for a large freight broker. Needless to say, I was a bit blindsided, but also feel a sense of freedom to turn my focus towards things that I am really passionate about such as Real Estate! 

    The only predicament this puts me in is the fact that my wife and I are currently building a new home for ourselves that should be finished in early July and without a W-2, I don't think we would be able to close on it with a conventional loan. The nice thing is that we were one of the first contracts in the development and prices have risen, so we should have a decent amount of equity in it already (potentially $30K-$60K). I have $10k in earnest money in it and wanted to see if you had any advice on options for closing or exiting without losing the EM? 

    Here are my thoughts so far:

    1) Kind of obvious...find a new w-2 job and close as planned.

    2) Figure out a private money situation to act as the bank and close with cash (The lender has a $10k discount in place if you use their "in house" lender, so circumventing this coud potentially cost me an additional $10k on the purchase price)

    3) See if there is a way to market and sell or assign my existing contract to a new buyer and possibly flip it for a profit since I have equity in it. I don't know if this is even an option that would work, so I'm specifically interested in getting feedback on this option.

    4) Close with hard money and then quickly try to flip for a profit. Not sure if I could refi to hold it, as a backup plan, until I would get a new w-2, so this may be risky with the holding costs.

    Let me know what you all think. I would appreciate any feedback on these ideas or additional suggestions!

     Regarding:

    1) yes that is one way to do it if you have atleast 1 paystub from the new job its salary or base pay and you have 2 years in the same industry to use as qualifying income (full disclosure I am a loan officer)

    2) Yes private money would work then rate/term refinance out with conventional when employment income situation or qualifying income situation changes post closing

    3) this may not work if you dont have it signed as " Daniel Tansill or Assigns.." do you remember how you signed the builder contract? Also look at the builder contract to see if it talks about an assignment of contracts or if it allows it. I would recommend an attorney on this end.

    4) You could but they will usually require 20-30% down payment do you have that to close with HML?

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