Hello BP fam
Need Help wholesale deal Brooklyn NY Ditmas Park Area IM NEW
brief info on this potential deal
worth = 2.2M OR 2.1M
estimated cost of repairs - 200K
asking = 1.65M
1400 sqft 6 beds 6 baths
turns out the listing broker is part owner and he is willing to work with me for a good price . what's a good price to offer 1.35M 1.4M?
do you think he would consider $100 deposit if i mention i have end buyers waiting to see the offer and this is my first deal since he is an investor as well ?
how do i know if that is the actual value of the property ?
do i need to go to a title company or can i just get the property under contract and then assign it ?
How would i get paid my finders fee?
ANY ADDITIONAL ADVICE WOULD BE GREATLY APPRECIATED =)
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Tamika you need to get the property under contract WITH THE RIGHT TO ASSIGN. You also need to spend a few bucks and have the contract recorded at the kings county clerks office. You can then wholesale it.
@Keith Hawkins get it recorded? huh??? admittedly i'm not from NY but I've never heard of that nor have done it.
@Tamika D. you can determine value by finding comps. is it SFR? 1400 sq, feet and 6 bed, 6 bath??? jeez you New Yorkers live tight.
let me walk you through it step by step...it's actually rather simple (getting the buyer's is the hardest part - IMHO)
1. get the property under contract: make an offer and get it accepted. try for $1.35 and see what he says. DON'T LIE. if you don't have buyers lined up don't say you do. that will come back to bite your head off, guaranteed :) nothing is more irritating in the business than dealing with liars, deadbeats and tire kickers. BTW, the buyer in your purchase and sales contract should read "you, and/or assigns" not simply "you."
1a. instead of earnest money, do a promissory note due within 3 business days of the end of the feasibility period or whatever your "out" is. try for 30 days given the large amount. this way you have NOTHING out of pocket. $100 EMD is bizarre considering the price...to say the least
2. open title: call up First American (they are my fav) and simply say "i've got a property under contract and i'd like to open title." that's it...but also double check their cancellation fees just in case. once you get preliminary title back make sure it matches what you have in the purchase and sales agreement. send title the signed purchase and sales agreement, the promissory note and all addenda. DO NOT SEND THEM ANY ASSIGNMENT OF CONTRACT FORM. that will be done later. however, tell your title/escrow person you are wholesaling the deal and make sure they are aware of the process and cool with it.
3. find your buyer: they'll most likely want to view the property so arrange for an "inspection"
4. assuming he/she wants it, say that the contract is theirs for $$$$. given the amount, you might be able to get away with a lot...you then sign an assignment of contract, they give you a cashier's check for the fee and a check payable to title/escrow in the amount of what the promissory note is. then you send all the paperwork to title. or, you can have title/escrow handle the assignment fee at closing. i prefer outside of closing because then it doesn't show on the final HUD-1. if you have escrow handle it, once the buyers say they want it go straight to escrow together and sign everything there. escrow will know what to do - assuming you've been straightforward and told them your intentions well before.
5. wait for closing and/or transfer to be recorded before you spend your cash...just in case.
that's really it. and if you find a good title/escrow officer familiar with wholesaling it will make everything much easier. in fact, i think of it as a prerequisite to any wholesale deal.
I should emphasize that in step 4 there are 2 checks. one is your fee, the other covers the promissory note or earnest money deposit.
some people forget about the EMD and end up paying out of their assignment fee.
so...using a promissory note and confirming no cancellation fee for title protects you from having to spend a single, solitary dime.
Thank you @Patrick Britton that was helpful . with this particular deal the seller was an investor trying to make a ridiculous profit I did more research on it and it was worth about 750k. i have another one but i haven't talked to the seller as yet. i have phone fear. he has an agent im not sure if i can get them to use my agreement instead of the realtors. im going to look into how to create promissory notes that would be helpful. Thank you again . im good at writing contracts and clauses iv been studying i just haven't done a deal
with this particular deal the seller was an investor trying to make a ridiculous profit I did more research on it and it was worth about 750k
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