Newbie Wholesale Scenario
Hi all, I'd like to run a scenario by you all and get feedback. A little background about me: I started about 6 months ago to look into real estate investing and about a month ago took my first actions mailing to notice of default lists in my area. I'm doing a ton of reading and want to see if I understand things. First, I know that wholesaling is finding a deal (make your money up front), get it under contract, then sell/assign the contract to a buyer.
The scenario I'd like to walk through: I've found a bank owned property that the bank hasn't had on the market. If I'm going to wholesale with little/no money of my own...
1 - I'd make an offer to the bank
2 - if they agree, I now have it under contract, correct?
3 - I now go find a buyer
4 - do a double close with the buyer first
5 - use the buyer's money to close on the house with the bank
I attended a real estate guru free seminar the other day and he said it's illegal to use your buyers funds and he need a private lender to give you a one day loan to complete the transaction. This contradicts what I've heard elsewhere.
Also, I've heard you can't wholesale bank owned property, but on a recent BiggerPockets podcast a scenario similar to this is described - are there catches to it?
Thanks in advance!