Wholesale owner carry advice?

Question

Hey BP, I have come across a potential deal but the owner is wanting to do an owner carry but I’ve never wholesaled an owner carry deal let alone know if it’s even possible? It’s a 8 plex in good condition and fully rented and 2 run down fixer homes all next to each other in a pretty prime location where I live with new downtown development projects has anyone ever done something like this or know how to structure a wholesale deal like this? What’s needed? How’s the contract structured? Figured I’d see what kind of options are out there and info before going to my attorney.

Steve Vaughan · Answer

Whoa. No. Why would that be?

It's no different than a cash deal, but your buyer will more likely be a landlord than a flipper.

Get it under contract like normal, assign for the down payment plus your fee.

Make sure you are dealing with the actual owner, do your lien and title DD to ensure it's free and clear and don't accept a Land Contract. Ensure it's an actual mortgage/DofT so the buyer owns it day 1.

Wholesaling in theory may appear to work well for those low on capital, but it requires the most knowledge of any strategy out there especially when enterering SF waters.

Tom Gimer · Answer

Example:$1,000,000 purchase price

$100,000 down payment

$50,000 assignment fee

$150,000 cash to close (plus closing costs) - wholesaler gets his/her $50,000

$900,000 seller-held

Matt Devincenzo · Answer

I think an important question here is 1) why does the owner want to carry, 2) what are the terms of the carry (interest rate, pre-payment penalty, down payment desired)? If you can share some generic numbers that may help with some suggestions on the overall deal structure.

Paul Fagot · Answer

@Steve Vaughan

Paul Fagot · Answer

I just don’t have the capital yet to be able to tackle that size of property. Would the down payment be the purchase price? Or is this a different kind of contract?

Thanks for the feedback!

Steve Vaughan · Answer

Its really the same as any other.  Instead of all cash, the buyer will just need to bring the down payment plus your fee.

Any reason you don't want this for yourself?

Wholesale owner carry advice?

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