Atlanta Wholesale Deal Lost..Seller won't do contract

Atlanta Wholesale Deal Lost..Seller won't do contract

Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes

Has anyone had a seller agree to your offer but does not want to sign a contract? I found a house off searching tax liens, and the seller is an elderly person who has a relative helping to get the house sold before the lien redemption ends(this month)

They refuse to do a contract, i even offered to make it just a week long, at least enough time to market the house, throw it on Craigslist whatever, as i know they have limited time.

I think they are trying to work other angles, which i can appreciate, and they seem eager to sell( i got them down to $10k + i would have to pay the 4500 lien) Recent solds show about 32-45k comps, and my agent says the area(moreland ave) is a lot of investor activity.

Today they told me "we'll do a contract once you have the funds ready, but we don't want to do all the contract paperwork, we just want cash upfront".

I explained i work with investors and I can't market the place without having a contract, and i wouldn't want to knowing they can sell it from under me.

Should i basically forget about it and move on?

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Dallas, TX · Member since 2013 · 4k+ posts · 744 votes

Offer the seller $2000 cash upfront non refunded if they let you put it under contact and that way they know you are serious.

Joe Gore

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Joel OwensBusiness Member
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
12y
What was the condition of the sold properties at 32k??

Are they buy and hold comps for rentals, flips, regular sales??

What I am getting at is this property is at 14,500 before your fee. If there are repairs needed to the inside for the end buyer the numbers might not work. Repairs could easily cross over the 10k mark and add in a 3k fee and resale costs and the property is at market value.
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Morris Lucas
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Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Good point Joel!

In it's present condition, i can't see it selling past the 32k, that may be the high end actually.

I'll wait them out, maybe i can come back in a week or so and get it at $3-5K if they get desperate and don't want to risk not getting anything.

By the way, how would you distinguish if a comp was for buy and hold vs. regular sale, etc, just by the buyer being an LLC?
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Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
12y
@Morris Lucas,

Offer the seller $2000 cash upfront non refunded if they let you put it under contact and that way they know you are serious.

Joe Gore
1 Reply
Morris Lucas
OP
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Nice tactic...lot of risk, though, if i can't get it sold
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
12y
Morris, if you don't have the cash to close, you need to have some REAL buyers...you should have them by now. I mean 4 or 5 guys that know you, and you could call them without worrying about them going around you. Sorry, but to me "throwing it on Craigslist" is bull sh$t, and pure amateur hour. I do not blame the sellers at for letting you tying it up, when it's obvious you can't close, hoping you sell it, and if you don't they've lost everything.
1 Reply
Jason Eyerly
Real Estate Agent · Charleston, SC · Member since 2013 · 424 posts · 99 votes
12y
Get a HML buy it yourself and resell if the deal is that good.
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Morris Lucas
OP
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
C'mon with the cursing it ain't that serious. So no one uses Craigslist anymore to market properties? The buyers I know don't like this type of section 8 area, I already know this. which is why i began by saying if i should just pass and let it get foreclosed to tax lien.
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Jason Eyerly
Real Estate Agent · Charleston, SC · Member since 2013 · 424 posts · 99 votes
12y
Buying it from a tax lien would be a cheaper deal with better return. Then you're guaranteed property or reimbursement. And if they're looking to sell then you've got a good shot at it being paid off fairly quickly. That's the route I'd take!
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Chris K.Pro Member
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
12y
Sounds like the sellers are hip to the game. Can't blame them for not wanting to let someone tie up their property to flip it to the someone else. Most of us who are familiar with the process would probably do the same thing they're doing and say show me the money!!!

If you're not going to put up some money then probably best to just move on.
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Morris Lucas
OP
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Chris K;

Can't blame them, but sadly, that's basically the basic premise of Wholesale deals...(tie-up to flip to someone else)

i guess there's not enough motivation yet.

HML may be the best play here as someone suggested, but would have to lower the offer considerably, especially after rethinking Joel's post.
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Xing Zhu
Durham, NC · Member since 2012 · 498 posts · 48 votes
12y
It happened to me once. The seller refused to sign the contract on terms agreed by him orally. It was a new luxury ocean front condo selling by the developer. He soon took his entire inventory off the market.
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Rick Baggenstoss
Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
12y
@Morris Lucas You probably need to partner with another wholesaler who can move the property.
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Morris Lucas
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Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Hey Rick,

That could work, but the fact that they won't sign a contract, even if i partner up, they could basically eliminate me out of the deal right?
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
I'm with the sellers on this one. They sound plenty motivated but aren't ignorant enough to let you tie it up. The sellers will have to accept that you won't be giving them cash at the kitchen table though. There will be an escrow or attorney that will prepare the deed and will disperse their funds

If it's a great deal at $10K buy it today for $10K. Call a hard money lender or find a partner. Wholesaling doesn't mean assignments and double closes. It's about getting a good deal and marking it up. Do what it takes to buy this low and sell higher.
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Account Closed
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
12y
Most sellers are getting educated because so many are getting rip off by wholesalers that only want to put deals under contract and not give the seller one red penny and turn around and sell their contract and screw the seller.

Joe Gore
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Morris Lucas
OP
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Joe;

Please explain how they screw the seller when they sell the contract?

i have already passed on the deal, so it doesn't matter anymore anyway, but I would like to see the moral side of the dilemma, as I know wholesalers who have sold their contracts to buy and hold rehabbers before. I was under the assumption that that practice was common, even amongst BP members.

If you personally pay for every wholesale lead upfront, wouldn't that make it impossible to continue wholesaling properties on a consistent basis, say if you had 5-10 deals a month? (unless you have enormous capital)

and even if you had multiple cash investors ready to purchase, is it ok to not tie it up first under your name?

Again, just asking for your insight, as I have heard conflicting things from prior posts. Thanks.
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Account Closed
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
12y
@Morris Lucas,

Let's say a seller let you put their property under contract for 30 days, and then you sell your contract to someone. What does the seller get at that time from you?

Joe Gore
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
12y
No contract = no deal. Verbal agreements are not enforceable. That is Florida law and falls under the Statute Of Frauds. I imagine there are similar laws in place across the country. If you really want the place and are sure you can flip for a profit you have to put some skin in the game. Otherwise what would motivate the seller?
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Morris Lucas
OP
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Joe;

I'm not seeing your point? I thought all the seller got in a typical 30 day wholesale contract was $10-100 in earnest money? If i flip the contract to an investor or double close or whatever, the seller gets their $ at closing...am i missing your point, i thought this was standard wholesale process...anyone else done this?

John...so your saying if not getting a signed contract you should pass right, unless you want to pay them cash upfront and flip it later or hold it as a rental? That's basically what i thought.
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Account Closed
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
12y
@Morris Lucas,

My point is your only want to give the seller 10 bucks and now. Why don't you sell your contract for 20 bucks you double your money but if the end buyer does buy the property, then the seller will get something. An honest wholesaler will at least give the seller $1000 upfront non refunded fee to put it under contract.

Joe Gore
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Morris Lucas
OP
Rental Property Investor · Atlanta, GA · Member since 2012 · 256 posts · 64 votes
12y
Joe, i don't mean to be argumentative, but i've read hundreds of posts on here and i have never heard of anyone giving a private seller $1000. I have only heard that kind of earnest money if it is an REO...are you sure you are familiar with this in depth, this doesn't sound right....

Also why would i sell a contract for $20? That doesn't even make sense, it would cost at least $150 to get an inspection done..?

Anyway, doesn't matter now anyway, I thought it was a good deal when the person called me, I will pass it along to some other Atlanta rehabber friend who may know someone willing to give him 10k in cash(may as well refer another investor if i don't want to purchase it directly, rather than have seller lose it to lien)

tough luck, i don't have 15k to part with at the moment.
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