When wholesaling using Land Trust, there are are two forms that you use
1) Trust Agreement
2) Assignment of Beneficial Interest.
At closing when you are assigning the beneficial interest, is there a separate form to specify your wholesaling fee, where is this actually specified?
Also is there a step by step process to wholesale using Land trust.
Just wholesale in your personal name.
I've noticed a number of posts on BP concerning "wholesaling."
Many of these pick up some aspect that a clever promoter or course seller has told them, but miss the essentials as to how you make money.
Here's the play in a nutshell: you contract to buy a property for a certain price and terms. You sell the contract to another for a profit.
If you are uncertain how to document your deal, I suggest that you get the idea of being a wholesaler out of your head for the moment and try this new title: lead generator.
Your responsibility is only to find the deal, not negotiate it. You learn what the facts and circumstances concerning the property and it's owner is. You gather the pertinent information about the outstanding debt on the property (therefore the current equity). You ferret out the owner's financial situation and their plans for the money (relocate, pay bills, etc.). However, you role is to introduce principals (owner and investor/buyer).
You get paid by the buyer who values your "bird dogging" and you get to observe, to some extent, how the investor works.
The obvious advantage to this arrangement is that if you are newer to real estate and are unfamiliar with documentation, escrow and title, you don't have to negotiate the fine details of the deal, merely find the essential pieces.
Deal finders can realistically expect to make 5-10% of the profit of a given deal.
Caveat: your state may consider this to be an activity requiring a license, however even in my over-regulated state, CA ,this is an accepted practice.
This makes more sense to me than getting bogged down in negotiations, what to offer, terms, documenting, funding and closing the deal. Once you've gained more experience, you'll have more confidence in how to put a deal together, control it and collect a profit.
Thanks All, for the input.
I am not getting the answer I am looking.
I don't do this method, but I assume your land trust has a purchase contract with the seller, and you are assigning your beneficial interest in the land trust Prior to actually closing on the property, then the buyer uses their funds to close? I assume you have an agreement, similar to a purchase agreement, that specifies the price you are charging for transferring your beneficial interests (your assignment fee)? This fee isn't part of the real estate closing, so it wouldn't be on the HUD/closing statement. The buyer would exchange his funds for your execution of the actual assignment/transfer. Question: Why are you using a land trust, as opposed to simply assigning the purchase contract, with an assignment agreement that specifies your fee, which could be on the HUD?
The banks have made it difficult for a Wholesaler to assign properties with the deed restrictions and assignment clauses but using a Land Trust totally eliminates these restrictions allowing the Wholesaler to profit on EVERY real estate deal.
But you provided the correct answer and I am satisfied. A separate agreement to transfer the beneficial interest for which you charge you fees, of course this will not go on HUD.
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