OK, so I'm new and I am reading and learning and marketing. Wash-rinse-repeat. I've even been involved in negotiations with FSBOs that have unfortunately fizzled.
For the seasoned wholesalers, my question is this...I get a seller to agree to my price and a small earnest money deposit(say $20), then what?
Can someone describe the mechanics in detail? Not how to get the deal, but what specific activities you need to do once you have the deal....contract to closing. Maybe as a newbie I'm over analyzing this, but much of what I see is 1. get under contract, 2. assign to end buyer and 3. get paid! But I know there are fine details between each of these tent poles that I just don't know and don't want to F up. :)
I wish there was a wholesaling flow chart!!!
Thanks in advance!
Ive only closed on one deal so far so not seasoned but I'll share in case it helps. Go over contract with seller and hv them initial every point on left margain. Take contract to title and give them EMD ($25).
Negotiate with cash buyer to assume my interest in property for a fee (assignment contract). I faxed them purchase agreement so they could know terms.
Send Title all paperwork, I also used an addendum to delineate certain terms of agreement (Who pays closing, misc fee, etc).
Manage seller, buyer, and title to schedule closing date and times.
Any further questions just ask. Many here with TONS more success than I
Great question I pretty much am in the same boat at you @ Christopher Thomas .... I understanding getting the contract it's everything that follows is a scary pulling your hair out time. You don't want to miss anything.
Thanks Russell, that is basically what I'm looking for. Did you have an attorney draft an agreement/assignment form? I downloaded forms from here, so I assume they're good to use.
I hear ya Windie! I'm very eager to close a few deals, but am very nervous not screw something up!
I had accumulated a variety of forms and ended up choosing some from JP Moses at REIology or something like that. I chose them because the language was clear and simple.
The first title company I went to declined to process the transaction. They admitted it was legal but wanted no part of it. I messaged some guys around town and found a really hip gal (title agent) who took care of everything. If I had any questions of logistics or procedures she would be the perfect resource.
That's one thing that has me confused. Obviously wholesaling is a widely used strategy. So how is it that a title company will refuse to do a wholesaling transaction? Is it their lack of knowledge? Do they really not know about wholesaling or are there severe risks that they don't even want to facilitate the transaction?
There is a thread "can wholesaling be illegal" that is going on right now if it intetests you to check it out.
Ive had lots of people look at me crosseyed when I mention wholesaling but you just have to find the right people. When I was trying to get started I stumbled around trying to network around town. I was so far from figuring out how the pieces fit together it was a joke.
But I will say this, you learn how to market and get a property under contract at a deep discount you wont have much worry getting people to play ball with you.
When you have the signed contract you have equitable interest in the property and you can sell your interest for a fee (assignment). You are not a broker you are a principal representing yourself.
Now thats the common understanding and NOT LEGAL ADVICE, Im curious myself as to other interpretations.
I actually did see that thread. I've noticed even when I explain it to friends, they look at me like I'm trying to scam the elderly or something. Lol
People get into situations where a property becomes a burden or they dont have the means or werewithall to bring it to retail condition. They trade equity for relief.
One reason Title Companies and Attorneys don't like assignments is there is not much for them to do and they can't charge to much. Had a big problem with this in Buffalo, NY. Ended up offering a bonus payment.
Attorneys are used to looking at RE Board Contracts, anything else requires them to do some careful reading . There is a big contract supplier that guarantees it will be acceptable in every state. For a few extra dollars you get a sample filled out as a guideline. Not sure if I am allowed to put links here.
Never thought of it that way Mike. Is there a way to message me the info about the contracts? I'd love to check them out
I do Assignments all the time on a wholesale Deal. Have a great relationship with your attorneys and buyers and you'll never skip a beat.
@Christopher Thomas - Here is a suggestion for future references and you can take it with a grain of salt. Try reaching out to your local REI club in your area. There will be times when you will be able to find a proper escrow company and title company that know what you are doing especially on the wholesale side. They will love to do business with you and can provide you what you need when it comes to closing. As for the documents on this site, I would recommend following it up with your local real estate attorney to make sure the wording on these contract will fly in your state.
Thanks Nixon. I actually joined a local club here in central PA and went to one meeting. It was "buy and hold night" so I was asleep in the back of class! Lol
Yeah, I called a title co a few days back and it seemed they weren't too knowledgeable in wholesaling. But I will follow up with some contacts I've made thus far to see who they use on a reg basis.
My best and favorite source to find professional services, has been right on LinkedIn. How many 100 million on there, I forget?. Everyone wants to be friendly and helpful (like here to) If there is a better resource on the net, no idea what it would be.
Good info . Thanks all
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