Help! I am fairly new to the real estate investing business and I wanted to try wholesaling. I currently have my first property that I am ready to put under contract but I'm a little stumped. This property fits the 70% investor rule and 40% under market value after the ARV; however, I need help with my next steps. This is an email sent from the seller "Real Estate Agent"
Email: How about we split it down the middle of $61,750 and you pick up our closing costs? As a cash buyer, I'm assuming no inspections. We would like to settle prior to August 15. I will need proof of funds and when would you like to get the DE Agreement of Sale signed, as well as get a copy of the sellers disclosure?
I look forward to working with you on this transaction.
I think the proof of funds wording has me a little confused. I have done research last night but decided I should post this and see if anyone could help me with the answer or solution with this First wholesale deal.
List Price:$69,900. Thank you for your help and guidance.
Sounds like you didn't disclose that you'd be wholesaling the deal and the seller/agent are under the impression that you'll be purchasing it yourself for cash. In general, I think that's a bad move; I would suggest being completely upfront with the seller/agent about what you're doing. If they're not happy about it when they know what's going on, they'll be a LOT more unhappy if you try to deceive them.
While legally you can do what you're doing (assuming the contract gives you the ability to assign), it's typically considered bad form to not be upfront about your intentions.
Thank you, I thought I had explained that information thoroughly at the beginning of our interaction but apparently I did not convey the message initially.
It appears you've written your offer as cash. That implies you actually have cash in the bank to close. "Proof of funds" is a bank statement in the same name as was on the offer showing the money. If you don't actually have cash you shouldn't write your offer as cash.
Do you have a cash buyer lined up? August 15 will be hard for any conventional lender to meet.
No I don't but I was trying to figure out how to go back and explain about the "cash buyer" statement without losing this sell. Any advice?
No you don't have a buyer or no you don't really have cash? Or both? If you don't have a buyer lined up and don't have cash and the seller wants to close by 8/15, what's your plan to buy the place? I suspect you're going to have to let the one go and write it up to a learning experience. If you've already given the earnest money and don't have any contingencies you're probably going to lose that, too.
You could salvage the deal by finding a cash buyer who can close very quickly. If the contract doesn't allow assignment you'll need to find a transactional lender and do a double close, too.
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