Maybe my first deal?

9 Replies

Hey Everyone,

So I have a lead from a friend who says the house next to them is for sale by owner.  What I gather from him is that it is a group of brothers and sisters that have inherited this house and it is free and clear.  I have an appointment to go see the house tomorrow and I have a couple of questions about how to proceed.

Another friend of mine (and the friend that gave me the lead) is a realtor and talked to them about listing the house.  They flat out refused and said they would only sell it by owner and didn't want to list it.  My question is this, I have a buyers list and I think some of the people on it may be interested in this property, I will know more once I see it.  Do you think I should explain to them that my intention is to shop this house around to cash buyers, who will pay my fee, and we can hopefully close quickly?  They seem to be motivated and the price they gave me over the phone is already pretty good without any negotiation, which will hopefully lower it.  

This may be a stupid question, but it seems unethical for me to offer them cash and tie up their property for 30-45 days without explaining my intentions.

Thoughts?

Nick

Your a wholesaler, which some don't think so but I do, your a real estate investor. You don't have to explain your situation to the sellers. And if you put it under contract and it's not moving them as long as you have your out clauses in there and you can't sell it then no harm no foul. You'll never get a deal sold unless you try. If you are thinking that you will have a deal to give to your buyers then go for it. Just make sure that the numbers work. 

Just as you'll never get a date without asking, you'll never do a deal without talking to the seller (absent an agent representing them). 

What's tge worst that can happen? They slam down the phone or refuse you at the door?

Here's the attitude to take: you have a problem and I have the solution. Lets talk.

Investors buy and hold assets with the intention of creating a vehicle. Flippers are speculators. Wholesaling is not investing. It's lead generation. If you can tie it up and close, it's ethical. If you can't, you're a bird dogger. 

As a wholesaler you should really try and only have the property tied up for a few weeks. After all, thats the biggest solution you provide to a seller. Being able to move their property FAST. Having a buyers list is one thing, but having a fast acting buyers list is another and its something you should strive for. 

As far as the whole "I'll Buy You House For CASH" thing goes… With the exception of a seller financed deal EVERY real estate transaction is a cash transaction. Regardless of how a deal is funded the money (cash) gets wired to your title company or closing attorney. Even if the funds are from a conventional loan, the transaction still has cash being wired into escrow. Only its cash from the bank, but it's cash none the less. So is it unethical to say you're paying with cash? Absolutely not. It's a term used for marketing, and often times people think that when you're buying something for cash that you're tapping into your personal bank account. Which isn't always true. 

Thanks for the replies.  I think you guys are right, this is what a wholesaler does so I should just try to get it under contract at the price I think I could make things work.  Thanks.

The out clause thing is making me nervous, because this is my first time drawing up a contract. 

Can someone maybe cut and paste an example of an out clause from a contract they use so I can be sure my contract is solid?  

"Agreement Subject to Partners Approval" (my favorite)

"Agreement Subject to an Acceptable Appraisal By Buyer"

"In the Event of Buyers Default the Deposit Shall be the Sole Remedy"

Thanks Brandon!

Also keep in mind that you should know quickly if you truly have a deal or not.  It will not take 30-45 days to find that out.  If the deal is good you will know within a couple of days, a week a the most.

Originally posted by @Rick Harmon:

Just as you'll never get a date without asking, you'll never do a deal without talking to the seller (absent an agent representing them). 

What's tge worst that can happen? They slam down the phone or refuse you at the door?

Here's the attitude to take: you have a problem and I have the solution. Lets talk.

Investors buy and hold assets with the intention of creating a vehicle. Flippers are speculators. Wholesaling is not investing. It's lead generation. If you can tie it up and close, it's ethical. If you can't, you're a bird dogger. 

Investors buy and hold assets with the intention of creating a vehicle. Flippers are speculators. Wholesaling is not investing. It's lead generation. If you can tie it up and close, it's ethical. If you can't, you're a bird dogger.

Good quote!! I'll have to remember this..

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