Buying a contract from a wholesaler and finance the home.

2 Replies

Is is possible to buy a wholesale home through normal financing channels, FHA, Conventional loans ect. If so what costs would be involved.

My plan is to fix my current home, sell it (I'll profit around $100K, not enough to buy and fix a home for cash), move into another fixer, have it fixed, sell it, wash and repeat.

My short term goals are to go from 1 fixer a year to 4 fixers a year. I live in Riverside County, California.

Yes, its possible.  However, you should expect to pay any wholesaler's fees yourself.  Conventional lenders will generally use the wholesaler's contract price with the seller as the "value" for calculating the loan.  If the wholesaler is doing a double close, be VERY up front with the lender about what's happening.  Otherwise when they get the title report, which will show the "seller" (i.e., wholesaler) is not actually the owner they may balk.  In general you want to be very up front with the lender to avoid any surprises at the last minute.

You may not be able to repeat this very much with the same lender.  Lender's making conventional loans do not expect to have them paid off in a few months.  They can't keep you from doing it, but they can refuse to make another loan to you after you've done it.  

Thanks Jon, I believe that more than anything I'm going to have to be a student of finance and really develop an understanding of loans and money./DC

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