Wholesale/Retail

8 Replies

I have a deal under contract for $42K.  I have a cash buyer ready to pay $46K (including fees).  I also have another buyer who has been pre-approved for a purchase, who has offered to pay $65K for the property.  I KNOW that I should close with the cash buyer, but that little bit of greed inside is telling me to take the chance of profiting $23k, knowing that ANYTHING can happen between now & closing.  I already know, but......HELP??!

Hi Scott,
What if you did a double play? First transaction would guarantee your $4K fee with minimum risk. But if you talked to the cash buyer and told him about a possibility of quick cash, he might agree to do it. If the $65K buyer can not close for whatever reason, you still made your $4K and your cash buyer can continue to march with their plans, but if you close on the second transaction, you can benefit again. Win-win!
Just a thought....

@Alisa  That's pretty smart thinking!

Nice, Alisa!

The problem you would have with the 2nd buyer, assuming you don't take the deed to the property yourself, is that their lender probably won't approve the loan on a double close.  And they definitely won't approve an assignment fee (unless their loan is a portfolio loan from a local bank).

At Daniel, that makes all the sense in the world to me!  Thanks

I am not a gambling man. I would go with the almost sure thing of 4k.  Four Thousand dollars is not a bad deal. Take the money and run.  Someone with cash usually has a few friends with cash also.  You are probably better off making connections with the cash buyer.

Originally posted by @Daniel Francis :

Nice, Alisa!

The problem you would have with the 2nd buyer, assuming you don't take the deed to the property yourself, is that their lender probably won't approve the loan on a double close.  And they definitely won't approve an assignment fee (unless their loan is a portfolio loan from a local bank).

 Hi Daniel, 

I see your point. However, if there is potential, I would fight for the double until it doesn't make sense. 

I would not recommend the $65K buyer to go to the conventional lender if they really wanted the property. Some unconventional lenders don't require 6 months seasoning. I would make an agreement with the $42K buyer to either drop the price by a couple of thousand or, better, pay for the buyer's points to make the loan comparable. I also would not include an assignment fee on the closing docs, it would be an agreement between me and the $42K buyer in writing. I realize there are a lot of variables, but for about $10K (for Scott) I would try. Stott would make $4K anyway, so by trying to do the double, he might gain a new cash buyer that would know that Scott doesn't give up and fights to the end to make money for both. There is a potential to make money twice and earn the relationship with a cash buyer for many years to come. I would not give up easily. When there is a will, there is a way, right?

@Alisa O. 

I thought your idea was a good one.... Hence, the "Nice, Alisa!".  Nothing I said was in disagreement.... just a warning about the danger in trying to wholesale to retail buyers, in general.  The biggest obstacle is usually the lender.

Originally posted by @Daniel Francis

The biggest obstacle is usually the lender.

100% agree!
I hate to give up a possibility of $10K, so I look for ways to elevate a relationship with the $42K buyer and make money with the $65 buyer.

Can anyone suggest creative ways to structure this deal to make money twice? It is probably after effect, but history repeats it's self. Thank you for everyone's input! :)

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