Novice question: what happens when you have the house in contract and you can't find a buyer? Do you stick with the house and hold it? Sell it... Etc...
There are two ways to approach this situation. If you have a home under contract and the seller was lead to believe by you that you would be purchasing the home then I say you purchase the home.
I would have approached it a little differently. I would have used a line something like the following, " Mr. Seller, I work with a network of cash buyers and I would like to be able to present your property to them for the next 30/45/60 days. If I am not able to secure a cash buyer within this time we can part ways as friends or we can discuss a price adjustment "
By doing it this way you have not committed yourself to actually buying the home an will not have to come up with some weasel way of backing out. They will respect you more if you do it this way.
Hope that helps. Good luck
Let us say you found a buyer, wouldn't the seller get frustrated to find out you made a profit of the deal? Wouldn't they just rather deal with the buyer? I'm still understanding wholesaling.
@Curt Davis that makes sense. Have you ever known any wholesalers to end up with the house in their possession(from buying it after not finding a cash buyer), and flip it to make a profit? Or is the whole end game for a wholesaler to get rid of the property asap?
For most wholesalers they cant or dont have any means of actually purchasing it. Myself, I have access to a lot of private money so when I do it I am usually negotiating a great discount for a fast cash purchase. So for wholesalers who know they dont have any money or private lenders, my approach mentioned above is the best way to go as it keeps everyone happy and no bridges were burned. Who knows, the wholesaler might be able to approach them down the road when the deal is better, if they would have hosed them they would have no chance at getting their foot in the door.
Alright thanks. That helps big time. You may also be able to answer this: I currently work at a family owned construction supply store, so finding contractors to evaluate rehab costs(and compensating them fairly) is not a problem. I'm wondering if there's ever just to high of a rehab number that should signal to wholesalers to back away?
Well if you are passing the deal off to another buyer let them make that call. I have purchased homes for $25k with rehab of $35k before. I am personally not a fan of fire damaged homes.
sorry for the million questions, but I really want to learn! When you or your peers have a buyers list, do you seperate out each buyer by what they would potentially want? Or do you always offer every single potential buyer the same property?
It depends, if I have one in an area they like I bring it to them first but on the other hand, you put it out to all and you could get a bidding war and go with the best price.
@Curt Davis is there an easier way to answer my financial questions(liens, etc.) about a property than paying a title company for every property?
I only pay for the search once I have a home under contract. I have not found any other way to get it done.
I don't agree with almost anything. If you are a wholesaler, you know your numbers, you know your market, you know your buyers. You buy when you can sell. If you can't sell, you are a BIG GUY and you deal with it. If you don't know these factors, you should not be in the business. This stuff about "I MAY buy it if I can sell it" is GURU stuff. I would never do that.
Real estate should be an ethical business. Occasionally, you may lose some money, but if you know your business, this will be infrequent. If you are an an ethical wholesaler, you will not get in the way of the Seller trying to sell his house.
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