I believe I have the foundation of wholesaling but I still have a few questions and or concerns. I will explain in my own words with easy numbers and anyone out there please give me your professional feedback. I find a house for $10, in an area that the comps are $20. Thus I or my end buyer (investor) and inform them this property needs renovations/repairs to get the $20 mark which will cost $3. Now the end buyer will have to put in a total investment of $13. Once agree with my end investor, I offer the seller $7 for the property and closing in 30-60 days or once it pass inspection(s). Now I approach my end buyer and sell to him/her for $9.. Then he/her accepts my offer then I buy it from my seller for the $7 offer and I profit $2 on that deal. And my end buyer could potential make $7 from this investment.
Now my questions are:
-How can I ensure the end buyer do not simply contact the seller him/herself and purchase it for less?
-Here in Florida in order to collect a commission on a deal; one must have a broker (realtor) license, is that the case or that does not matter?
-Where can you find deals this low? Not for a few dollars but so low from market value that investors do not already know about?
-What if you can not find your end buyer within the allotted time, how can you ensure theres no penalties on your end?
-Does one have to put up funds to "hold" the property for XYZ days/weeks/months? And is that money refundable?
I look forward to hearing from any and everyone's feedback. Thank you for your time.
When you wholesale you get the property under contract and either close on it yourself or assign (same as sell) your contract.
The owner cannot legally sell to the investor while you already have it under contract to buy. Does it occasionally happen that an investor will go around you? Yes. Does it happen often? No. An investor is not going to burn his bridge with you by going around you if he wants another deal from you in the future.
You are not collecting a commission in this instance. You are reselling the property or getting an assignment fee for your contract. You have a legal interest in that property and can sell that legal interest.
Where can you find deals? That is the hard part. There are lots of threads here on finding deals do a search.
If you have GREAT deals buyers will be there. You risk losing you earnest money deposit if the deal does not close.
Generally yes you have to put up an earnest money deposit to hold the property. Generally no that is not refundable if the deal dos not go through. The details will depend on what is written in the contract.
@Ned Carey thank you for the feedback. I would also take your advice with finding deals. Take care. And I invite you to continue communicating with me in regards to whole selling.
@Duriel Taylor Also look up your local REIA Group real estate investment association, it is great networking & a great place to meet like minded people who don't mind sharing their experiences & helping you find buyers & great deals. My advice since you are new start with bird dogging which is the 1st step in being an RE investor it helps get you to wholesaling quickly you learn a lot. Well I did & now in the process of taking my business to the next level, wholesaling. Best wishes in your endeavors!!!
Always A Blessing,
thank you for your feedback. I will take your advice and execute my plans around those notes you made. take care and God bless with al your business endeavors as well.