what is the time frame of a wholesale

Question

What i understand when i find a property and start the closing process that i have to find a buyer who will pay the final amount. But what i don't know how much time do i have to find the buyer? in case that i couldn't find a buyer, do i have to get a loan??

Jason Cummins · Answer

Well said by wheatie.

You really need to work on a buyers list or have some options before you put a house under contract.

Generally speaking once you get the house under contract you have 30 days to get it closed.  This is generally and really can be worked out in your contract.  You write the dates on the contract, so if it's 30 days, its 30 days.  You can write 60 days, or 6 months if you want.

To wholesale you do not need to secure a loan incase you cant find a buyer. You should have a couple "out clauses" or "weasel clauses" in your contract to protect you just in case you cannot find someone to sell it to.

The most common clauses are the inspection clause and partners approval clause, ill give an example of both.

I am not a lawyer so make sure you have your lawyer inspect your contract and these clauses before you use them.

And just like wheatie said, if worst came to worst and you had to break your contract, the earnest money should be sole remedy of the seller, so make sure that you are structuring your deals with little to no earnest money.

Good luck

Jon Holdman · Answer

When you write a purchase contract, you put in the dates and time periods for certain actions.  One of those actions is closing.  If your intention is to wholesale the property, make that date way out in the future to give yourself plenty of time.

If you don't find a buyer, you have three options:
1) Weasel out of the contract based on one of the contingencies,
2) Get financing and close yourself, or
3) Break the contract and give up your earnest money.

If you're doing a contract directly with the seller, you earnest money should be small, so option 3 should be pretty painless.  You should, however, include a clause in your purchase agreement stating that keeping the earnest money is the seller's sole remedy in the event you don't follow through, and that they cannot sue you for specific performance.  That is, they cannot take you to court to force a sale.

All that said, I think you should have buyers lined up before you sign a contact and you should have a plan B on how to close.  Getting some seller on the hook for two months then saying "sorry" and walking away makes us all look bad, IMHO.