Questions on the Wholesaling process

5 Replies

OK. So I have been doing a lot of research and reading on wholesaling. I have not yet done any sales or assigned any contracts. I have been trying to get as much information as I can before I actually get into it. 

So my question is this:

What happens after you get a property under contract. I understand that you need to then find an investor buyer to assign the contract to but I have noticed some mention of having to send the contract to a Title agent or having it in escrow.

What is that process and what is the meaning of escrow?

Also what happens if you get a property under contract but you cannot find an investor buyer for the property? are you then liable for having to purchase the property or is there a clause in the contract to avoid such an issue?

Originally posted by @Blake Reynolds :

OK. So I have been doing a lot of research and reading on wholesaling. I have not yet done any sales or assigned any contracts. I have been trying to get as much information as I can before I actually get into it. 

So my question is this:

What happens after you get a property under contract. I understand that you need to then find an investor buyer to assign the contract to but I have noticed some mention of having to send the contract to a Title agent or having it in escrow.

What is that process and what is the meaning of escrow?

Also what happens if you get a property under contract but you cannot find an investor buyer for the property? are you then liable for having to purchase the property or is there a clause in the contract to avoid such an issue?

So I am no pro on this. Escrow is the closing company that handles all the paper work and $. Once you have a signed contract you will need to send it to your escrow officer. Once you find a buyer then you will send the assignment contract to your escrow officer.

You will probably need to put earnest money down once you have the signed contract this should be $500-$1000 dollars. now if you don't find a buyer you could lose your earnest money.

I am very new to this process so take this with a grain of salt.

@Elliot Smith

Thank you, that makes a little more sense now. 

So does the earnest money go to the current homeowner once the contract is signed or does it go to the closing company?

@Blake Reynolds

It goes to the escrow company. its there so if you don't hold up your end of the contract the seller gets something for the time you took.

Blake -

I went to a local REIA meeting and the investors told me exactly what they wanted. How much profit they needed per deal, how much they pay ( 70% of ARV in some areas and 75% in others). They even gave me a copy of the property analysis sheet they use to determine if it is a good deal for them.

  To make a long story short ... I know exactly what they will buy. Find buyers who will tell you what they want.

@Darrie Bennett

Thank you for the advice! 

I am planning to attend one of my local RI meetings soon. I hope that will be a big step towards making some connections with investors in the area. 

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