I've been studying how wholesaling works for awhile, but I don't have a clear sense of how you get the property to closing and how you get your "wholesaling fee". For example- if I found a property for $80k and wanted to charge a $10k fee how do I go about that? Do I advertise the property for $90k? And how to you set up the agreement of sale so you are able to get out of it if you don't find a buyer? I wouldn't want to be in that situation but that would be good to know just in case. Any input would be greatly appreciated!
Howdy Kelly. Gonna hop in here before you get a lot of flack. You don't want to "set up the agreement of sales so you are able to get out of it if you don't find a buyer". You want to have other means to be able to close on the property if you can't "find a buyer". You want to make your offers such that it is a great deal for you to buy if you have to.
Typically you are wanting to pay 70% of the ARV (after repair value) - repairs and - your "fee". If you are truly getting deals that cheap you will have NO problems moving them. Where most people screw up and give wholesalers a bad name is not being able to close because they agreed to pay too much. Also I wouldn't count on getting 10k per wholesale deal. It happens but most people typically average at around 3.5k.
How I negotiate properties is by being completely honest.
1)Your house is worth ______ according to market value.
2)Your house needs ________ dollars worth of work to get that top dollar.
3) I don't work for free.
4)I can pay cash at a date of your choosing.
5)Knowing your house is worth _______ but needs________ what would you take as an all cash buy out with no contingencies?
Thanks Ryan! So do you use just a standard agreement of sale? And do you give the papers to an attorney before or after you find a buyer?
In MO my closings are handled by a title company no attorney involved. You will typically need to use a Special Sale contract if you are buying As-is.
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