How exactly do I close now that I have a contract?

Wholesaling
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How exactly do I close now that I have a contract?

Parish Benoit
Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes

Help! I'm new and I dont know what to do. I just signed my first contract for a wholesale flip. Now what?  Do I call a title company and ask them? I dont think I need an attorney for this transaction but what do I know. 

I'm in Texas if that matters.

All comments are appreciated.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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@Parish Benoit

  Geez don't you think you would have wanted to learn what to do before you went and tied up some poor person home... this really is not the way to go about it..

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  • Kiara Justice
    Real Estate Agent · Hampton Roads, VA · Member since 2014 · 6 posts · 21 votes
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    Call this the blind leading the blind, but my understanding thus far is the contract assigned to an end buyer.  Once both contracts are in hand, then take to the title company.  

    Like I said, call it the blind leading the blind, and I hope some of our more experienced counterparts hop on here to help us out...lol

    Good luck on your first deal.  Right now, work extremely hard to find an that end buyer/investor with the cash in hand.  Don't forget to report on your results... 

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  • Steven J.
    Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
    11y

    Hopefully, your contract that you signed had some verbage that allows you to assign the contract. That would include '(your name) and/or assigns' or an actual clause that allows you to assign the contract. Then you need to find someone with cash that can buy the contract from you using an 'assignment of contract.' This document transfers your right to buy the property to another person (by assignment) for your assignment fee. That is where you make your 5k that the gurus promise you will make. 

    Find your cash investors, market hard, and close this deal!

    1Reply
  • Christopher Todd Stephens
    Real Estate Agent · Clarkrange, TN · Member since 2014 · 24 posts · 5 votes
    11y

    I've done four deals and all four where fairly simple...

    1. Find a seller

    2. Have seller sign assignable contract w/ exit clause.

    3. Find buyer.

    4. Find wholesaler friendly title/escrow company.

    5. Take buyer to title company to sign assignment contract and collect non refundable deposit.

    6. Keep contact with seller and buyer and let them know of the closeing 

    When the deal closes you can collect the check at closing or wait for it  in the mail.

    Now this is the process I've been through I guess it maybe different in different situations.

    Hope that helps.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Parish Benoit

      Geez don't you think you would have wanted to learn what to do before you went and tied up some poor person home... this really is not the way to go about it..

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Al Wilson
    Investor · Daphne, AL · Member since 2014 · 1k+ posts · 242 votes
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    Agree with Jay Hinrichs
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  • Gilbert Dominguez
    Investor · Chicago, IL · Member since 2015 · 677 posts · 309 votes
    11y

    I know everyone hates paying attorneys but in cases like this when you are working on your first deals it would help to hire an attorney to make sure the forms you use will protect your interest and truly allow you do what you have in mind. 

    Typically if you are buying whole sale houses it means you probably do not have that much cash on hand so you can ill afford to get hurt financially or to get bogged down with problems that will diminish your joy of being involved with real estate deals. 

    There is plenty of information here and resources to make sure you understand fully what you are getting yourself involved in and the complete process of your particular kind of deal so do get yourself educated as best you can before doing deals. Wanting to know the process or what you got yourself into after you have already signed a contract is the wrong time to try to get educated about what you are doing. 

    You would not be in a hurry to put your hand in the fire knowing you would seriously hurt yourself so take your time and do only what will truly benefit you. Keep in mind that real estate investing is all about making sure you will do things that are of benefit and not detrimental to you. 

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  • Parish Benoit
    OP
    Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes
    11y

    I got the Purchase And Sales Agreement from a home study course. In the course however, it was not spelled out exactly what to do once I have the agreements signed by seller and end buyer. This house has been abandoned by renters that trashed it and left all their crap inside. The owner does not want to mess with it. I am doing him a favor.

    I spoke with a title company yesterday and sent them the form to let me know if they can do this type of "double close". I should know something this morning so I can now let my buyers list know I have a house for sale.

    Thanks for everyone's input. I'll keep ya'll updated.

    0Reply
  • Rick H.
    Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
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    Well, I have to agree with Jay and Al, however I remember what it felt like when I was doing my first deal. 

    The course I took was woefully inadequate and, while it provided a very generic contract form, I had no idea what to do with it after getting it signed. Just how do I close?

    I found a title company that sold me a preliminary title report and agreed to record my deed. No escrow, no insurance. I later figured out that I could record deeds myself.

    I also later figured out how to read a prelim and what those exceptions mean. 

    And the value of title insurance, etc.

    3Reply
  • Parish Benoit
    OP
    Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes
    11y

    This is where I'm at today. I've listed it for 1 day and I have 2 different buyers.

    1. Investor will pay all cash now. I make 10k and I'm done, need to find another house.

    2. Buyer w/ 20k down and can pay 1k/mo. I will have to renegotiate with home owner and get him to accept terms now that he wants the big check we have agreed on. Im pretty sure I can change his position. I can offer to pay him $750/m (he was accepting 700/mo rent) to accept terms.

    To the #2 guy, I would raise the price another 10k just for financing because this is listed as a wholesale deal all cash. Im sure he will take it.

    I feel I have complete control of this with the home owner since the house was not even listed for sale. 

    Take the 10k now or go with terms that I really have no clue about but will get an attorney to close so my *** is covered. 

    Im torn. I know the money is better with terms but im new and i think i need to walk before i run. flipping is easy and not complicated. Terms is complicated but way more profitable.

    Lets hear it from all of you....

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  • Victor Menasce
    Developer · Ottawa, Ontario · Member since 2014 · 212 posts · 169 votes
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    Title companies may be willing to record the deed. But if you don't buy title insurance, and if you don't give your buyer title insurance, you may not have a truly marketable title. No bank will lend against a property that doesn't have title insurance. Some title companies are bowing to bank pressure and will refuse to insure title in re case of a double close. Do your homework.
    0Reply
  • Parish Benoit
    OP
    Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes
    11y

    go with the 10k profit now and be out or make terms and stay ivolved to make more????

    0Reply
  • Yasmine Bisumber
    Realtor/Investor · Ft Lauderdale/ Miami Florida · Member since 2015 · 311 posts · 104 votes
    11y

    I am super new but because it is your first deal I say keep it simple and learn from it. When you move onto your next home take it a little slower. Just my .02

    -Yasmine

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  • Tammy Vitale
    Investor · Lusby, MD · Member since 2015 · 121 posts · 36 votes
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    don't get greedy.  your first thought was to wholesale.  Don't change that thought in midstream.  You haven't thought it all the way through (either).  Take the 10K, do some more studying and apply what you've learned and you have $ in the bank for your next deal.  There will be a next deal at some point.

    Next time determine your exit plan before you start and you will know how to proceed.

    I do buy and hold, not flip or wholesale but "don't get greedy"  hold for everything.

    0Reply
  • Parish Benoit
    OP
    Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes
    11y

    Sold the house the first day I showed it yesterday! Yea!! I received $500 down and will walk with $9500 at closing. Today I Met with the closing agent  I have been talking with on the phone and we ironed out some specifics. This was a great first deal. I learned a lot and will be more efficient next time. 

    Not bad for a laid off oil driller.

    Time to get another house.

    2Reply
  • William Manzie
    Fort Lauderdale, FL · Member since 2015 · 49 posts · 9 votes
    11y

    congrats with your first deal. 

    0Reply
  • Carolina E.
    Investor · NW Indiana · Member since 2012 · 833 posts · 197 votes
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    @Parish Benoit Congrats! Good that you went with the 10K.  So I take it you just did an assignment?

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  • Tammy Vitale
    Investor · Lusby, MD · Member since 2015 · 121 posts · 36 votes
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    YAY!  Congratulations!

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
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    Have you done any kind of preliminary title search yet?  Distressed sellers have a habit of forgetting about mortgages, liens, judgments, their ex wife is still on title, etc.

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  • Victoria Lorick
    Investor · West Palm Beach, FL · Member since 2015 · 20 posts · 4 votes
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    So.. I'm VERY new and have been reading a TON of stuff here. Tammy Vitale you asked about a pre- title search? Is there a checklist somewhere so that I don't miss any COSTLY STEPS like that?? Thanks!
    0Reply
  • Victoria Lorick
    Investor · West Palm Beach, FL · Member since 2015 · 20 posts · 4 votes
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    Sorry I meant WAYNE BROOKS 😳 Oops! Lol
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  • Jay Johnson
    Pelham, NC · Member since 2015 · 160 posts · 54 votes
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    That's how you do it! Take the 10k and, go on to the next deal.

    Congratulations!!!

    0Reply
  • Jeff McCaskey
    Investor · Isabel, KS · Member since 2015 · 247 posts · 85 votes
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    @Parish Benoit

    BAM...!!! Way to go!!

    0Reply
  • Parish Benoit
    OP
    Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes
    11y
    Originally posted by @Carolina E.:

    @Parish Benoit Congrats! Good that you went with the 10K.  So I take it you just did an assignment?

     While discussing this deal with my title agent yesterday I had concluded an assignment would be the route to go but once I got home and really thought about it I have asked her this morning to show me the numbers doing a double close. I have a really hot buyer who wants more houses. I did not allow negotiations on the price I sold it to him. If he knows then the next deal he will know he can negotiate.

    0Reply
  • Parish Benoit
    OP
    Wholesaler · San Angelo, TX · Member since 2015 · 20 posts · 7 votes
    11y
    Originally posted by @Wayne Brooks:

    Have you done any kind of preliminary title search yet?  Distressed sellers have a habit of forgetting about mortgages, liens, judgments, their ex wife is still on title, etc.

     What preliminary work do you do? My title agent has started title work today. 

    0Reply
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