double close and tax delinquent

[Account Closed]

I have a question for the BiggerPockets family. When I have a property under contract and I am going to wholesale the property. When doing a double close can I use the same contract that i used with the seller or do I need to have a complete different contract style to fill out with my new buyer? And also when wholesaling property's with back taxes on them do I need to have a specific clause in the contract that allows me wot buy the home with back taxes on them so the taxes will get paid off at closing by the buyer. and back taxes will be included in purchase price.

[George Taylor]

Well it depends on your profit from the transaction and the buyers funding. If he's using a hard money loan then his lender would be responsible for paying your assignment fee. Our company will only pay assignment fees up to $8k. Anything above that we require the wholesaler to do a transactional loan. That protects you as being the facilitator of the deal by you getting a loan to purchase the property and then double close to the end buyer. That way the end buyer doesn't wait out your contract, with all of the sellers information and go directly to them. I've come across that before several times. Also, if you are looking to make a hefty product, your end buyer might do this deal but might not work with you in the future. One example is for two TF loans I'm doing the end of this month. The wholesaler is making $60k profit on each of two deals profiting him $120k total. If his end buyer knew he was making that much of a profit their feelings might get hurt and it might cause some major headaches for them both. A TF loan ,asks your profit and makes sure you get paid in the case the buyers doesn't want to honor your contract. 

Also, another thing to think about when exploring TF loans. Some contracts aren't assignable and you would have to get the TF to legally do the deal such as all HUD properties. My old partner and I flipped several HUD properties to end buyers and investors and since they are non-assignable contracts we had to go the TF route to be able to make it work without us buying the property and having to season it to be able to sell it.

I recommend anyone who wholesales properties to at least run a deal by a HML to get their opinion on it. If you would like more information on this then shoot me a PM and we can talk more.