REI Questions for Wholesaler

2 Replies

I’m new at wholesaling and I would be appreciated if I can have some information on the process on closing a deal. Also, which contract is used for a double closing? And What are the different contracts that’s used in one deal.

Hey @Patrick Green  First, the process could be explained in these simple steps:

Step 1: Market to motivated sellers

Step 2: Sign purchase contract with the seller

Step 3: Find cash buyer

Step 4: Sign contract with cash buyer for a higher price and collect 2k deposit

Step5: Close Transaction via Assignment or Double Closing and Collect your check

For a wholesaler the contract is an extreme important instrument to structure a wholesale deal. It is where you control the deposit you put up; communicates your “out clauses” to protect yourself (here is my out clauses “ This contract is subject to partner approval”) in the evident you can’t find an end buyer. It is where you communicate your need for access to the property. This is just to name a few. The point I want to drill home here is that it is all about control. My rule of thumb is that if I am making 5k or less on the deal I will use an assignment. If I am making over 5k I will use a simultaneous closing. Here are the benefits and drawbacks of each wholesale deal closing. If you are closing using an assignment the benefit is that there are no closing costs. The drawback is that the buyer knows exactly what you paid for the property and the seller know how much you are selling the property for. This may be a problem if the seller or buyer thinks you are making too much money on the deal. If you are closing using a simultaneous closing the benefit is the privacy that seller does not know what you are selling the house for and the buyer does not know what you bought the house for. The drawback of a simultaneous closing is that you will have to pay closing costs when you buy the house and closing costs when you sell the property. Hope this helps.