Wholesaling Questions (Please Help)

IL · Member since 2011 · 12 posts · 0 votes

Hey, I am new to the wholesaling game and just have a couple questions and was hoping someone a little more experienced could help answer.

1.)Can you wholesale a property with a existing mortgage? If so does that make the transaction alot more difficult?

2.)I noticed alot of properties in my neighborhood while bird dogging that are forclosed and owned by different banks or businesses what would be the easiest way to contact them to try and wholesale the property.

3.) If you have any other advice that just can make wholesaling process alot easier please share. Any books, specific forums, websites, or videos. If you stay in Illinois in the cook county area or any where close and have time please briefly mentor me.
Thank You.

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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
15y
1. Sure. It will get paid off by your end buyer. Now, the mortgage is higher than the value, you'll have to do a short sale, which is a different can of worms.

2. Bank owned properties, aka "REOs", will eventually get listed on the MLS. You buy them just like any other property. They're more work to wholesale because the bank will not allow any sort of assignment. You typically need to use transactional funding or the "buy in an LLC and sell the LLC" technique.

3. There'a whole forum, the one you posted in, all about wholesaling. Read there and a lot of your questions will be answered.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
Like Jon stated, many of your questions can be answered by viewing and reading the already answered questions on wholesaling. A very good thread to read is this one:
http://www.biggerpockets.com/forums/93/topics/58383-the-truth-about-wholesaling-Which tells you how to wholesale the right way and not the wrong way.

Wholesaling is not easy, you must find deals that not only make sense to an investor, but have even more room to allow for your own fee.

Wholesaling REO properties is a more advanced form of wholesaling as sellers will require proof of funds (POF) via a real bank statement and you are bnot allowed to "assign" a contract so you must use other means (there are several others besides what Jon listed for you)

If starting out, I suggest you target absentee owners or FSBO (for sale by owner) and try to get a deal under contract that way. Typically, you can put in language which will allow you to assign the contract and make it easier and cheaper to do so, thus leaving more profit for you and/or room in the deal for your cash buyer.

Also, you will want to make sure you have a large buyers list and know what types of properties and criteria these buyers want. If you shop for what they want, you will have a much better chance selling to them.

Of course you can wholesale a deal that has a mortgage, it is no different than you buying a deal with a mortgage, the mortgage just has to be paid off via the proceeds before title can transfer. It does not make the transaction any much more difficult other than paperwork.
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