Houston Wholesale - Never Done A Deal This Way & Have Questions

6 Replies

Hi All, 

I'm not new to the concept of REI or buying homes but in terms of deals I guess you could say I'm still a rookie. I'm juggling this while closing on my FIRST investment property in my hometown of Cleveland, OH. I'm finally taking action which feels great! The problem is I've never done a wholesale and there are so many conflicting opinions on here about the legality of being a wholesaler, etc. I have a good grasp on ideally how it would work with me inserting myself as the middle man between distressed seller and cash buyer. However, I'm looking for a basis on if wholesaling is allowed in the state of TX, any advice you can offer and any resources for contracts geared toward this I can review beforehand.

I work as an independent contractor providing moving services on the side from REI & my full time gig. And while doing so this past weekend I bumped into some flippers with a beautiful partially finished project they are preparing to abandon because it is being foreclosed on by their hard money lender. The semi-funny thing is they actually took this project from someone else partially finished.


I have not worked out the specifics on what the mortgage balance on the home is, how much they have totally invested and what the foreclosure date is yet BUT once I do talk with them further and if the numbers work out I would seriously like to see if they will allow me to try and wholesale the property before it gets taken by the lender. The property is in a great neighborhood of Houston and the ARV is between 1-1.3M (it was actually on the MLS for around $1.4M at one point in time). I don't know what they purchased it at or how the deal was constructed but the sales information I was able to pick up shows the home was originally purchased for $143K. So to me regardless of how many nice finishes they put into the rehab there should still be plenty of meat on the bone for this one for everyone to walk away happy!

@Ryan Collins the best thing to do in this situation is talk to sellers get the hard money lenders info and then negotiate directly with the hard money lender. They don't want to hold on to the house. The seller is losing the house anyway. Win-win

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Originally posted by @Kevin Wood:

@Ryan Collins the best thing to do in this situation is talk to sellers get the hard money lenders info and then negotiate directly with the hard money lender. They don't want to hold on to the house. The seller is losing the house anyway. Win-win

Thanks for the advice that was actually one of the first things I did upon stumbling into them. So I could but I wanted to act in good faith even though I owe them nothing, I hate to see people get shafted on deals. 

I haven't had a chance to make anything happen on this because we've been short-handed at my full time job so I'll keep you posted on what comes of this, this week. 

@Eric Goodman thanks for the input. If I'm interpreting that correctly I believe it's reinforcing a lot of what I've been reading. Basically I would need to partner with someone who could actually purchase the home if things went haywire. So I'd have to do a co-wholesale on a deal like this for it to be legal.

Hey @Ryan Collins, how are things progressing with this seller and their HML? If you're still working this deal, I'll be in Houston this Friday, August 23rd, and I'd be happy to chat with you about it.

I'll PM you now.