Wholesaling a property

4 Replies

Entering into contracts with no ability or intention to close is FRAUD. What protects sellers from people like you?

Originally posted by @Roy Carlsen :

If I am unable to locate a buyer, will I be held financially responsible for the assignment contract?

This is what you need to do:  

First step is to make sure you understand the laws in your area regarding wholesaling. While wholesaling is legal in most states, several states have passed laws defining wholesaling as brokering and are requiring a real estate license to wholesale property. If you are considering staying in this business long term I recommend getting your license. This will elevate your stature as a professional and open up a lot more opportunities for you to monetize deals you can’t buy or wholesale.

You should talk to a real estate attorney that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you have a buyer who can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for. You will learn a lot about the business and the market by talking with cash buyers.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, google search, billboards and bandit signs. Some companies also run TV and Radio ads.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties with cash. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Some of best ways to find motivated sellers is to purchase lists from companies like listsource and or compile lists from city and county like 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, etc. Then you can mail or cold call or both.

Other cheap or free methods are driving for dollars, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites and bandit signs if allowed.

If you have the funds you can use billboards, newspaper ads, other offline publications., TV commercials, radio ads, motivated seller websites, SEO, pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online advertising and boosted/promoted social media postings.

Bottom line is integrity and consistency. You need to do what you say you will do and take consistent focused action every day, answer the phone when it rings and follow up and follow through.

Originally posted by @Roy Carlsen :

If I am unable to locate a buyer, will I be held financially responsible for the assignment contract?

Read @John Thedford post above.

Secondly, you should understand the entire contract and what each page is meant for. The assignment contract portion is used once you have the buyer, it is not for the seller. However, if you lock up a contract with intent to assign it and you have no intent to purchase if you don't find a buyer, you have likely broken state laws and you may very well be liable for that as the seller would have a very strong case against you.