I had a few process questions about wholesaling. I am wondering once you have property under contract at a discount from the seller, how long do you have usually to then turn around and find your cash buyer to assign the contract to? Is it usually whatever the inspection period is? If so, what happens if I can’t find a cash buyer within the inspection period? Would you just extend the period or cancel the contract? How long typically is the inspection period that wholesalers use? Are wholesalers typically transparent with seller that they plan to assign the contract to another buyer?
Sorry for all of the questions at once, just wanted to clarify how it unfolds after getting contract with seller. Appreciate any of the insight into this! Thanks!
Think of yourself as the facilitator in the transaction. The period/terms are whatever you can get the owners to agree to. If you do not find a buyer, the contract date can be marked through, then extended with your initials and owners initials. Periods can be 7, 14, 30, or more days, but your goal should be to close as soon as possible with an end-buyer. A fast closing without repairs is usually a ‘feature’, or attraction in a wholesaling transaction.
Yes, you always want to be transparent with the sellers by putting ‘and/or assigns’, or and/or assignee’ after your name, or your entity’s name on the purchase agreement. Just mention that you are doing this, because you may want to bring in a money partner with you....or you’re thinking of bringing in a money partner, especially if you’re not using a transactional money partner.
I’m confident that you can find a buyer in a local Facebook group of investors, and/or in your local reia.
I won’t say good luck this time, because I know you’re going to create luck by being a great facilitator.
Hope this helps,
@Anthony Davis Awesome advice, thanks so much for breaking that down in detail. With those questions answered I feel better prepared now to go out and get after some leads!
no no no you are doing it wrong.
Look up "The Forced Traffic And Conversion Strategy". Google it
From your question it sounds like you are doing it like so many other "Wholesalers" are doing it.
You do not hide the fact you are going to wholesale it. You do not pretend you are the buyer and then run to find a real buyer. If someone did that to you, you wouldn't be happy. I don't understand how so many of BP users do this to others.
I will write this off (this time ;) ) as "you didn't know, not your fault, because you are surrounded by clowns that do it wrong".
Now listen up buttercup.
You tell the seller .. listen I am NOT going to buy your house instead I am going to wholesale it.
See I can either buy it myself as a flip and I will need to put new flooring, granite, remove this wall, new kitchen ohh a new roof and updated bathrooms, and it will cost quite a bit.
OR I can put it under contract for 4 days. send that contract to all my investors on my list.. what did you say?? Why??
Ohh easy, see I am a flipper, and there are a ton of other investors that do buy and hold... see THOSE (sissy) investors are not man enough to take on a flip, they just buy the house make it livable, a simple carpet clean a paint job and they are done, to put a tenant in for passive income., They have far less repair costs and their business model is different.
They can offer you a lot more for your house.
I can either offer you X for it, or we can put it under contract for like 4 to 5 days, for a higher offer. If no one bites within those days .. heck you just lost a week, no big deal we tear the contract up and done. If there ARE bites, we then know the price was right and then we can extend the contract for 2 weeks, enough time to close.
Do you really think the seller will chose option 1 if they have the possibility of getting more in by just 4 days waiting?
If they want to see now with you (rarely happens), be sure you can buy it (hard money ) Or tell them the truth from the beginning.. meaning tell them you want to wholesale it... instead of giving them 2 options.
Either way this is the golden rule. NEVER get anything under contract if it is not a home-run deal.
As long as you do that you can't go wrong. There WILL be a buyer for the house I PROMISE you this. So even if you are forced to buy it through hardmoney, the deal IS a good flip for you AND you WILL sell it immediately to a back end buyer so this is pretty much (almost) guaranteed fool proof!
SO now, to answer your question...
How many days? As many as you like. As many as the contract says. That is up to what ever you agree with , with the seller. Don't use a lame "inspection period" to trick anyone into jumping out of the contract if you can't find a buyer. That is SUPER lame!
Transparency and honesty ALWAYS wins the race!