I found a homeowner that is willing to let me wholesale their property.. how do I get a good contract?
There's no such thing as a wholesale contract. You use a standard purchase and sale agreement and if you are assigning the contract, you use an Assignment of Contract agreement.
Ditto to Jim's comments. Not sure why you're trying to tie up a property if you don't have paperwork ready to go. Highly recommend you have an attorney draft up your docs specific to your state and don't search for free contracts online. There is a lot of liability in transacting real estate. Best wishes on your deal.
@Brandon Vukelich only one way to learn how to do something and it’s by doing. I know the lady and she’s letting me wholesale it just didn’t know the best way to get a contract written up, if I could make my own or if there were any on here that people recommend. I’ve bought several rentals but never wholesaled. Just trying to get my feet wet in it.
@Jim Pellerin do you make your own or do you have an attorney write it up? I know the lady so I have a few days to figure out the contact... it’s my first wholesale deal and just want to make sure I do it right. I’ll call an attorney tomorrow just didn’t know if there were any on here that people would share. Thanks Jim!
@Dylan Benton Do a google search on wholesaling contracts. Send them to your lawyer and ask him to review them. I find most lawyer-supplied contracts are too lengthy for wholesaling.
@Jim Pellerin do you just write up your own then? I just want one that’s cut and dry and covers myself!
Do a google search for the these 2 forms for your state ( but don't use them yet):
- Purchase and sale agreement -> (seller signs this form)
- Assignment of contract -> (Buyer/Investor signs this form)
Look for an attorney on BP and have them review the forms before you have respective subjects sign them.
You need a wholesale friendly title company - google title companies in your area, pick up the phone and go straight to the point , chances that you find one out of the first 6 are high. Learn by doing is the right way to go.
@Tommy Adeoye I appreciate it a lot. I’m looking for the forms now and am meeting with the home owner tomorrow morning to sign everything. I already found a seller so once the home owner signs the paper work I’m going to set up a closing. I appreciate it a lot. Thank you!
@Tommy Adeoye I had the owner sign a purchase agreement and I also created an assignment of contract.. where do I adjust the price from what the seller is selling to me for and what I’m selling it to the buyer for? In the assignment of contract?
At this point you find an investor (a.k.a. cash buyer) that would love to purchase the contract rights for this great deal.
You will assign this contract over to the investor for a wholesale fee. In other words, the investor is technically paying you a fee to buy you out of the deal.
The investor closes on the property and you receive your wholesale fee.
Go over the Assignment contract . You may find these fields:
1.) Subject property : Full address of the property you are wholesaling.
2.) Assignor :- Your/Your company name
3.) Assignee :- Your cash buyer/Investor credentials
A few other blanks in between but should not be difficult to figure out.
There should be a part that says :
Assignee shall pay Assignor an assignment fee of $ INSERT YOUR FEE HERE.
Keep in mind , you want to provide value to your buyer. With that being said, make sure you do your due diligence and put together a property Information package which would include but not limited to comparable, approximate repair cost, ARV , video and recent photos of subject property (if possible), buy and hold analysis, flip analysis. You want your numbers to make sense to ensure a quick close.
Your property information package should also show ( Price of Property + Wholesale fee) , you don’t have to show the wholesale fee . Lets say the deal works for both parties on the PIP, then send the assignment contract to the buyer.
Does this help?
@Tommy Adeoye thank you so much. Closed on the deal today. I made a profit of $6500 and put nothing into it. I appreciated the help.. going to be the start of something great!
Congratulations @Dylan Benton . I love it, Great job. Now unto the next.
Throw some of that profit in some REI books- invest in yourself , immerse yourself. You will do great things.