Wholesaling RE in Michigan

Wholesaling
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Wholesaling RE in Michigan

Ander Lantigua
Member since 2021 · 16 posts · 1 vote

Does the seller have to know that I’m wholesaling when I wholesale in Michigan? Or should I double close ?

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Account Closed
Professional · Canton, MI · Member since 2016 · 296 posts · 230 votes
5y

@Ander Lantigua I think you should be willing to close on any property you get under contract assuming your due diligence outcome is acceptable. You should always be honest and transparent. “I will buy your property and am prepared to close. However, before I close I may try to find another buyer who is an even better fit for this property. If I do, I will assign them the contract. If they don’t come through, it doesn’t matter because I’ll still close.”

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  • Account Closed
    Professional · Canton, MI · Member since 2016 · 296 posts · 230 votes
    5y

    @Ander Lantigua I think you should be willing to close on any property you get under contract assuming your due diligence outcome is acceptable. You should always be honest and transparent. “I will buy your property and am prepared to close. However, before I close I may try to find another buyer who is an even better fit for this property. If I do, I will assign them the contract. If they don’t come through, it doesn’t matter because I’ll still close.”

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  • Ander Lantigua
    OP
    Member since 2021 · 16 posts · 1 vote
    5y

    @Joshua B. ok so I have to them let them know, Got it. Also what about double closing ? Can it be done without the seller knowing I’ll be finding another buyer?

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    For a double closing, you must have your own funds - you cannot use the funds from a buyer and close simultaneously.

    So, they seller will only know that you bought their property.

    [email protected]248-209-6824
    Logical Property Management4.9450 Reviews
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  • Ander Lantigua
    OP
    Member since 2021 · 16 posts · 1 vote
    5y

    @Drew Sygit So what should I tell the seller exactly? That I’m not going to buy his property ? Or that I’m going to buy his property?

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  • Ander Lantigua
    OP
    Member since 2021 · 16 posts · 1 vote
    5y

    @Joshua B. So what if I tell them I’ll buy their property and then I wholesale it without letting him know that I might assign the contract.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    @Ander Lantigua you should tell them their property will be closed on and then be prepared to do so if you can't assign the contract.

    Of course, you could lie to them and tell them you will close and then IF you can't find someone to assign your contract to you could walk away from the deal - but would you do business with someone that did that to you?

    [email protected]248-209-6824
    Logical Property Management4.9450 Reviews
    WebsiteView Page
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  • Saravanan Saravanan
    Lender · Troy, MI · Member since 2019 · 432 posts · 147 votes
    5y

    @Ander LantiguaBeing transparent is a key aspect in my opinion for running a business well over life time or generations to come.   If you are purchasing and then selling to another investor; then you don't have to say anything special.  However, if you are going to do an assignment of contract; then you have to put that in contract on both buy and sell-side.  Most title companies would need to see that for payoff during settlements.

    The objective of double closing by using transactional funding. In this case, the buyer or seller will not know the profit you make.

    FYI only: When the margin is small, say under $5,000 or under 3% of property value; then contract assignment generally is not a problem. When things get bigger; double closings are a better alternative.

    Best wishes.

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