closing costs question

9 Replies

something I hadn't thought of but I'm assuming when you negotiate a contract you have to work in closing costs details. how is it normally done on property you are going to assign? buyer pays all closing costs? I haven't done any contracts but I would hate to do one and then have it fall through because i overlooked the closing details

ahh thanks brutha, i'll have to have a look at that....guess I actually have to walk into a walmart :protest:

i never thought about closing costs till I was discussing the property I wanted for my own house and the realtor asked about how I planned on working out closing cost and I was like ummm, uhhhh...

I'm trying to get over the fear of the unknown and just drop a bunch of offfers on some condo/townhouses in my neighborhood. I forsee a big demand for rental units looming on the horizon

Thats a real good book you guys should also try getting the Short Sales book by the same author and the "How to make money on abandoned properties"....HAPPY INVESTING.. :beer:

Jorge Espinoza
Real Estate Investments

" :superman: Natural Born Go Getter" :superman:

I have been studying Vena Jones-Cox's wholesale course (which I would highly recommend) and she does not try to adjust for closing costs. According to her, the cost range is too wide and the buyers are happy to take care of it as long as their profit is still there.

I bought mine on eBay for $300 (basic and advanced) and there's currently a "buy it now" that has both for $100. Don't buy one without the other, eventhough the advanced course is lacking a bit.

I am sure there are many reading this blog who could give more info that I can (and from experience), but it will be good experience for me to take a stab at answering your question.

Basically, wholesaling is a good way generate immediate cash that can be hard to come by through other means of investing. It is a good compliment to a rental or flip business. For example, if you need to put a new roof on your rental and don't have the cash on hand, wholesale a deal (and save some for the IRS). If you are going over budget on your flip, there you go... Don't get me wrong, she does run the wholesaling business to stand alone, but states that it should not be the only trick up your sleeve.

In fact, the advances course discusses the use of financed flips, where you negociate owner financing for your end buyer. This opens your buyers list to investors who may not be able to purchase the property as a cash only deal. Those buyers will be willing to pay slightly more for the property which translates to money in your pocket.

She uses different formulas for different situations. Aside from the basic 70% arv - repair - your fee = MAO, she has formulas for homes that are <70K>$140K or need more than $50K in repairs, etc. For the sake of not having her people hunt me down, I will hold off on posting those.

One thing I dislike about her philosiphy.... She does not tell the seller what her role in the transaction is. She doesn't lie, and to her, that is good enough. She says "my partner" or "my money guy" and never clarifies that she is merely the 'middle man' who plans to assign the contract to an end buyer for a fee. Granted, the seller has agreed to sell for X amount, and it shouldn't matter how the profit is divided in the end, but I don't want to practice deceit or do anything I will not be proud of.

Lots more, this is getting too long though.

Maynard,

I agree with you. I don't think it's cool to keep secrets. I'm not too experienced so I can't say what's best for the investor. But I know one thing, I wouldn't be too proud. That's not good for my mentals.

Originally posted by "maynard76":

One thing I dislike about her philosiphy.... She does not tell the seller what her role in the transaction is. She doesn't lie, and to her, that is good enough. She says "my partner" or "my money guy" and never clarifies that she is merely the 'middle man' who plans to assign the contract to an end buyer for a fee. Granted, the seller has agreed to sell for X amount, and it shouldn't matter how the profit is divided in the end, but I don't want to practice deceit or do anything I will not be proud of.

Lots more, this is getting too long though.

Until the deal is done it is hard to say what role she is playing. If the seller likes the offer and the deal closes then the role is not that important (as long as she plays a legal role).

Being evasive will set off most sellers. Telling them that you are doing X and then finding out later that you are doing Y is almost as bad.

John Corey