All Forum Posts by: Aaron H.

There's a couple ways to do it - sometimes, you do what's called a "double close" and you actually complete the transaction to purchase it, then the title company does a second transaction to sell the property from you to the seller, but they use the funds from the buyer to fund the first transaction.

Other times, you get paid directly by the buyer, just for your "wholesale fee", and they go to the title company themselves and close on the contract you've assigned.

Generally, you'd get paid by the title company after the buyer has finished their part of closing the contract - whether you're physically there or they mail you a check or you come pick it up can be worked out with them.

All of this is really just details that can be worked out/negotiated with the seller, the buyer, and the title company.

You deliver it to the title company. You NEVER give funds directly to the seller.

The reason there's a space for it is because you can use an attorney OR a title company - the point is you're using an "escrow officer" that holds on to the money and completes the transaction. So either put the name of the title company, or leave it blank. You don't need a personal attorney present, just sign the contract, take it to the title company along with the earnest money, and let them handle it.

Yes, it's legal. Yes, the company would be obligated to make the purchase if you didn't have a contingency to back out.

The title company will set a closing date - you and the seller both show up (or one after the other, you don't technically need to be there simultaneously most of the time), sign each half of your documents, and the title company will hand you a check or deposit the funds to your bank account.

I suggest you make an appointment with the title company and ask them to walk you through the process of closing a wholesale deal, step-by-step.

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Monthly Revenue - yes, you seem to have the basic idea down. $100/m/door is a pretty common target for net cash flow for a lot of BRRR investors. Maybe $200 or higher in some markets, but post-refi, it's hard to buy cheap enough to make thousands/door. You're gonna need a lot of doors. Note that it's also possible to use the same strategy on larger properties - that obviously lets you buy more than 1 door at a time.

Initial Investor - usually, you'd be paying off that "acquisition loan" with the money from the refi. If the refi isn't enough, you'd need to leave some cash in the deal and come up with the difference to pay off the investor. In general, if you're planning to use private/hard money on the acquisition side and want to do a full BRRR, you're going to need to buy even cheaper to afford the financing costs. So in your example, you'd want to buy the house at, say, 80K.

1% rule - It's only a guideline, mileage may vary. Getting to 1% is very difficult in a lot of markets (including yours, it sounds like). If the average price/rent ratio in your area is only 0.5%, you're going to have a hard time cash flowing on anything. That's just the reality. But if you find something that's 0.8%, maybe you can just scrape by. Or, you have to decide to invest in a different market, because the numbers just don't work where you live. Personally, I wouldn't touch a house with an ARV of 300K that I could only rent for 1500. You're going to lose money every month, almost guaranteed (at least, assuming a standard downpayment/mortgage).

In the current real estate market in many places in the country, it's nearly impossible to find a 1% cash flowing deal you can BRRR straight off the MLS. If they were that easy to find, more people would do it. That's why many people that do this successfully have to find off-market deals.

Read the Ultimate Beginners Guide linked at the top.

It's pretty similar to analyzing a SFR, just with more income streams and potentially slightly different expenses.

There's also several good books out there on multifamily analysis, e.g. Multifamily Millions.

You can customize any contract, yes. Shouldn't need an attorney to add standard contingencies.

I don't invest in TX personally, so I don't have a completed TREC contract - but if you contact your local title company, I suspect they would have a sample they could give you. They'd also be the best source for walking you through exactly what documents you need in your market to close the deal.

Company name - yes, it can say "Caleb's LLC or assigns" as the buyer.

Earnest Money - it's whatever you negotiate with the seller. Most of the time, sellers willing to sell to a wholesaler don't care, or you can do a nominal deposit.

Attorney - no, you don't need anyone there, it's a contract between you and the seller. If you want to feel more comfortable, you can talk to a lawyer or the title company for an hour beforehand and ask them to walk you through how to do it, but they don't need to be involved in the actual transaction.

Closing - whatever you negotiate. 30-60 days is typical, but you can offer any period to the seller that makes sense for both of you.

Backing out - If the contract you use has provisions for how/when you can back out (e.g. a "contingency"), then yes.

Most things on the contract are customizable.

@Tom Stone Start by checking http://biggerpockets.com/events - lots of them get listed on this site. Otherwise, google something like "Maryland Real Estate Investors Association" or "Maryland REIA" or etc. and some various groups ought to pop up.

It is - attend some local real estate meetups, do a little networking with some successful local investors, and then find a way to bring value to somebody in exchange for learning how they put a deal together. You'll get more from that experience than you will for anything you could do on your own with 5K.