I found this site a week ago and I am having a hard time getting any work done because I am reading too much info on here. I am a licensed agent in Ohio. I am 24 yrs old and have been “selling” real estate for almost 4 yrs. Obviously the investing side of real estate is what fuels me. However ( I know everyone has heard this one), I have little cash and bad credit. I understand that I can still find creative ways to invest. Wholesaling is something that I find truly interesting. A few questions I have about wholesaling:
If I give 60 days to close and have an assignment clause, what if I cannot find an investor to assign the deal to? Are there any clauses that I can add to cover myself. If I cant assign it I can’t finance it myself. I would think that an option might work best, but I never see anyone say anything about that.
Would it be best to run an ad to build a buyers list before getting the first property “under contract”?
I really appreciate any help that you can provide.
I am tired of sitting on the fence reading about people being successful at REI, and I am ready to dive in and make my own success story.
You can build in one or two escape clauses…1)subject to partners approval or (2)subject to financing.
Since you want to assign the contract you may want to ensure you have a clause for “right to show”. This way you can walk other investors through that may want to purchase the property.
Alot of people use the subject to financing clause, however if you are looking for a general out the financing clause won’t work unless you truly can’t get financing and have more than one letter saying you can’t be funded for the property. Best to go with the partner approval or somethign to do with a favorable inspection report.
I would not recommend using any of the clauses as describe above for one reason. It will not make your offer appear as being strong and you will lose deals. I would not worry about it.
A ‘wholesale’ deal is anything below 70% of market value. If you are buying right, it should not be hard to find a ‘wholesale buyer’. Start building your ‘wholesale buyers’ list. This is very easy to do. Start looking in the newspapers for all the WeBuyHouses Ads and start contacting all the investors in their. You could also look on the internet. Just do a google search with this term: “WE BUY HOUSES”.
In terms of disclosing to the seller or realtor that you are ‘wholesaling’ the property, you dont want to do this. Simply tell them that you are going to be closing in your partners name. One other thing you can do is put in your contract “Vesting to be determined at closing”. If the agent gives you a hard time, just tell them that you may be closing in a Land Trust or your Corporation or even you private name.
In terms of backing out. You can always back out! Your home-inspector finds something wrong with the property, you have trouble getting financing, decided you dont like the neighborhood, etc… You just may forfeit your deposit. Like I said earlier though, if you are buying right, there should not be a problem.
Jeff,
I understand about the contingency clauses, but would you or can you, still insist on having the phrase and/or assigns in the contract? If not, when you get to closing does the clause you suggest, “Vesting to bew determined at closing,” cover that?