anatomy of the flip - do i have everything?

I’m a newbie and am looking for some assistance on the flip.

I am making sure i understand exactly how the flip works before I begin. So, here is what I have compiled based on reading articles and pdf’s:

  1. create buyers list [this is in the works][no help needed here]
  2. contact seller, make offer, give earnest money deposit [if i am correct, the earnest money deposit must be at least one dollar.][is this true?]
  3. conduct title work on property [i plan on charging the seller for this - any thoughts on why i shouldn’t? being that i have little money i think this is the best option i have]
  4. contact buyers and qualify the buyer
  5. assign contract

after this step i am unclear as how to proceed. if I assign the contract for my fee, am I now done with the flip? (After collecting the fee from the buyer of course).

another question I have is: what is a good thing to tell the seller when your buyer comes to check out the property?

last question: my exit strategy is a clause that says something along the lines of: “dependent on investors approval” is this a good exit strategy?

thanks for any help you can provide. :slight_smile:

Well that’s one way. $1 to secure might work for an o/o, lots more for a REO etc… Most likely the owner will not be willing to pay for title work, its you or your buyer.
Once you assign the deal you’re done.
Either bring in the buyer as an inspector and use the inspection clause for an escape.
FLIP can mean a whole lot of different things.

quote…another question I have is: what is a good thing to tell the seller when your buyer comes to check out the property?

I agree with everything hebster pointed out… One thing I would add is…

I would be completely honest and upfront with the seller it makes your life whole lot simplier if you let them know up front what your intensions are.

I agree that you must be straight forward with people. After playing around with the wording of this one for a while, I finally found the best way (for me) to communicate my intentions to wholesale. Remember that a confused mind says “no,” (since a majority of people don’t know what wholesaling is) so you don’t need to sit down at this person’s coffee table and explain your step by step process.

However, it does help to mention that closing will be contingent upon your investor’s approval. Therefore you can say that you partner with local private investors who purchase homes for cash. Since they will be closing on this deal with their funds, they must perform their own inspection of the property to ensure the numbers make sense for them.

That way, the seller won’t be confused if you bring through more than one investor, they know you will not be the one closing on the property, and they understand that there is no guarantee that you will close on the property until you find a qualified buyer.

I have both questions and comments about the original…

First, comments: I agree that trying to get the seller to pay for the titlework (or really much of anything) will not be a good strategy. I assume in most cases, if the people could afford to get out of the house themselves and make a little cash doing it, they would. Granted, I know some people are not well informed, etc…but surely if they had a few hundred dollars lying around, they would find a way out and/or not even be wanting to sell.

Second, questions: Once the offer to the seller is made, terms are agreed upon, to put the deal under “contract”, you just have them sign the forms then turn them over to a title company? Do you have an inspection done before your investors/buyers get in to look, or is this something they typically will have done themselves? Or, since it’s cash (we all hope), it doesn’t matter about a formal inspection? Secondly, do you typically get your assignment fee at closing, up front or does it matter? When you tell your buyer you want a deposit (not sure if everyone does this, but it’s somethign I plan on doing because I want them to have something at risk, also), do you just give them this money back physically when the deal closes, or do you just take that much less on the assignment? I am not sure if this matters or not…just trying to find out what makes the most sense so that no one is confused or mislead during the process…

Still looking for answer to the above questions…any help?