If I do the Contract Assingment to flip the property, does the seller and the end buyer actually meet at the closing?
Howdy Rulz:
If you have a friendly title company you can set it up where they never meet. The sellers can sign at one time or even another day and the buyer can go and sign. A lot of out of town owners are mailed the closing papers and also never meet the buyers or vise versa. If you have already been paid you do not even have to go to the closing either. I have had closings where no one even went to the closing. The buyer was out of town and closed at another location and the seller lived out of town. Also banks rarely show up at closings or HUD or Va and the possibilities are endless.
Another question,
If I plan to flip a property right away with no money down, do I still need to talk to the bank/lender to pre-qualify anyway?
Hmm I hope that makes sense.
Howdy Rulz:
To even submit an offer to most sellers especially REO properties these days you will need a pre-qualification letter or a bank statement showing you have the cash to close.
What does “no money down” mean then?
Sorry for the dumb question.
Howdy Rulz:
You can get pre-qualified without spending a dime. I am getting a million dollar letter from a hard money lender to submit an offer on a building tomorrow. I have a partner that will help with the financing and I have zero dollars in the deal and will work my a$$ off but no money down.
If you want to flip a deal with absolutely zero down then sell it first and then get the contract with the seller. This is kind of risky and you may lose face if you can not deliver the building. I have know wholesalers that wanted two grand up front from buyers like me before they showed me deals. I did not pay it and few will but some may especially if you have a reputation of finding super deals.
Also zero down does not mean no cash to the seller just not your cash. You can borrow from friends relatives, Visa and still not have any money of yours in the deal. If you are so limited that you can do none of these then write a hot check for the earnest money and cover in two weeks later when the title company or agent calls. I have done this but do not recommend. I did not sleep very well.
What did you mean by ‘cover’? Did you mean recover?
Where does the earnest money made out to? The seller or title company?
Thanks for answering all these questions.
Howdy Rulz:
Cover a hot check or pick it up or wire the money to the title company or drive to where they are and take the cash and get the NSF check or put the money in the bank to cover the over draft. NEVER pay the seller earnest money. Either the title company or the closing attorney. Glad to help.
Where do you put the weasel clause? In the Offer or Sale contract? Or somewhere else?
Howdy Rulz:
The offer becomes the sales contract once all parties accept and sign the offer. Write it in the offer.
How does the end buyer write the check? Will they write one check (write the whole lumpsump check to me and I will cut a check to the seller) or two check (one for me and one for the seller which in this case is a bank)?
Thank you.
Howdy Rulz:
Earnest money checks should be paid to the title company or the attorney closing the deal. NEVER give the seller any money unless you are getting the deed and have done title search.
If you are getting paid the assignment fee have the buyer make the check out to me and I will send you your cut. Ha Ha. I would suggest having the title search approved here too just in case there may be problems and you spend the money and have to give it back.
How do you do the title search? I’m thinking of buying REO, isn’t the title should be a ok or not necessarily?
Howdy Rulz:
Seller usually pays for policy but it is negotiable. They tell usually pick the title company as well. REO does not stand for clean title. There could be problems like the attorneys gave the wrong notice or something or a lawsuit from the previous owner has been filed just after the foreclosure and on and on. Always get a policy.
So the title company does the title search?