I have a possible deal on the table where the house is being sold for 32k but its AFV is worth about 85. I took everyones advice on this site and built my buyers list first. I have a guy who will buy it and close in a week. Problem is this, I was searching for a RE attorney to help cover myself. I talked one for about 30 minutes going over it. I explain to the attorney that I was attempting to wholesale it and make about 8-10k. The attorney told me that wholesaling was not a good idea b/c the fees would eat might profit plus his fee. He said it would be better to broker the deal. Was this good advice?
I have no idea what “fees” that attorney is talking about, unless your state has a ton of mandatory fees. Is this transaction to take place at no cost to the seller? Are there lots of liens on the property that have to be paid that would eat up your profit? Those are the things I see that could cut into your profit.
If things do cut into your profit, I would still recommend proceeding anyway without a “broker” so that you can have the experience doing a deal. Most investors will tell you that they always have an “out” clause in the contract of some type to allow them to get out of the deal if they needed to for whatever reason.
Closing cost, title search,title transfer fee, title insuracne, and his own fees as a RE attorney. He mentioned that these fees would hit me Twice as I buy and then sale to my buyer.
I havent done a title search yet to see if its free and clear. The sellar has stated that there arent any on the property. I wanted to get an attorney to help me with this.
The attorney advice was for me to “broker” the deal instead of wholesaling it. Wholesaling in his opinion would not be profitable as brokering the deal.
Try assigning the contract or singing an option to purchase. Then sell that to another investor. That way, they would assume all the transaction costs.
I’m in Texas & I’ve done double closings. Not sure how it works where you are, but the Title Company I use doesn’t double charge on title if the buy & sell are with them & basically on the same day.
You may also want to get an idea on how much the fees actually are. I couldn’t see it being $1K -$2K at the most assuming no taxes. $7 or 8K is better than $0K.
Double closings shouldn’t cost double, plain and simple.
And if you need an attorney for this kind of work, maybe you need to find a cheaper one - anyone that will charge you twice is too busy making money somewhere else and they’re just trying to make sure they make as much off of you as possible.
If you get too nervous about the deal - sell it.
But if you want some cheap good advice - find a good, local mortgage broker who has some title connections.