I am new to wholesaling but have been doing my homework for almost a year. I have built a solid buyers list and have great connections from asset managers on finding good deals to wholesale. The majority of the properties I will be wholesaling will be REO’s. This is where I am getting confused. Once I find a property and lock it up with an accepted offer that I can wholesale for a profit, I can not assign REOs in my area. I would like to avoid the double close for several reasons. (1. I do not have my own money to purchase these deals cash. 2. I would prefer not to pay the HML fees just to have a 1 day loan.)
I have heard the idea of buying in an llc name and selling the llc but that seems to have many memebers questiong wether that is legal or not. Is possible to get the accepted contract , find my end buyer and then add him to the contract at that point after it has been accepted? With the idea of quit claiming myself off after my fee is paid. I have read a little about simultaneous closings but was not sure if anyone is still doing this and if title companies are still allowing this. I am eager to hear from a successful wholesaler who specializes in wholesaling REO’s and is using a different technique other than the double close. Any advice would be appreciated. Thank you!
Banks wants the person who signs the contract to show up at closing. One way around it is that if you already have and know the buyer for a property, buy it in a land trust with you as a trustee and him as beneficiary. at closing, you get paid a trustee fee (your wholesale fee). If they are paying cash or getting hard money, that should not be a problem. If they are getting conventional loan, there might be an issue since their bank will not accept a trust, or LLC for that matter.
What if I am not sure exactly who the end buyer is when I write the offer? It will usually take me 3-5 days to have one of my investors commit. At this point the contract is already accepted in my name alone. My idea was once I have a committment from my end buyer to add him to the contract with me and then quit claim myself off after closing and recieving my fee. I know I have seen addendums added into the contracts before but was not sure if banks would allow this after an accepted offer. I dont see why they would have a problem especially if we act as though we are adding the additional person for financing purposes.
Nevermind on the above post. I was able to find a buyer and am selling it for 55k. I guess I have been very confused on the way the double closing actually works. I was under the impression I had to close with my own funds or financing and then resell to my end buyer. After several days of research and conversations I was informed that with the right title company you can actually do this without using your own funds. I appreciate all the input from previous threads. 7k profit for a few hours work, Sure is a hell of a lot easier than doing mortgages right now.
Thanks,
Todd