Hello I am a wholesaler in the San Diego ,CA area looking to wholesale some REO’s ,but I want to make sure I have the complete process right. So can anyone explain how to wholesale REO’s from A-Z please ?
Darren Crawford
- get pre approved for a bank loan or come up with enough cash to fund a deal
- find a buyer that’s pre qualified for a hard money loan to buy and repair the reo (also need funds for marketing and holding expenses), or has set aside enough money to buy one for all cash.
- find out what your buyer is looking for and qualified for
- find an reo realtor or look at reo websites for what available
- find some houses that may help your buyer reach their goals, cash and profits
- personally inspect them with a contractor
- decide on the houses that you want to make offers on, make sure the deal is one that the buyer likes at the right price
- make your offers to the reo realtor with earnest money on a contract for less than you’re willing to pay so that you can negotiate upwards
- come to agreement with reo realtor
- set your closing for 35-45 days after the date you get written confirmation of acceptance of offer on reo
- create an assignment contract with your buyer, make sure you get at least the amount that you use as earnest money from the buyer (risk you have to take)
- perform due diligence to confirm values and repairs, using appraiser and contractors
- schedule double closing with attorney
- confirm clear title
- setup funds for your part of the double closing
- confirm the buyers funds are available
- close on the first contract with the bank and then with the buyer
- deposit a check
yes, it’s a little more involved than that, but that is the gist of it
good luck
hassan, I’m new to this but why create an Assignment Contract if you Double Close? Don’t you use one or the other?Herbster
you dont neccessarily need to, but you don’t have title until you close
I would suggest you find your local REIA and talk with seasoned investors and get a good course to help you get started out right.
The worse thing you can do is to set yourself up for painful errors just starting out, it can become very discouraging.
Just an addition…
If you plan to wholesale REO’s in many cases they will have a non assignment clause built into their contract…In which case you would need to have a pocket llc ready to buy the home in that name…Then sell the llc
Many investors fail to realize this because in most case you turn in 1 set of contracts to get your bid accepted then once accepted the bank will give you a 15 page CYA contract that won’t let you scratch your A$$ without asking.
Good luck