Hi all,
Title tells me there is no really way to keep the Buyer and Seller from knowing the amount of proceeds to wholesaler, due to disclosures…
If this is the case then I may as well assign the contract and keep the fee for closing or have I missed something ? Anyone here who could advise on this ? :help :banghead
Hi,
In an assignment of contract about the most that has been statistically proven to be able to charge without turning a potential buyer away is 7% of the contract price, more than that buyers tend to walk away as the assignment fee can not be paid from loan funds and can not be included on the HUD1.
Now even though a buyer may know what you make using transactional funding allows you to make 8, 10, 12, 15 or 20 percent or more profit on your purchase / sale. There are no limits as your the owner for about half a day when you pay for transactional financing and no limit to what can be paid for your home up to FMV.
All costs can be financed by the buyer when he buys the home from you directly and who cares what you make, if they like the home and are willing to pay for it then it does not matter!
GR
GR - thanks for your input.
I understand that part, “unfortunately” the proceeds are greater than 7%, therefore the deal was structured as Double closing. However, as mentioned earlier, even if one double closes , the amount of the proceeds will be known due to disclosure that will be provided to the original seller and the ultimate buyer, by the Title Company.
My understanding was that if I do NOT want neither the Buyer or the Seller to know the amount of my proceeds I do not assign but double close instead - now based on the info from Title, seems that there is really no way to keep this private… Or am I missing something here ???
Therefore, if this is the case, which based on the info from Title, seems to be - since in both scenarios the amount of proceeds will be disclosed, there is no really any difference between Assignment and Double Close, except paying title fees when using Double escrow - which in the ends defies all logic.
I guess my question is - since Double Closing had been always “advertised” for deals to keep the amount of proceeds private, now that the disclosure comes in play, how on earth do I keep the amount of my proceeds private, without actually closing on the property and getting deed in my name ??? :rolleyes
no one?
Seriously…
Kulisa,
If you want to sell the property you just bought from the kids of some lady and you negotiated a $90k purchase for a home worth $225k and they live out of state and just needed to walk away, would you buy it and how would you sell it?
$90,000 + 7% = 6,300 which gives you a $6,300 dollar profit. Average maximum assignment fee before buyer walks!
$90,000 + $110,000 = $200,000 which gives you a $110,000 profit. Transactional funding closing first to you, then to buyer!
(We used to call a double closing a transaction funded by the buyer for both transactions)
Which is better?
The buyer paying 7% has to take the $6,300 out of there pocket, they can’t borrow it in a mortgage and they can’t write it off as it can’t be included on the HUD!
The buyer who pays $200,000 to purchase the house who buys it from you and you use transactional funding is able to borrow every dollar, and can write off all costs applicable from the HUD1, nothing behind the scenes!
Now at some point, you can say any percentage over your purchae price, the buyer walks away from a assignment as they just don’t have the cash to pay you and the cash down payment and closing costs!!
GR
GR - thank you again, perhaps I need to explain in more detail.
---- I DO NOT SEEK FUNDING, I’M IN A DRY STATE------
I have a property under contract and a buyer, who is known to have dislike for wholesalers making more than 5K/deal. The proceeds are close to 15%, too much to assign, because my Buyer won’t like it, and too little to get HM loan, close and then sell to my buyer.
What I’m trying to achieve here; is to sell to my Buyer without disclosing amount of proceeds to me, and without the need to actually close on the property, get on the deed, and re-selling it to my Buyer.
I was under the impression that double closing will be ideal for this type of transactions, until title told me they have to furnish disclosure to the original Seller and to my Buyer, and that those disclosures reflect the amount of my proceeds.
Let me say this again: I do not need funding for this deal, since I’m in a dry state, what I need is; to find a way to keep the amount of my proceeds confidential.
Is it possible that title is confusing assignment with simultaneous closing ?
I have no explanation as to why double close would work for everyone else except me. Or are all other wholesalers not aware of those disclosures and under the impression their proceeds are kept confidential when double closing ?
Something just doesn’t add up here, and I need some serious help to figure out what it is, and how to achieve what I need to achieve, which is to keep the amount of my proceeds confidential.
Any help greatly appreciated !
Hi,
I was not offering or discussing financing!~!~! Unless you sell to someone all cash the lender and buyer for a retail owner occupied transaction have the right to full disclosure and will know what your making, that is a fact and the long and short of it!
GR
GR- I see, thanks !
Why not assign then? - if in the end the amount of proceeds is revealed in both cases …
What is the purpose of double escrow then ?
I write in my purchase contract, Seller acknowledges buyer will use his money and/or time and negotiating skills and deserves to profit on the purchase and sale of this property.
It sort of lets them know and to expect that, this dog is walking away with a meaty bone.