Here is the URL of the article: http://www.reiclub.com/articles/wholesaling
On the third of the last paragraph. Twyford gave and ex of and investor (me) putting a house undercontract for 45,000. Where or how did this 45,000 come in? Im assuming this is the price of the home, correct?? what if the owner is still paying mortage payments (don’t out right own the home) What would the number be.
I understand that I would sale the contract for 5-7 thousands dollars more depending on how much i want to get out of it but I’m a litte confused on how they come up with the first number.
that $45,000 is the amount that the owner was selling the home for.
From my experience I would recommend finding buyers and then putting the home under contract rather than her rather risky way of finding a home then running ads, then finding a buyer.
Her way has 2 inherant problems:
Newspapers that are not run daily take ads once a week, so you could kill a week of your escape clause period just waiting for your ad to run.
She doesn’t actually mention anything about using escape clauses. Sure she suggests giving just $10.00 for deposit, but you still have a contract, so even though you may risk losing your small deposit, you could still be liable for not following through on a contract, and court isn’t that fun.
I totally agree with Eric and absolutely disagree with the article you referenced. You need to have your buyers lined up and ready to close. Otherwise you’ll be scrambling to honor your contract. Even if you have an escape (weasel) clause, you don’t want to become known around town for weaseling out of contracts! Don’t put the cart before the horse!
thanx jason and eric for u’re response.
They buyers are the investors right?? i’m assuming yes, but what if the buyer says yes and i go a head and then put the house under contract to come back to the buyer just to hear him say he change his mind or something came up.
I sell the deals to other investors (wholesaleing) or very qualified owner occupant buyers and don’t put under contract until they are ready to commit. You will have the occasional deal fall apart, but it doesn’t happen often enough to get a bad reputation. If you set it up right buyers/investors won’t back out. You need to provide them with as much information as possible up front so there aren’t any surprises that would scare them away during the inspection period. Hope that helps
I was just getting ready to post questions similar.
Lately I’ve seen lots of wholesalers trying to wholesale properties someone else is selling, just by adding their 3-5k to the deal.
My other concerns are the same as realesinvest.
If you don’t have the property under contract, can’t buyers circumvent you and go directly to the property owner?
you have them sign a non-disclosure or non-circumvent agreement, or you give them a scenario, “if I find a house at such and such a price with these ammenties, or this ARV, etc”…whatever they are really looking for then contract that property and disclose the address.
Jason, thanks for the reply. I have not heard of wholesalers doing this before.
It just seems if you had them sign a non-circumvent agreement then they would be suspicious of what you are doing, and/or start to understand they could get more money than what you are offering them.