When wholesaling, what is considered an iron-clad escape clause? As a former realtor, the only ones that I am aware of is the inspection and finance contingency. Please help - I’m about to write my first deal! :biggrin
Options are really good for this. When you get an option signed buy a seller, you are under no circumstance to buy this property if the situation does not suit you. But they do have to give you the right to buy their property with in the negotiated period of time that you asked for. This could be 1 month, 2 weeks, or 2 months. Usually the seller does not care, they just want it sold. :biggrin
Delondon,
I am considering writing a contract on a property that investors already bought, but want out to pursue other projects. They have listed it with a realtor. It’s in ruff condition, including poop in the rooms. But the ARV is about $90K+. It needs $30K estimated, they are asking $38K, they paid $20K ish. I’m starting my bid at $20K with hopes of reselling or optioning at (give me a figure). What do you think?
I use to use an inspection contingency as my main exit clause. Now I just use a financing contingency. Most sellers know that financing is tight. I like using this clause, because I can blame not being able to close or needing an adjustment in the price on my “lenders”. Since I explained to seller about the financing provision in the contract when we sat down to go over it, they really can’t get upset over it.
Ok, so lets say I get an accepted offer for $20K, and I want to assign it to my end buyer for $2000 - I just have him sign a assignment agreement, correct? How does that work at closing?
Yes he signs the assignment contract and you get a deposit from him on that assignment like 2k is what i’m learning. Then contract goes to title and you go to closing and get your final check for balance due on assign. contr.
Do I need to state in the contract that I write to the home owner that I will be assigning the contract to another person? And do I give my assignee the original contract and the assignment contract and he show up at closing?
go to flipthiswholesaler.net. She has free contracts u can download. Yes it does need to state that there is a possiblity it will be assigned. No you dont need to give the assignee the original contract. Give that to your title company. Thats the way I see it but this is all new to me also. This is what Ive learned so far.
Thanks so much Dreamgirl!
You need a title company that will do assignments. You need to talk to the title company first and see what type of paperwork they need.
You mentioned optioning it, with $30k in repairs, I doubt you will find someone who will pay an option fee plus do the repairs. Plus, you will have your money tied up until they refinance or you evict them.
$30k in rehab is a lot of rehab. Are you sure of that figure?
Fadi, yes I am sure about the repairs. It needs complete rehab, not just paint and carpet. It’s a 3 BR brick cape cod, eat-in kitchen, full bsmt w/shower and toilet, 1 car gar on quiet cul-de-sac street. ARV = $95K+.
Sounds like you got a winner on your hands. Get a contract on this property and see how your buyers are taking to it. You need only give this seller $10 bucks, and tie it up for no more than 2 months. Yes you can tie it up for longer, but we are not in the business of keeping houses under contract. We want them cheap and we want them sold. So I would take a go at this one. What do you have to loose? 10 bucks.
:bdaysmile
Thanks Delondon! I needed that! :biggrin
No Prob. That’s what we are here for my friend. :bobble