I have a guy who is willing to take 15k for a home that needs 15k in work to be worth 60k-65k. He owns free and clear and said I can keep anything over 15 that I find a buyer to purchase it for. What kind of paper work is needed between him and I to make sure when I do find a buyer that my fee will be paid at closing? I know to get a non-compete signed by my buyer but what do I need between me and the seller?
Get him under contract.
You must decide: a) do you want to assign the contract. b) do you want to wholesale, find a buyer, and do a simultaneous close.
what would the general contract look for under this deal. I want to wholesale the contract to someone else.
You have a couple of options with the route you are choosing.
#1 the traditional assigning route where you fill out a regualar p/a with an escape clause, and then add your name and/or assignees, then assign it
#2 this is the option that I would suggest if he seems trustworthy, Put his home under contract with a 30-60 day lease option, and then sell the home to another investor. This method gets around the new buyers bank not wanting to deal with an assigned contract, plus it buys you more time to find a buyer.
Option #2 I have used before and it’s a good combination of wholesaling and lease option strategie
This house needs 15k in work, odds are the end buyer will be a rehabber anyway so it don’t matter as most HML’s (assuming he is going to get a loan) don’t care about assignements. Just don’t get greedy and leave enough on the table for your buyer to want to buy the house. So far it seems like a decent deal! Good Luck
Hi, could you explain this part? I don’t understand this part of your post.
Thank you, GD
Get a sales contract on the house between you and the buyer. Make sure you have a couple escape clauses in there.
Then get an assignment contract and assign the contract to the end buyer.
Make sure the end buyer is buying with cash or hard money.
Boom, collect your fee!
basically what I think Stjepan is saying is that you don’t want to try and make too much money. If you get greedy it will be at the expense of your asking price. This intern will not leave enough equity for a rehabber to make his/her profit and thus will make it very hard to wholesale the house.
In other words, always leave some money on the table for the rehabber.