First wholesale deal help!!!

Bird Dogs, Wholesaling
1

First wholesale deal help!!!

I have a deal under contract.

contract price - I stated 95k

ARV - 150k
Repairs - 5-10k
purchase price - 105k

My question is who normally pays closing costs? Is it normally the buyer of contract?

2

EVERYTHING in real estate is negotiable! There is no “normally” as far as closing costs go. There are a lot of regional “that’s the way we do it here” but nothing is written in stone. I usually go by “on which side of the HUD-1 does this cost realistically belong…?”. Ask local agents who usually pays what in your area.

I would tell you to try to get the seller to pay as much as you can…(as my kids would say: “well, no DUH!”…) but don’t kill the deal with minutia.

Keith

3

Keith is actually right, everything is negotiable. Having said that if you are already under contract, you are past negotiations, most contracts include closing information regarding who pays for what as far as closing costs related to the filing of deed and escrow. There may also be a paragraph describing any buyer’s lender and appraisal and inspection costs that may be paid by seller, but this should be in the contract at time of execution, i.e. after both parties sign full negotiated “offer”.

4

I will be assigning the contract to a rehabber. My question is would the rehabber usually pay closing cost?

5

i meant to type “keith is absolutely right”, my apologies.

6

when you assign the contract, they accept the contract as you have negotiated it.

7

You now have to write that 100 times…not as a punishment but because I like hearing it!

LOL!

Keith

8

I hate to be the one that brings the bad news, but per your numbers, it’s going to be hard (if not impossible) to assign this over to a rehab investor.

Not sure what your purchase price is ($95K or $105K), but either is too much.

By the numbers, most rehabbers will only buy at 70% of ARV minus costs. Per your $150K ARV, 70% is $105K. Minus out the $10K in repairs, you’re down to $95K. That doesn’t include any holding costs, resell costs, etc.

Not trying to put a downer on this, just want to make you fully aware so that you can have your backup plan in place.

Raj