how do I get started in wholesaling

I have been reading alot of things on this subject. This seems like the way to go for someone who has been through chapter 7 and also divorce and has very little extra money. I live in Baldwin county Alabama Which is Daphne, Foley, Fairhope, Gulf shores(can you say condos), This is the fastest growing county in Alabama. I just need some direction on how to tie up properties without money and how to get a list of buyers in the area. Also form what I have read the way to do it is to get as much info as you can first then to get with the owner. I want to do wholesale first to maybe get some cash flow and then do buy them myself and fix them up and rent to section 8 and also sell for profit. Does this sound right or should I go about it different?

Basically you need to know other investors who are interested in purchasing properties. For starters you can go to local investor clubs and network. It is essential to know people AHEAD of time to whom you can wholesale too. In order to make a wholesale deal worthwhile there has to be a good amount of wiggle rooom.

You would place the property under contract but after the name of your company (you really shouldn’t use your own name to purchase properties due to liability issues) you place the words AND/OR ASSIGNS. This gives you the option to sell the contract to someone else for a fee. Lets say you have a place under contract for 60k and fixed up the property is worth 100k. It needs about 10k in repairs. You contact other investors you have met and offer to sell them the contract for 5k. The investor get a property for 25k under market value AFTER repairs are done and you get 5k

You can make quick cash this way as long as you have a title company who has experience working with investors. You don’t come out of pocket and you can build up reserves to rehab properties yourself. You might need to check with various title companies before you find one that knows how to do this. Also mortgage brokers can be helpful in finding you investors. But again you might have to contact various mortgage brokers before you find one you are comfortable with and who works with investors.

I hope this helps you!! :smiley:

what exactly do you say to a seller to get them to sign a contract and not receive any money, where do you get these kind of contract forms to use, i live in balto Md

For starters you should never give the seller money directly, the money should be given to the title company to be held in escrow. This protects you as the buyer and the seller as well. The seller is still going to get whatever you negotiated the price of the property to be so there is really nothing else they need to know. You don’t tell them you are not going to be the one to close on the property because it doesn’t matter who closes the deal as long as it closes.

As for what I say to a seller in order to get them to sign, it depends. Are they in foreclosure? If they are in foreclosure I offer them the ability to save their credit AND walk away with a little bit of money. If they need a quick closing I make sure that the people and companies I work with can do a quick closing.

I am in florida and I use a standard contract for sale and purchase which I got from a friend who is a realtor. I find it easier to use than those sold over the internet or given out with purchased products.

so what you are talking about is “assigning the contract”. Is this different from wholesaling? I thought they were two separate terms?

Yes, assigning a contract is basically the same this as wholesaling. However, wholesaling is not always assigning a contract. It can be doing a double close where you have one contract with the seller and a seperate one with the buyer, the closings for both are just held together or within a few minutes of each other or whatever.

Quick question, if the the closing is held together (double closing), will the seller know how much you are making off the deal or vice versa, will the buyer know how much you purchased the contract for? I’m asking b/c the buyer might not want to close the deal if he finds out you are making more wholesaling the deal then what he could make rehabbing the house.

I’m a newbie also, but maybe I can answer a little bit. The seller shouldn’t kno who wmuch you are making. he doesn’t care b/c they are trying to just settle their situation. The buyer will know how much you contracted the price for because he has to purchase it. As far as the buyer goes on the closed deal, you will work out the numbers with him before hand and he will know if it is a good deal or not. You don’twant to try and take too much away from the buyer because you may need him again. But also, don’t sell yourself short in the process. Do some calculations to see where everything fits and everyone is satisfied. Hope this helped a little, but maybe someone else will elaborate a little more.

kennethj67…thanks for your reply.

so, in a double closing, is everyone (seller, buyer and you) together in the same room? or are these separate procedures that just happen to be in the same place?

I haven’t been to a closing yet, but I have read A LOT of info from a lot of investors. Here is what I get from it. You really have to make sure that whoever conducts the closing has a clear understanding of a double closing (if that is the case). They have to have experience in that area is what I’m saying. I also believe that you do not have to be present, because the contract will state that you are assigning it to the buyer and your fee should be in there for that assignment. Hope this helps a little. Believe me, I am still learning a lot myself and these forums are a great place to learn A LOT. It beats trying to by every real estate system out there :slight_smile:

You are going to have to look for title companies who have experience in double closings. Your best bet is to get referrals from other investors about title companies they would recomend as well as call title companies and ask questions. You don’t have to be present if you are assigning a contract. Most investors I know like to be there to pick up their checks while others have the money wired into their account.

Honestly I have never come across a seller who is upset at you as the buyer making some money. The seller is getting a fair and reasonable amount for the property that is really all they care about. If you are assigning the contract the amount you are earning will appear on the hud statement. If you are doing a double closing I am not really sure…
Personally I prefer to not do a double closing, you can if you want too.
Since I usually assign the contract if I know the seller will be aware of how much I am making up front as it will be listed on the HUD! statement. If you are unfamiliar with the HUD1 statement you might want to ask the title companies you are considering working with to show you the format that they use (there are many differnet programs). This way you know how to verify the amounts you will be recieving as well as the fees you will be responsible for if you are closing.