Not a huge profit…
I have a seller that is selling house 20k under market value. I have the buyer who qualifies.
How do I make on offer, sign over the contract to the buyer, and make money???
i believe you right your own contract for the buyer and then they send the money to a 3rd party or escrew company that distributes the money to the seller and the profit to you.
blondie777,
Congrats on finding both pieces to the puzzle!
There are a few ways you can proceed.
Method 1 you can do a straigt assignment. That is where you get a contract to buy the house from the seller and you reserve the right to assign the contrat to another buyer by adding (And or assigns) besides you name or your company’s name on the purchase contract. You then draw up another contract to sell the property to your buyer for the higher amount.
You use an assignment of contract form to assign the contract to your new buyer.
In the above case your buyer will see how much money you are making and your title company might also have your buyer sign sign a disclosure that shows that you are assigning the property.
Because the amount of the spread is so high, the next option might be best.
You can do a double closing.
Essentially you do just like the above but you actually have two seperate transactions. The buyer does not know that you are reselling and the neither does the seller.
You can call around to different title companies in your area to see which ones will let you do a double closing.
(BTW–a double closing is having both transactions closing at the same time)
It used to be that just about any title company would let you do a double closing and would let the second (higher priced) transaction fund the first. Leaving you with no money out of pocket and 20k profit. Title companies are getting stiffer here now.
Some title companies are requiring that both transactions can stand on their own merits. In other words, deal 1 needs to be fully funded by you and not by deal 2.
You may need to find a funding partner if that is the case in your area.
I hope that helps.
Good Luck!
Rick
Awesome! Thanks Rick. The seller is selling the house for $42k, and the house was appraised two years ago at $61. How do I get a loan for under $50k? We went into this business full time. Not sure if you know, but deposits into our business account would qualify, although there’s also a lot going out.
I need to find a lender that will loan low.
How much do you trust that appraisal?
Have you determined comparables of the home yet?
I would never ever use my name and credit to get a loan and fund a simultaneous closing.
Never ever.
Don’t be greedy on wholesaling houses.
Get the home under contract for a certain price, make sure contracts says it is assignable.
Find a buyer and assign the contract for a few thousand bucks.
Buyer will take that assignment of contract paper + the contract itself to closing and you’ll get a check.
I tried to make it as simple as possible.
Thank you!
Talking with owner tomorrow.
Much easier to do a straight option on this property.
Tell the owner you will give him $500 for a 60 day option at $42,000. Tell him the money is his not a deposit, it’s HIS, go spend it. You will have a buyer who can close in 60 days and he will get his $42,000. If you can’t get it done in 60 days he has no further obligation to you. Then you bring in your buyer at let’s say $55,000. You then assign your option to him and at the closing you leave with a check for $13,000 and you risked only $500, your credit wasn’t even checked, you had no holding, closing or related costs. Have an attorney write you up an option agreement. It’s a one page document, very simple, you will need an attorney to process the transaction in order to protect yourself. It also looks much more professional to have your buyer drop his deposit check of to an attorney than giving it to you.
This is THE perfect transaction for a straight option.