hello to all,
I met an investor that is looking to purchase properties. He told me the area and what he is looking for, so now do I just go look for the properties that he is interested in and then negotiate the offer sign a contract stating that I am buying the propety and it is assignable, show the investor the property and then sign a contract with the investor and then collect the cash. Is that corect or did I miss anything. Is there any legal things i need to do as far as getting a lawyer, anything with the title etc. Can someone please break it down for me. I know what to do but I don’t know if I need a lawyer or not, but if I do need a lawyer do I have to pay him up front or not or when the deal closes, or can it just be between me the seller and the investor or do any other parties need to participate?Do I need to do a title search before I close any deals with properties? And when all parties close the need who attend the closing if I assigning the property to a rehabber? So for all the question but I want to do this so bad that I want to be sure I know what I am doing.
hello to all,
You need to relax first of all.
I think you need to get both parties to sign an agreement the buyer and the seller, make sure your contracts are tight. Thye may ask you for proff of funds and they want a deposit that is nonrefunable.
i would tell each party the truth im a property locaor i charge 500 per property found. please sign thiis agreement so i can trust i get he funds when the sale is complete.
Anatomy of a Wholesale Flip
Step 1: Find a property
Step 2: Sign agreement with seller (assignable would be great but not necessary. Can do a double/simultaneous close. It’s more expensive since you must pay transfer taxes and some other closing costs twice). If the contract is not assignable, you can make an offer in the name of an LLC and then assign the LLC. Just create the LLC before closing.
Step 3: Give seller earnest money deposit when you sign the agreement. 30-day closing is usually sufficient, but give yourself as much time as the seller will allow.
At this point, you should being lining up financing with a private lender or cash partner in case your buyer backs out. You want to be able to close on the deal and preserve your reputation in the investment community if they do, even if you don’t plan on holding the property very long.
Step 4: Start title work. Choose a reputable title company/attorney that your buyer won’t object to using. Technically, it’s their choice but most buyers don’t have an issue using yours as long as they’re reputable.
Step 5: Sign a sales agreement (if your contract is not assignable) or an assignment agreement (if your contract is assignable) with your buyer and collect an earnest money deposit. Ask them to give you proof of funds (e.g., a bank statement, line of credit with enough room, etc.) or preapproval from a private lender showing that they can purchase the property.
One note here. Don’t be afraid to ask. You want to know now rather than later if they can’t afford it and the buyers who can afford it have no problem providing proof. If they get offended, they probably don’t have the money.
Step 6: Give whatever paperwork you signed with your buyer to the title company. They’ll need it to make sure you get paid at settlement
Step 7: Line up financing with a private lender in case your buyer backs out. You should really start to do You want to be able to close on the deal and preserve your reputation in the investment community if they do.
Step 8: Stay on top of the title company and your buyer to coordinate settlement. Just call every few days to make sure the title work is being done and your buyer, if they are obtaining financing through a private lender, is moving things along. If any problems with the title crop up (e.g., liens that the seller didn’t disclose), you’ll have to get in touch with your seller and resolve them before settlement. Other than that, just make sure they know when and where to show up for settlement.
Step 9: Attend settlement and check the HUD-1 (settlement sheet) for accuracy. Title companies do make mistakes.
Step 10: Collect your check and celebrate!
Thanks jamsden. It’s so nice of you. This step by step approach covers all possible transaction and fail safe. Thanks again.