My name is Devin and I have an investment LLC trying to get started by wholesaling contracts but I have a couple of questions.
First, When I find a good deal and I have the wording that says Buyer and or nomineee has the right to purchase property in the contract, Do I put my business name on the buyer line or my own name?
Second, After the seller signs the contract, Does the seller keep the contract and does a $10 fee have to be given to make the contract binding?
Third, Once I find an investor that’s interested in purchasing the contract and I have the investor sign the assingment contract, How do we go about closing the deal? Do I have to call the property owner and ask them to call the tittle company and set a closing date or what?
I hope to hear from you guys soon. Thanks alot!
also can someone explain this to me and does it cost extra to do this process?
Option #3:You could reverse this process and close with the Buyer first. You could have the Seller deed the property directly to your Buyer thus staying out of the chain of title completely… and have two closing statements… one from the Seller to you… you could separate the parties by time and/or space.
A lot of gurus teach not to add the or assigns to the contract. Most contracts are assignable unless otherwise stated in the agreement. Adding could scare the seller and alert them you are a wholesaler.
Use whatever name you want to buy the property. Why do you have a LLC? If you want the LLC to earn the income then use the LLC to buy and resell.
The original contract should go to the title company along with the earnest money. Do not get your hopes set too high on using just $10 bucks. Most sellers will want more.
Once you find a buyer and get your fee you will be on the sidelines. The buyer and seller and title company should be able to close the deal without much input from you. If you have not been paid then you should be the middleman and help set up the closing date etc and be involved as much as needed to make sure it runs smoothly.
Your option 3 is done all the time. It will save some money that would go to the closing attorneys. The order of closing does not matter. All the money and deeds etc are closed into escrow until everything is signed and all the funds are certified and received and then the deal is funded. Sometimes papers have to get mailed out for instance and the closing could take days.
If you are making the contracts yourself, which you should learn to do if you don’t already know how to, then have two lines at the bottom to sign on for yourself. One titled “Buyer” and one titled “As Manager Of”. Sign your name on the “Name” line, and sign your business name on “As Manager Of”.
ok so once I find an investor, I get him to sign the asignment contract.Now do I have to tell the seller that I assigned it to someone else after that happens?
Also Once We talk about a closing date Do I tell the buyer to come at like say 7:40 and the seller at 8:00 just so I can collect the money and the seller wouldnt see how much I made or something like that
Somebody has to tell them. If you get all your money when you sign the assignment agreement, it could be the title company or the agent or the buyer if you want. It would be best coming from you. I did a deal once where the seller thought we were partners. You may want to explain it as you showed it to some partners and they just bought you out or something like that. Some others go in and the sellers know right off the bat that you are looking for another buyer and are trying to profit off their misfortune or whatever. Usually the title company schedules the closing. Very rare these days do the buyer and seller all show up and close the same time or even the same day. If you wait to get your money you will of course want it all it happen as fast as possible.
Ok so now I assigned it to an investor and Now im telling the seller that I assigned it to an investor for a fee. How would we go about the closing if The seller calls the tittle company? Would they just give him two diff times? (1for buyer, 1 for seller?) and is there a way where I can get a check in the mail instead of even showing up?
There are a number of ways to do these deals. Yes the title company can mail you the check and handle the closing for the buyer and seller. Someone usually has to ram the deal thru. If you just wait on the title company to close it, the deal may never happen. They are always waiting on one thing to happen before doing anything else. It always seems to happen all at once at the last minute.
ok so do I give the assignment contract to the investor and have him take it to the closing and just let the tittle company no that I want a check mailed?
I think im asking to many question online. maybe I should call you or you call me lol
Usually, if the investor paid you up front for the assignment, the assignment of contract with the buyer is stapled to the original purchase contract from the seller. The buyer should just take that and give it to their lender as their purchase agreement. There really isn’t that much more for you to do.
cool, so i just go meet with investor and have him sign it and then have him write a check on the spot for the contract and then him and the seller handle the rest. that sounds pretty easy if im correct
That’s the easiest way to do it. Once your buyer has the contracts (s)he takes that to their lender, and the lender and title company finish the rest pretty much. You should get paid up front. If the buyer doesn’t have enough cash up front you can have them sign you a promissory note for the amount to be paid later or you can have the title company put it on the settlement statement as “Assignment of Contract” or something similar to pay you at closing.
Does anyone know of conventional lenders that will pay an assingment fee through the closing?
If lenders will not fund the assignment fee themselves, will they still allow it to be put on the settlement statement so that the end buyer has to bring into closing?
If they wont even allow it to be on the settlement statement, is it illegal to collect on your own before/after closing or through a promisory note?
I’m assuming that the promissory note is not too strong of a document and may go unpaid.
As long as the loan is enough to cover the assignment fee and all liens and encumbrances on the property, and the total of the loan is no greater than the lender’s appraisal of the property you shouldn’t have any problems.
Devin, the hardest thing with an LLC is its backing and track record. If it is new, most mortgage companies will not lend money to it off the bat. If you have cash established, you can and should use it for title.
The LLC is still new to the business of real estate. Speaking to my CPA, he says that liablility is still in question. Lawyers will give you a headache when it comes to this subject. Some will tell you that you can also be sued. It is a real issue.
I suggest get as many properties under this name so, it will separate you from it.
You should have all your company materials in the name of the LLC. Do this from the start.