Questions Before Attempting Deal

Bird Dogs, Wholesaling
1

I’m a first time wholesaler and found a junk-like property that can be a great candidate for rehabing. Before I attempt to go with this deal, I have some questions:

  1. The land that the house is on also has two other houses that look vacant. Should I attempt to make a deal if all three are available and assign the contracts to the same buyer? Also, How do I run the numbers on a property for the buyer and figure out my percentage on the deal?

  2. I have one buyer lined up, but would companies like ‘Homevestors’ and ‘We Buy Ugly Houses’ be good to assign contracts to alongside individual buyers?

  3. This would be my first time handing out contracts. The last thing I want is for a buyer to look at the contracts and laugh, so would websites like Rocketlawyer.com and software like Business-In-A-Box be good for printing out buyer/seller and assignment contracts? How do I keep the seller from negotiating with someone else after signing the contract, or keeping the buyer from going behind my back and buying the property without handing my my assignment fee? Also, how will it be known to others that the property is under contract? If I can’t find an end buyer that is interested in the property, how do I break the contract with the seller?

  4. There are more MLS property listings than there are FSBO’s in my area that are great below market deals that are not in foreclosure (foreclosure/REO‘s are out of my realm of knowledge so I won‘t attempt them anytime soon.), so how would I deal with real estate agents when attempting to wholesale these deals, and woudl I need an agent of my own?

  5. When do I have to use escrow and title companies and closing agents, and how do I find out if they’re wholesaler friendly? Can these companies be used for all wholesale closings or are there specific kinds?

Thanks!!

2

Hi,

 I like junk-like properties, however the current value and rehab value can not exceed FMV / ARV or it does not make sense! Just make sure you project where these numbers will potentially be before pulling the trigger?

Check to determine lot sizes and whether this is one property or 3 properties? If it’s 3 properties you could attempt to do three deals! You will need to figure out the ARV / FMV after rehab, then deduct 30% plus the cost of rehab, then from what’s left figure out what you could offer to pay and what you can make!

Homevestors and We Buy Ugly House’s is the same company, however I don’t know what there guidelines are or what perameters they work from!

First time buying property, 1 property - 1 Contract, 3 properties - 3 Contracts, and 1 to 3 assignment forms! Do these as at least 45 day contracts with at least 15 days of contingencies, better yet is get 60 days for escrow and 20 days for contingencies, make sure you put in a loan contingency and a inspection contingency! I would start searching for other investors to present this opportunity to in your area!

The property has to be shown and is going to have to be accessable so your buyers are going to know the property address and deal, most investors will not go around you provided your deal is fair, for most of us reputation is paramount to long term success and we don’t want to be known as unscrupulous!
If you get greedy it is easy for an investor to wait out the deal and go get it after it falls apart but at that point they have not gone around you as you would no longer have a deal!

Your contingencies are how you break the deal, no firm deal with an end buyer in 15 to 20 days, no deal!

An REO for sale is a listed property, the only difference is the lender is the seller! You will need professional people for your team to use from time to time for your deals, you will need a team real estate agent who understands investors needs and investment real estate!

Wholesale is an indication of price, the escrow or title is between buyer and seller, all title and escrow agencies have investor discounts, just ask for them! Escrow or title is opened within 1 or 2 business days of getting signatures on your purchase contract with the original seller!

                   GR
3

Thanks for the help!

Before closing, since i would be collecting $5,000 for these vacant properties (if I can locate all the owners), should I take pictures of the houses and present them to the end-buyer along with the address? The reason I ask is because I would like to collect the non-refundable $2,000 deposit and the rest of the assignment fee upfront for these types of deals. (I know that for more expensive non-rehab type wholesaling I’d have to double or simultaneous close through escrow/title companies since the assignment fee will be higher than $5,000.) What would be a good contingency to use for the deposit and fee in terms of these vacant properties?

Thanks.

4