I know that with wholesaling the money comes from the buyer, who we’ll assume is a rehabber… my question is, when negotiating with the potential buyer/rehabber, how do we get them to the appropriate price (say 65% market value), thus convincing them to leave room for some money for us in the deal (the wholesaler)… what is the benefit for them that way? How do we price it so that they are convinced they are making a deal that they will benefit in the long run by making a profit out of it?
Good question, i would also like to know how this works. Does the investor/end buyer usually pay the assignment fee out of his own pocket? or is there way to increase the purchase price of the house if you already have it under contract, so you can get your assignment fee?Do you just go to the lender and tell them to add an extra $5,000? How does that work also?
If I understood your question here is the answer
Generally the advantage to sellers of dealing with wholesalers is you have buyers and they do not. So by dealing with you they can get their home sold according to their needs.
Maybe a better way to answer would be to tell you how many of my deals go.
I will find a good home for sh_ts and giggles we will say that the sales price is 65,000. I will put the home under contract for 65k, then call all of my buyers and tell them I have a great deal on a home for $75k. then if they like it I do a contract with them for 75k. I call the seller and set up a closing for 65k and set up a closing for 75k with my buyers about 30 mins apart.
Closing day I show up at closing with $0, close on the sellers home for $65k, then 10 mins later close with my buyer for 75k, then the title office takes the 75k from the 2nd sale and pays off the seller from the first sale 65k leaving 10k before fees are taken out. I then walk out of the title office with a check for $9,000.
Why have I been told to only work with houses with EQUITY? Where is the equity in houses used…?..for rehabber, for homeowners, for me? I understand your previous example and am questioning EQUITY also. Can you give me an example using a house that has equity that you handle?
Question for Eric:
In your opinion is the double close better than doing an assignable contract? What if your buyers don’t show up at closing and you have already closed on your end what would happen at that point? Thanks
your example made sense to me…but…why are people telling me to pick houses with equity when wholesaling? And from who does the homeowners get their money that we are suppose to give them to walk away with?
I did something similar to what Eric said. I put a house under contract for $38K. The ARV was $100 - 110K. I put it under contract with my buyer for $50K. My Buyer provided the funds, the Title Company gave me the check.
I had a situation with a double close where my buyer was not going to show up at closing. B/c I had a contract with them, they lost their earnest $.
Hello all,
I am new to the idea of wholesaling. I’ve been concentrating my studies in the areas of buy/hold, flips, and rehabs. But I too am looking to see how the situation is handled if your buyer doesn’t close. What happened to the deal you initially closed on “30 mins” earlier? What happens to you?
First, let’s assume it’s a double closing, i.e., you have a contract with the Seller, and your buyer has a contract with you. If your buyer doesn’t close, then you get to keep his earnest $ (which I always require at least 1% of the purchase price). When there’s earnest $ on the line, a buyer not closing is very rare.
What if your buyer is not another investor? I have had alot of trouble getting the lender to allow a double closing. the title companies have told me they have no problem with a double … how can i get around that
Talk with your Title Company to see if they can handle the lender. I had a double closing where the lender questioned it b/c my name wasn’t on the Title when we were at the closing table. My Title Company took care of it b/c they dealt with that question many times.
Alternatively, try to connect your buyer with a loan where the lender doesn’t care. You would have to know a good mortgage broker in order to do that.
Oh ok , Thanks for the info … know a good mortgage broker? i have worked with 3 ,but the one that is familar with investing fell off the face of the earth … or something,the other 1 said he cant get anyone financed unless great credit( no subprime). the third one had no clue about investing.
Okay, This is what I don’t understand: THE FIRST CLOSING. If you arranged the first closing with out telling the seller that you are going to get the money to pay them by immediately selling the house as soon as you have purchased it from them, then how is the deal closed with no money? Or, is everything out in the open from the beginning? Do they know ahead of time that you have arranged the second deal? If the first closing is CLOSED before the second one begins, what is done to CLOSE that first deal with no money in your possession?
ALSO, how do you initiate a wholesale deal? If I see a house that I would like to try to wholesale, what do you say to the seller? Do you let them know what your intentions are? Or do you deceive :evil them into thinking that you are actually going to truly purchase their house?
HELP! :help
I have been studying reiclub.com for over a year, and I have never done a deal because I am afraid. :anon
HA you could always wear the bag and se how that works for ya! just do it !!!
I want to be just like you!!! Can you give me some pointers. As the other “wanna-gonna be” above, I am a little scared at the “what-if’s”. I am totally broke financially, and want so desperately to break of this debt and get this ball rolling so I can become a financial success but at the same time I don’t want to do something 'stupid". I too have a found a house and have tracked the owner down…but she says"thought about selling it as" it was my mother’s who passed away a few years ago, but nephew is living in it"…but still might sell it and “will let you know if I decide to.” Plenty of equity in the house as it is paid for. House looks great, needs a little updating…roof looks to be in good condition. I had one investor tell me that she just needs a “little push” and that she really wants to sell it but still feels attached to it. I don’t think her nephew is paying rent and he has let the grass get out of control, old curtains in the windows type of situation. In fact I thought it was an abandoned property but apparently not. by my estimates, and me being a complete novice here, I estimate a market value of around 115-120,000. So how do I handle this possibility?
If it where me i would call her or better yet go see her, just let her know your not there to steal her home you know make "friends " with her. you said you are affraid of the what ifs but look you have wasted a year reading. what if you dont talk to her what if someone else buys her home? what if you are still reading this next year 
I am in the same situation, i have not bought any courses… I did work for about a year for another investor(whom by the way never closed on ANYTHING) so maybe he was playing investor… no matter i learned from my year there and went on to flip my first house 3 months after i left his company. not bad if i do say so myself LOL. my point is i was, still am scared of the unknown (i think everyone is) how is this for business lodgic? fake it til you make it!! the confidence i mean. i have never been to an investors meeting, i dont want to walk into a room full of strangers! but im going to make myself go tue the 14th …im going to fake it :cool … what if i make it ??? Ill send ya a post card from mexico :beer