This question is for you wholesalers who purchase property and quick turn the same or next day. Do you require your buyers to sign a purchase contract? Can this be done when you are not yet legally on title?
For wholesaling you rarely sell. Normally, when you make the original purchase with the seller you list your name as “MY NAME and/or assigns”
Then, when you find someone to wholesale it to you assign them your interest in the contract. It isn’t a new sale, you are just letting the new investor supplant you in the current transaction.
You can sell with a simultaneous close, but that is an old technique most people don’t like to use, because you have roughly double the closing costs as you would if you simply assign your rights over. Also, there are a lot of things about simultaneous closings that can confuse closing agents and get a lot of questions from lenders so there can be a lot of hassle.
Thanks Sal.
My strategy is this: buy property using seller financing. Sell property using seller financing at an interest rate higher than my purchase. Use HML to fund my seller’s down payment and use my buyer’s down payment to pay off HML. Profit on interest margin each month. For this to work I need to have my buyer locked in or I’m screwed. So I need to know if I can get my buyer locked before I actually close and go on title.
Any thoughts?
What about using a lease/option to sell to a tenant buyer instead. Then you could collect an “option fee” up front that would help secure that they will go through with it before you go on title. It would also make it easier to get them out of the property if they stop paying.
I’ve been away for a while.
Whether I use seller financing or a L/O I still have the same problem.
Can I (legally) sign ANY type of contract to sell the property prior to me purchasing the property and going on title?
If not, then do experienced wholesalers rely strictly on faith their end buyer will come through in the double close?