Hi everybody my name is Jerry and I am new to this forum. I’ve spent 2 hours combing through and reading some of these posts and it seems like all these new REI’s ask the same question. What is the wholesaling process? I mention this because I am a new REI too and I knew if I asked this same question i might get one reply if lucky. but honestly I think we keep asking these questions because we don’t understand the details of the entire process. Most of us are reading but not doing. How do you describe how to ride a bike? You get on that bike and you have your mentor guide you while you take action. so most of you guys are wondering where this is going…well instead of asking what the details of the wholesaling process is what is the most efficient way to take action? should i just rely on my title company or creative attorney to walk me through the closing process?..well there are more questions to come but instead of asking generic questions im going to try to ask detailed questions that take a couple sentences to reply cuz i know it must be a pain in the butt to keep reexplaining the “wholesaling process”…
thanks guys…you’ll be reading more of my annoying questions…=)
Jerry
Welcome Jerry,
Wholesaling a property is easier said than done. I think it would be a unique individual who starts out wholesaling. I personally think it’s critical to have a very good understanding of real estate contracts and escrow procedures in the state you will work in. From what I recall, there are many good how to articles on this site. Since most of these transactions involve a simultaneous close, finding an escrow agent familiar with the process is a must. If you are uncertain what this is, study it so you know it forward and back. Many, but not all, lenders will have a problem with this step in the process. Alternatively, you can accomplish the same goal by assigning a purchase contract. This is much less complicated. Watch out though, some REO properties will have bank addenda that specifically excludes assignments.
The other big question is on how much to charge and how to get paid. The investors I work with know me and I am comfortable with them. My position is weakest with the assignment. Here, your fee is negotiated upfront and paid outside of closing. I’ve seen some assignment fee contracts, but I don’t use one. My fee is entirely determined by how strong the deal is. I want my investors coming back, so it’s ALWAYS a better deal for them. I know many people take more of the equity, but my thought is that if I want more, I should have bought it for me.
Don’t forget nothing happens until you control the property.
Do it!
Good luck.
-H
thanks for your replies guys!! I just moved to San Antonio Texas. So you recommend me to thoroughly understand the contracts and laws before i get my feet wet correct?
Wouldn’t hurt. More importantly, purchase contracts and escrow procedure.
-H