Smooth, automated closings for investors with options

Bird Dogs, Wholesaling
1

Hey,

I’ve had tremendous luck collecting options on properties that are below market and finding buyers. Great!

However, if I want to increase business I need a smooth, automated closing process. I can’t handle being an investor and re agent and closing agent.

Anyone have a system they use that would resemble something like: “If it’s something that can work for you, here’s the paperwork you need to make an offer, give it to my closing agent w/ your deposit and we’ll go from there.” I need something confidence inspiring, and something that takes all the pressure off me. I need something that result in an S&P between buyer and seller plus an agreement that states I’m getting paid at closing.

I’ve had Buyers who like the property, dug on the price, but the process is what kept them from picking it up. Argh.

Any input on putting together a smooth, automated closing process for an investor with options would be mega-appreciated. Please, any experiences of how to make a business out of options on discounted properties from a good investor would be invaluable.

2

I don’t understand what you’re attempting to accomplish that can’t be done by having all your paperwork together and delivered to the title company. What pressure are you talking about here?

You’ve already done the complicated part, which is finding deals and finding buyers. The rest in downhill. The paperwork is the easiest part.

And just for giggles, what does “luck” have to do with anything? Just asking.

I’ve never heard of a buyer walking away because of the “process.” I’ve had them walk when they found the deal wasn’t what they actually wanted.

What is your current “process?” Maybe we can provide more meaningful feedback, once we see what you’re actually doing to scare off buyers.

3

You’re right. It’s not luck. I’ve worked my ass off to create a good brand that sellers want to unload their property on.

Thank god that was the hard part! Yes, my paperwork is not in line. Sorry I’m making this sound more complicated than it is.

I basically have no process to work with buyer w conventional financing. Working with cash-buyers is easy: assign the option, collect the fee, big easy. But when I have an assignment fee closer to $10 or $20k a conventional financing buyer wants this financed as well.

What I’m looking for is this: what’s a simple way to flip an option to a buyer w conventional financing. And when I say buyer, let’s talk about a person who barely knows anything about real estate (your typically SFH buyer). You know, the type of people who will probably purchase through a Realtor and pay top dollar because the Realtor will hold their hand through the process. How can I emulate that? How can I get the oil workers to spend all their money on my discounted properties that they like?

What sort of agreement do I need that will accept a deposit, provide an S&P that the buyer can use with their bank, and promise me an option release fee paid by the seller at closing?

How do I make this convenient for me and the buyer? Iv’e literally spent the last 2 weeks trying to find a solution for 2 different buyers for 2 different properties I have, both bringing conventional financing. It’s a fucking mess and I’m burning time trying to figure this out. I need a smooth process so I can sign up 4 more options this week (not boasting) and 4 more the next week. My brand is HOT right now and I need to keep picking up these properties, but I need my paperwork together so I can work smoothly with conventional financing buyers.

Ideas??? Please??? Thank you!!!

4

Unless you’re finding the financing for the buyers, I’m still unsure what kind of extra babysitting you’re doing here.

Meantime, you invoice escrow for your fee and call it anything you want. You also record your option, and the title company will request, from you, a release of lien, to notarize in favor of the buyer. All this is done at closing.

The title company will issue you a check for the invoice at closing.

Meanwhile, at least, write down the steps included to close a standard conventional deal …the way you do it.

Give this outline to your buyers to follow, or at least understand the process.

This would include simple instructions on how to apply for financing; whom is closing for you; and how long it normally takes to complete a transaction, etc.

You’re going to want a list of hard and soft money lenders that you can send your buyers to, depending on what financing they’re after. Also, you may want to pre-qualify your buyers, so that they can actually perform.

Also, if the buyers want to finance the assignment fee, then it’s just a matter of including your assignment fee in the sale price, and not add an additional fee over and above the price. This is solved by invoicing escrow, as I mentioned.

You may want to get your real estate license, and/or get some training on how to close on a conventional transaction, if what I’m saying won’t work for you.

I’m not sure what you mean by S&P, except if you’re talking about a purchase and sale agreement.

There’s no special sales agreement that I’m aware of that is needed to close on transactions with high-assignment fees. Except that, if you’re trying to flip REO properties, the bank will want you to use the uniform real estate purchase and sale agreement accepted by your state …and disallow an assignment of the contract in the first place.

Of course then, you’ll have to do a double closing, which still requires invoicing escrow. That is, you use the bank’s contract on the first closing, and your contract on the second closing; invoicing the second closing.

Otherwise, why would you think a standard agreement won’t work? What’s been the hiccup thus far?

That’s about it for me.

5

I have actually taken all the licensing course, plus more, in my state. So I’m pretty familiar with conventional financing. I don’t carry a license because I don’t want to carry one.

What is this: Meantime, you invoice escrow for your fee and call it anything you want.

Invoice escrow? what does it mean to invoice escrow?

The hiccup is having everyone confident in the process. I like your idea of having the steps laid out for them, I was thinking of doing something like this. I just need to make it very simple how they can make an offer.

6

Invoicing escrow simply means that you submit an invoice (a bill) for your assignment fee to be paid to you at closing (as a condition of closing).

In other words, just as an agent would be written a check for his commission, at the time of closing, so would you, using an invoice to bill the buyer for your fee.

As far as building confidence in the process; the only person that needs to be confident is YOU. Everyone else lines up behind that. Otherwise, you’re going to come off like you’re doing a hard-sell on the buyer, and put yourself on your heels in your negotiations. Forget that.

When I take over someone’s loan in a Sub2 financing transaction, neither the buyer or seller has ever done a deal like the one I’m leading them through.

Of course I’ve got a script I use to present/qualify and close on them, but by the time we get to the actual closing, it’s just a matter of them signing standard documents. There’s nothing for them to be “confident” about. I’m confident about it, and so, too, will they.

Maybe I’m missing something, but unless you’re a screwball, what is the ‘confidence’ issue you’re referring to?

7

oh you nailed it, the confidence thing is me. Ive never done this before.

8

confidence is the number 1 rule in everything sales, btw

I own 5 discounted options today! (signed 3 in a day yahoo!) i got another 1 or 2 to grab tomorrow and of course I have a lead to follow up w tomorrow. its like the great american option round-up over here. imagine if i flipped 50 options this year!!!

What I need to do is stop trying to figure it out myself and enlist the aid of another professional, such as a title agent or re agent or ever the lender. this is not something that should be in house at all and should be done the way the pro wants to do it

thank you for your time and valuable input. really got my noggin chuggin!!!

9

the part where you mentioned the buyer and seller having never done a deal like one of yours is key. I must be a GREAT teacher. no wonder so many re techies become gurus…