Ive found many properties to possibly flip but normaly they require earnest money of $1000 .So say on January 1 I contract a property.I set a 45 day closing on a cash offer.What if I cant reassign the contract ? Do I have to buy the property? Do I loose my earnest money If I dont? Does the person I assisn the property to should I be so fortunate;have to have cash? If not how would I get the appraiser and all the mumbo jumbo past the origional seller?
I (personally) would set myself up to have financing in place if the deal looks good to you. Also, I decide what to put down in earnest money, rather than the owner. Will $200 (or $500) suffice in earnest money to secure the purchase of your home? If it is not a property that you would personally want to own, you could most likely put stipulations in the contract that would kill the deal if that were your choice. ie based on securing a loan on the property of no higher than 7.5% interest and no more than 2 points. The last contract that I signed included a bunch of stipulations… based on inspection (no termites, no water damage, no structural damage, and about half a dozen other things…), just enough to get out of the deal if I needed to and annoy the realtor (I was embarassed by my offer and embarassed with the concessions… so the deal must have been good). Course I wanted to purchase the property but didn’t want to get stuck with a house with major problems.
You would be in violation of the terms of the contract and you would have to comply with the terms you agreed upon :-[
Yes you would! (This is based upon what terms you may or may not have used)
Sure you do if stated as such in your contract
Say what ??? Why would you want to assign a contract to someone with no money. How would you get paid? Why would you want to get past the seller and the appraiser as this is not a win win deal.
You can do a doubble close and the seller does not have to know!
What type of courses have you taken? I would suggest going to: http://www.reiclub.com/real-estate-courses.php before you jump into the flip game
Thank you for the response .Im still a little confused though on the fee. If I set a contract price of $20,000 and I advertise the property for $35,000 there would be a $15,000 fee for me .However if my buyer needs financing and Im not willing to finance how would I get the appraiser and my buyer in the house without the origional seller aware of what Im doing , and would a bank even finance a flip for an end user.MY FEAR is not being able too find a property but finding a buyer before Im obligated to buy.
thanks charlotteplayer ,
I was under the impression that you only had a 3 day right of recession on a refi?
Like CharlottePlayer said “Or just tell the seller that here is 10 dollars I would just like to secure the property until I go and get the money (from your buyer). And remember that after a contract is signed you still have 3 days to call it off. Hmmm why is that technique not in a course?”
So back to reality, one can choose to believe you can lock in deals for $10 or you can do things the correct way in this game. Yes in some vary few cases you can get a property under contract for $10 so give it a try locate 10 properties and see how many you can lock in for $10 but I would not suggest trying this little experiment in your direct market area try another one as your reputation is on the line.
If you are planning to get into the flipping business, you will need to have everything in place.
First, you need to study and research the market. So what market area will you be dealing in and what kind of market is it?
What knowledge base do you have about the art of flipping?
CharlottePlayer is correct about one point you must have buyers in place but without the knowledge on how to pre qualify the buyer your success will be limited.
I have only been an investor for 20 plus years full time but what do I know? :
You will get all kinds of advise some good and some bad so you can go with what sounds good and easy or take the advise that will drive you to success!
Good luck on your real estate adventure
Thank you for your response they have been helpful.I would like to think I could find buyers before finding homes but I tried that and it seem as thoughwithout being a realtor people didnt feel confident working with me.and without a realtor how would I find comps sold in another town for example Sprinfield missouri?
Also campbell i thought you said you were looking to assign the deal. If this is true you usually assign deals to other investors. That way you dont have to worry about feeling strange about not being a realtor. But if you wouldl like to sell immediately to another buyer then that is where you build trust and credibility. Selling retail is when you would use a strategy called double closing. And that subject is a lot more complicated than just assigning a deal. This is a little on how it works just be honest and let the buyers know that you are an investor that may in the next few weeks might come across a property at a really good price and if they are interested you will contact them. This usually works and being a realtor will never come up and if it does just let them know that since you are not a realtor they can look for an even better deal because you dont have to pay some realtor to sell your house. Just try to think creative so you can handle all the concerns of your clients.
Thanks for all the info charlotteplayer,
Very helpful !!! I dont currently have a contract to assign I was just wondering how these guys wholesale without being a realator or loosing their capital (earnst money) on deals they cant assign.I have delt with wholesalers here in south florida to get my properties but everyone of them was a realator with a wife as a mortgage broker and they have all dried up as the market overinflated itsself.So instead of sitting around with my thumb in a plum I was thinking of starting to work in another area of the country but cant get over how to do it without having knowledge of the area.
If you cant assign the deal then you should consider back to back closings. If there is any equity that you can tap into.