I need help/assistance, Im just getting started and want to try wholesaling, seems less risky rewards not as great but from what im hearing its a good place to start,get to know the biz. My ques., are what forms exactly do i have to fill out i have quite a few, and know i dont have to fill out all of them just want to make sure i get the ball rolling and not get stiffed on my assignment fee.
All you need is a purchase contract that is assignable. Once you get a property under contract, you need a one page assignment agreement that states who you are assigning your right to and the fee for that assignment. Hope that helps.
Tom is right. It is also a lot easier than you make think.
Good luck.
Brandon
So purchase agreement goes to title Co. and assignment agreement goes to invester. Ok got it. thanks for your help, i really do apreciate it.
I have a question on this: What if I sign the purchase agreeent with “AND OR ASSIGNS” on the contract so that I could assign it to an investor, but I’m having a hard time finding the investor to buy the contract…Is there a way out of the deal altogether if I cannot find someone to assign it to?
Also, what is a typical fee for an assignment deal? I’m thinking 2% of the After Repair Value. Any thoughts?
-Ron
whats up Ron. Im pretty new at this but from my understanding, you can install clauses to leave yourself an out (i.e. subject to inspection,title,etc). I beleive you also have 30, 60, 90 days to either buy or assign depending on how long you told/made the contract for. If none of the terms are met then you will lose your down payment/earnest money
Do all that you can to find a buyer ASAP.
What have you done so far to find a buyer?
:biggrin Does $10 - $100 risk on a wholesale deal to make typically $5-$10K = not a great reward :bobble
Forms are the easy part if you would like to get going wholesaling properties. First find buyers, then put the home under contract using an assignee clause and an escape clause, I prefer to use the 10 days for inspection clause because many reo’s allow for that anyway. During the 10 day period get your buyers through and assign it. If none like it use your escape clause to get out. When you write the offer make the earnest money due upon release of the inspection clause, that way if you back out using your inspection clause you have no risk because no money has changed hands, if you assign the contract get the non refundable earnest money from your buyer. That is a very basic outline. I hope this helps
Hello…
I am a new real estate investor and I have a question. I want to wholesale property in the beginning so that I can increase my cash flow. I found 2 properties and found another investor that may be interested in acquiring the two properties. My question is that he indicated that he only pays $.60 on the dollar. Can someone explain this to me so that I get a better understanding.
Is the reference of $.60 on the dollar made on what my assignment fee would be? HELP
Many thanks.
Runner6
No $.60 on the dollar means for example if you had a $100,000 property he would only pay $60,000 for it.
Runners:
If your buyer takes 60 cents on the Dollar, then you want to get the property under contract for at least $0.55. Then you make $.05.
Ok… the next step. You’ve got the property under contract… you’ve found your buyer and created an assigment contract… what other type of due diligence does the wholesaler need to do?
When you put the property under contract, do you then take the contract to a title company to do a title search?
If that comes back clean, then what?
(i’m sure these are pretty basic questions… just trying to figure this stuff out)
Yes, as soon as you get the property under contract, take it to the Title Company so they can start the Title Search. Concurrently, get your buyer lined up. You should have already gotten comps before you put the property under contract. That way, you have a good idea of what your assignment fee is.
So when a buyer says that they will pay .60 on the dollar does that include or exclude repairs?
Also, I assume that paying .60 cents on the dollar is refering to the ARV and not the asking price. Could someone clear that up for me?
Thanks
Aarron
Personally…I think escape clauses in contracts are a bunch of crap. Regardless if its a REO or a fisbo deal. If you can’t wholesale the deal then expect to buy it. Plain and simple. The seller is expecting you to perform.
You already know what the property needs for repairs right? So why put an inspection clause in there? Just to have something in writing so if you can’t wholesale it you can back out? That’s bad business. Your name will be mud and word travels fast in the real estate circles.
Plus your buying it at a great price, right? So worst case scenarion is you have to close on it, rehab it, and make money in the end. Or…buy it and continue to try and wholesale it. Weasel clauses are not good for business.
Nate-WI
They are usually referring to the 60% of the ARV.
I had a situation where my contract was about to run out b-4 I wholesaled the deal. Turned out my wholesale price was too high, even though my price on the contract with the Seller was excellent.
I was prepared to close on the deal myself. However, I got a 1-week extension to the contract & wholesaled it at a lower price (I still made a nice profit.)
If your price with the Seller is too high, which could be evident if you cannot wholesale it, then you may need to negotiate a lower price - use contractor estimates if you have to. Your contingency (inspection, etc.) in the contract should allow you the time to do this.
Also keep in mind that even if you make $2K wholesaling a deal (considered low), that’s better than not closing at all.
How do you do an assignable agreement? Do you just put you name followed by “and /or assigns” on every line?