I have a property under contract and would like to wholesale it to a rehabber. The place is in pretty bad shape, lots of junk around, smelly carpets, did I mention lots of junk laying everywhere?
Do the experienced wholesalers out there find it’s easier to wholesale a property if you spend a couple of hundred dollars and have all of the junk and carpets removed?
What is the rehabber expecting to get for the wholesale fee? Are they looking for contractors estimates, comps etc. to help them make their decision or are you just handing over the property to them?
Do most simply assign the contract to the rehabber or do they go to the trouble of doing a double closing?
Thanks for any info you can offer. As you can see, I’m new to the wholesale business and see this as a way to free up some badly needed cash.
Congratulations on the contract. I am still working on my first wholesale deal, but from what I understand the best way is just to assign it to another wholesaler. A double closing would means your name goes on the title and that may not be something you want. Hopefully you will be able to get more professional advice from the fine folks on here.
It never hurts to remove junk and clean it out. One less thing for the rehabber to worry about and it helps them evaluate the property better.
All experience rehabbers will do their own estimates or have their contractor do it for them. It is a good to be able to give them a ballpark repair estimate which will help them decide if they even bother to visit the property.
Assigning is easier than doing a double closing. For your first one, I’d suggest going that route.
what will be the retail value after the property if repaired
how much are repairs
is there any equity?
how much is the remainder of the loan?
so…
your fee should be 10% of #2
if your fee and the price of repairs are more than the equity then call loss mitigation of the lender and get them to knock of the total amount of repairs and your fee and accept that amount as full payment.