Wholesale Deal, signing Contract tomorrow, so need a bit of help

Bird Dogs, Wholesaling
1

Ok, got a house that is tax appraised at 62.2k. FMV is 67k. Needs 10-15k worth of work. I found the property through probate. Seller has agreed to take 12k for the property.

So, I am going to get my contract signed with like contingencies in there about inspections, and …? So question number one, what other contingencies should I put in there to allow me to back out if for whatever reason I don’t want to close on it. I easily have the cash to do it, but I just want to make sure I have a good out.

Ok question number two. I already have a buyer at 17k, however, they will have to get conventional financing to do it. We already have contact with a few banks that will finance for this low of an amount. So will a bank finance a property that has a contract with me with the seller and then my contract with me with the end buyer? I had figured when doing a wholesale deal was to do with the end buyer that is using cash. However, this is not the case here.

So since they will need financing. Will I have to close first before they can attempt to get their loan? If not, how do I do this so that it works without me having to close and me just getting the 5k for assigning the new contract.

I have never done a wholesale deal so this is a bit new to me, but I am pretty familiar with all ends of real estate. So any help will be extremely appreciated.

Thanks in advance!!

2

Others may have a different idea, but here’s what I would do:

Do a Purchase Agreement with the seller. Make sure you have the right to assign the agreement. Plus, make sure you include an escape clause such as making it contingent upon inspection, or contingent upon approval of buyer’s partner, contingent up financing acceptable to buyer, etc.

3

Ok, yea, that’s pretty much what I was thinking with the contingency clauses.

But my real question is if a bank will loan out on an assigned contract?

4

Hi,

No a bank or lender will not finance the assignment amount as it is not included in the contract and can not be included in the HUD 1.

You will need to create a 45 to 60 day closing period, should give your self a inspection and approval of partner and want to try to get the contingency to stand as long as possible during the escrow period.

You will need to get your end buyer mortgage approved and in escrow B-C and need to get inspections and appraisal done as fast as possible after knowing they are approved subject to appraisal and inspections.

Once your buyer removes all his contingencies and a closing date is set you will then need to close your A-B purchase all cash just like a transactional funder would do the day prior to closing to your B-C end buyer.

                          GR