Hello friends,
Hoping for some expertise.
Situation -
I have an REO property I want to wholesale which is listed on the MLS. I have a very interested buyer who wants to see the property. This will be a cash deal all around and a nice one… BUT-
How do I lock it up while it’s on the MLS with a real estate sign out front? I can’t show him or he could go around me and make a direct offer. I can’t use financing clauses since it’s a cash only deal and I must show proof of funds. If I lock it up and he doesn’t want it, what would be my exit strategy? It’s an REO listed “as-is, no inspections or repairs”.
First of all, you can’t hide the fact that the house is listed on the MLS and a Realtor is involved.
You can make an offer directly to the Realtor or do like I’m doing and get yourself a buyer agent to represent you. Tell your agent how much you want to offer and they can write it up for you and submit it to the listing agent.
You can use transactional funds to fund your part your purchase of the REO property from the bank. You can then have a second contract between you and the end-buyer. Your end-buyer would have to use the same settlement company you use for the first transaction and close on the same day. The transactional funds would fund the first transaction and get paid from the second closing.
Another way to sell the house to an end-buyer would be to add the end-buyer as a co-purchaser on the contract. After the deal closes, you can quit claim your share of the house in exchange for your assignment fee.
The above are just two ways you can wholesale an REO property to an end-buyer. There are other ways.
If they call the realtor, the realtor will tell them it’s under contract and won’t release further info if you get the deal accepted. If they are accepting back up offers then the investor can join the club with the rest of them who are offering and if they are offering. The deal is yours if you put your earnest money up. The bank by contractual right has the ability to go with another buyer if they want but they normally don’t
Only on pure cash deals do you have to submit a bank statement. Transactional funding is more like hard money, so you should submit it as a hard money contract. They won’t ask you for a statement.
IF you put your deposit up you have 7-10 days via your inspection period to wholesale and back out without losing your deposit if there are no contingencies
Hi I want to add something. Hard cash is expensive. It should only be used if there’s no other options. I don’t get it. Are you suggesting to use hard money?
Thanks
I’ve purchased one like this. A good creative title company is a GOLD MINE. I was the end buyer and have NO PROBLEM paying for people that bring me deals. The REO property had to be closed at a particular title company that assured us they were competent about double closings, but about a day before the closing, we found out different. They expected my seller to bring full funds and close, and then me to bring full funds again, and then he’d get it after all was said and done. No way would they let me bring the funds to close his transaction…
Get this…
Our regular title company, based on a title commitment from the original title company, did the sell close with me funding it to them, and issuing title insurance to me, and then issued a check to the original title company so that the initial part could be closed.
Essentially we did a double closing with two title companies! Ponder that!
Open your minds…ANYTHING can be solved with creativity and outside the box thinking…provided you ask the right questions and open your minds to it!
I am not telling you to get Hard Money. I’m telling you hard money and transactional funding are submitted the same way. Transactional funding has to be submitted to the bank as Hard Money.