Hi All! My husband and I invest in real estate but we mainly buy and hold. we have not done a wholesale. We are currently trying to do our first wholesale and I do not want to pay double transfer tax by settling on the property and then re-selling. Title companies that do assignments??- not in our area - I have been to them ALL!! I have the property under contract with the seller. I have a buyer for the contract. The buyer either wants to #1. have me go to settlement with the original seller and then go to settlement a 2nd time with the end buyer (in this case I will pay double transfer tax) OR #2. Have my wholesale fee placed on the settlement sheet as some kind of fee and draw up a new contract between the end buyer and the owner/seller (so I don’t pay double transfer tax). My questions are:
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Is there ANY other way to do this? As this way the seller will know how much I am making off his property. I am pretty certain he doesn’t care as he just wants it sold - but I would still rather not have him know the wholesale fee I am charging the end buyer.
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What do I call the fee on the settlement sheet?
Thanks for your help! The end buyer has clearly bought from wholesalers before. He asked me to fax him MY contract with the seller - to which I refused. Not really his concern what I have the property under contract for - it shouldn’t matter as long as his numbers work for him when he evaluates what I am asking for the property. Am I correct? Thanks for you help! I am going to continue to read through the threads in the forum to see if I can get any additional help! April
The end buyer want to make sure you do have it under contract and not trying to pull a fast one. Let the end buyer talk to the seller because you have it under contact no worry.
Assignments are iffy these days with title companies. If it’s a cash deal, there should be no issues. But, better than any assignment is the double-close. My experience has been it’s just as easy, but your buyer can’t see what you’ve contracted at with the seller.
I use two PSA’s instead of one and an assignment contract. And, my title company sends me over a piece of paper, saying that I’m using my buyer’s funds to close (A to B). And with that, it’s closed. I don’t even attend the closings, unless I want to.
If I were you, I’d contact another wholesaler in your city and find out what title company he uses.
Title companies are getting scare of using the end buyers money to closed the A to B transaction. If it is question later on the title company will have to reveal it.
If the end buyer is going to take over your position in the sales contract and be bound by its terms and conditions, then he has a right to see it before he agrees to it. Not all sales contracts are created equal. On my 1 deal (I am new too) I blacked out the sales price and let my buyer look over the contract. Once, he signed my assignment contract and paid the deposit, I gave him an unaltered copy.
Once you do more deals and become friends with the title company they’ll loosen up. I did 2 closings to day with 2 different contracts and end buyers and the title company used end buyers money to fund my purchase. Yes I did do a double closing simply because I didn’t want the end buyers to know just how much I was making on the deals. I was more than most people in my area make in a year and I want to flip another one to these guys when I find one so I don’t wanna piss them off and have them think I’m taking advantage of them.
I don’t know what the transfer taxes cost there but we are a abstracting state and it only cost me a couple 100 more dollars to double close.