Wholesaling a Flip Property

I received a call from an investor who has decided to not rehab a house they bought from a bank via hard money. I was planning on getting this house under contract then wholesale it to another investor. Can I do anything with the existing hard money loan, or would it make sense to have the end buyer get their own hard money loan?

How do you deal with a seller who says that they are continuing to work on the property until a buyer comes along? How do you figure that into your offer to the seller? I planned on making my offer based on the remaining work that I see needs to be done at the time that I visit the property.

Lastly, I’m concerned about any existing agreements the seller may have with contractors and how this could affect a buyer’s willingness to take on this deal. Any tips here?

Here are the numbers:

ARV - $800K
Repairs - $100K (seller says they’ll complete $50K of this work)
Owe - $300K
Asking - $490K OBO (Yes, they’re investor shopping)



I smell a rotten egg. :grinch You don’t get hard money from a bank. Why would an investor need a wholesaler to sell a property?

How well do you know this investor? I would run the comps, 3 times over. Read up on REI scams.

If I were you… I would offer to find a buyer for a $1,000+ finders fee. Don’t be legally obligated on this property as a wholesaler.

Sorry if I wasn’t clear. What I meant regarding the hard money loan is that the property was an REO that was financed using hard money. Since I originally posted this topic, I’ve done more due diligence, and I feel that the ARV is closer to $750K. Also, the investor says that they’ve put $80K into the property, with another $80K in work needed to complete it. I’ve seen the house, so I believe what they’re saying.

At this point, I’m leaning towards getting an option on the property, since it’s a higher end house and it’s well outside my farm area.




This looks like a nice property to wholesale, but there could be some issues. I did not notice where you are located, but with the high ARV (if this is not typical) could cause a problem in holding costs for the resale and should be considered when making your offer. Secondly, on higher priced properties, investors are typically looking to make a profit approximating the amount of money they put into the project (construction, holding costs and fees). So assume the remaining holding costs and construction are in the area of $100,000, abuyer would want to purchase at about $475,000. (approx. 10% to sell - $100k for money inproject - $100 in profit). If the buyer has to use hard money financing, these numbers will be greatly reduce (my guess would be approximately $400k).

So all this considered, if you could get the property under contract for about $380k, you could be confident of a nice $20k assignment fee. Put it under contract, but make sure you have an out if you are unable to find a buyer.