What should every wholesale contract contain? out clause, assignment clause, proof of funds, closing date, nonrefundable deposit just in case the deal goes sour.
You should make it as simplistic as possible. Basically your “out clause” is the closing date. If you haven’t closed by the closing date the contract is null and void and you either re-do the deal with the seller and resign a new contract or you wash your hands of the deal. Anytime you have a purchase contract and you exceed the closing date on the contract, the lender will require an updated or extension of the contract, therefore this is your out.
You have to have an assignment clause as well or your stuck with the deal - the contract would not be assignable.
I personally do not require proof of funds, pre-approval letters etc - it means nothing to me so I do not use a clause. Email me on this one!
Non-refundable deposit I use on the assignment contract and is definatley necessary. I do not give a deposit to the seller. I have 15 days to sell my contract and it’s usually good enough.
I have other clauses as well that I prefer to use to protect myself.
I don’t have an inspection period, finance period, appraisal period.
Hope this helps.
I’m new to the whole birddogging/wholeselling thing and anxious to start my first deal. I’ve found a property, but don’t exactly know where to go from here. How do I get the standard forms and contracts? How do I know what’s legal and illegal here in Texas? I’ve been told flipping is not legal. I have a realtor, and we’re submitting a contract w/earnest money. Where do I go from here?
I’ve used the formulas suggested on this site. I’ve had the repair costs professionally calucated, appraisal and so forth. What’s next?
I’ve noticed that some investors say a fair fee is $500, the article states $2000-$5000. I’m really ready to begin!
Hello Chemistry_101,
Check out these articles listed on the REIClub website. It is very helpful for newbies. http://www.reiclub.com/art/find.php?cat=Flipping%20Properties,%20Wholesaling
I recommend “Steve Cook” He has lots of great information about Wholesaling.
Hope this was helpful! :bobble
I found a article that will answer your questions about flipping is not legal. This should be helpful: http://www.reiclub.com/articles/illegal-flipping-lender-seasoning
Also, I found a website that has free forms. The forms can be enhanced based on your sale. My advise is to have your attorney review your forms before you sign it. (try pre-paid legal if you don’t have an attorney).
Here is a site that has free forms:
http://www.alllaw.com/forms/real_estate/
Also, check out this website, there is a lot of helpful information out there: http://www.creonline.com/index.html
I feel like the information guru. :biggrin