Wholesaling - starting out

[Account Closed]

Hi Everyone,

Sorry for the dumb questions but I am a newbie trying to figure things out.  I want to try wholesaling while I am studying for RE exam/license.

I read up on the information on this site on how to find properties and now my question is this:

Let's suppose i find a seller and he agrees with my price.  What happens next?  Get a sale document signed?  Then how long do i have to come up with money?  Do i just give a small deposit until I find an investor?  How long do I tell the seller it will take for them to close and get their money?  With an agreement signed does that mean the seller cannot make a deal with someone else like a realtor or another investor?  

If you could walk me thru a wholesale scenario step-by-step that would be great.

I appreciate your time and help.

Thanks,

Dennis

[Stephen Barton]

1. 1. You get a Purchase agreement signed that also has the ability to assign the deal to another buyer if you are going to wholesale it that way. The other way is you would buy it yourself, close on it, and then sell it to your end buyer.
2. 2. We typically tell our sellers that it will take us up to 30 days to close on the deal. We may be able to say 7-10 days but you do not want to mislead them by saying this if you cannot do what you say you can do.
3. 3. We usually put $500 down for earnest money. This and the signed purchase agreement gives you equitable interest in the property. You now have the sole right to purchase this property and the seller cannot go to someone else.
4. 4. Once you have determined what you are going to do(buying the property) you:
5. 1. A. Get the seller to sign the Purchase Agreement
   2. B. Send the Purchase Agreement and earnest money to your closing attorney or title company.(Depending on your state, Indiana uses Title companies)
   3. C. You market the property only after you have a legal right to do so which is when you have a fully executed contract (Purchase Agreement).
   4. D. Find your end buyer, determine their purchase price, and schedule a closing. 
   5. E. There are several types of closings. We pay twice the closing costs by closing once when we buy and then we pay another closing fee when we sell to our end buyer. A lot of people may laugh at this but when you "Assign" your Purchase Agreement the initial seller(the first person who you talked to when buying the subject property) will see how much money you are going to make. Sometimes even your end buyer may not like this either because they will think they are paying too much for the property to begin with. 
   6. F. Go to closing(s) and get paid.
6. Obviously this is somewhat vague but is the very basics on what to do. I welcome your questions, and I love to give back by helping others. Feel free to contact me for some more questions. If I cannot answer your questions then I will point you in the right direction. Happy Investing