Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Updated over 6 years ago on . Most recent reply
Wholesaling properties - closing, assignment fees, transac. funds
What's up BP,
My first wholesale deal is in the process of closing right now. I didn't do amazingly, but it's something; and I created a win-win-win scenario, which is my favorite thing about wholesaling.
I really want to start a discussion about the logistics of how you guys (pro's) close. I did probably the least recomendable closing for a newbie, it is a true assignment of contract without a double close. This means that everyone, buyer and seller are painfully aware of how much I made during the process and exactly what I was doing. I actually had to state what my fee was on the amendment to the contract for purchase and they had to sign it!
I jumped in to this without all the knowledge and it worked out for me, like I said everyone was happy, a true win-win-win, but I know I won't get this lucky always so I would like to know some different strategies to make sure that wholesales go smoothly.
I live in a "wet financing" state, so in order to double close, I have to bring my own money or hard money to the table. I guess in some states you can close with the money from the B-C transaction to close the A-B transaction, at least that is the way it used to be. I am starting my career with very little money and it's what has attracted me to wholesaling. I am a hell of a hustler and I could sell a snowcone to a swede, so this side of the business is going to help me get started, but I need some pro tips about how to close.
What do you use? Do you buy outright? Do you find private lenders for the transactional funding? Do you just have a stellar system to assign the contract, transparency be damned?
Most Popular Reply
@John Stewart I've done a hand full of wholesale deals in the Chattanooga area. I've only double closed once. All other times it was a strait assignment of contract. I haven't had issues personally with transparency. I tell everyone involved what I am doing, and so far I have not had a deal fall apart from that conversation yet. I have deals fall apart for several other reasons, but that happens. I am pretty sure there are a couple of Title companies in Chattanooga that do seller side HUD only, I would have to go back and check. But that can certainly be another option. Hope that helps a little, I am happy to answer anymore questions.
Great to hear John! Congrats!
I've done transactional funding in the past as well although it's been awhile since the last one. I think the assignment of contract is probably the cleanest (cheapest) way for you to go. It's true you can try to put both sets of closing costs onto the end buyer but it's more transaction costs and time and generally not convenient.
I've actually bought a couple homes from @Micah Hall over the years and have never minded paying the assignment fee. As long as the math works for me and I like the deal I don't really care how much the wholesaler makes. The math is the math.