Do wholesalers only take "cash" buyers?

Question

Do wholesalers only take "cash" buyers, or would do they work with buyers who have a down payment + private lender/hard lender willing to fund the deal? I'm looking to find a deal that i can BRRRR for my first property in central/southern, NH. I assume there's no way to use a traditional lender to buy a deal from a wholesaler?

Jonathan Greene · Answer

I think you are leaving out an important aspect, the original seller. Just because the wholesaler has a contract and intends to assign it does not divest all decision-making away from the original seller who is waiting on the wholesaler. Due to time constraints in the wholesaler's contract, it can offer be hard to sell to a third party with a mortgage because part of the push to get the deal from wholesaler to seller is speed. A seller who agrees to sell for cash does not want to wait for appraisal and underwriting and that also means more people through the house. It can happen, but it's not a great scenario. Hard money or private money can work as long as the appraisal needed is limited and the close date quick.

John K. · Answer

@Dave Gudek

I don't know if there is a clear cut answer for that.

I would think that most wholesalers would prefer cash buyers, just for the speed aspect of things. However, I have accepted a contract in the past, with financing, albeit with a client that I had done several deals with prior.

I think it would come down to the terms the HML was looking at, regarding the approval or denial of financing. If there are going to be a lot of outs in their decision making, it would be much harder to accept that contract. If they need 3-4 weeks to come to a decision and fund, for myself, that would be very difficult to accept.

I think there is probably a scenario for every situation, where a wholesaler would accept a contract, regardless of terms or days to close. With that being said, just ask and be upfront with them.

Best of Luck

Dave G. · Answer

Thanks for the reply. I'm trying to reach out to a few wholesalers in my area and see if we could work together. I appreciate the help.