Wholesaling - the step by step process

Buying & Selling Real Estate
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Wholesaling - the step by step process

Carly Turow
Member since 2021 · 57 posts · 16 votes

Hi BP community!

I've been listening to every BP podcast about wholesaling I can find, as well as other podcasts, articles to read, and even YouTube "newbie wholesaling mistakes" to learn as much as I can about the process.

I understand the concept entirely, and the general process. But I've heard a couple different/conflicting messages about the actual sequence of the process.

I've heard that you must FIRST build a buyer's list, and I have also heard that this is not necessarily true because if you find a great deal, the buyers will come (so long as you put it out there in the right places and get the message out)

Once you have a deal with a seller, you then have them sign a purchase sale agreement, which allows you to either buy or assign another buyer. Got it.

But then ---- is it at THIS point after you've signed this with the seller, that you bring that form to a title company ASAP?

OR

Do you then find a buyer, sign an assignment agreement form with them, and THEN bring BOTH forms to the title company (that the buyer most likely likes to work with?)

I also have heard the assignment agreement is easier due to it being a one-step process. However, the double closing (in escrow) sounds really appealing if I find such a good deal that I may make 20k, 30k+ and wouldn't want either party to necessarily know that.

Does anyone know the actual sequence of events?

In both a single closing and a double closing?

ps Other things I am having a bit of a hard time with are:

- finding a purchase sale agreement form to use and have an attorney look over

- finding the assignment agreement form to use and have an attorney look over

- know which title company to "go to" at the time I need to go to them next

- know who to speak to (title company?) about the how-to's of a double closing

- and also.... how to respond if a seller asks me how I'm a cash buyer/how many properties I've bought (none).. Because I have and will be saying that "we buy houses cash. This form allows me to buy your house or allow one of my partners to buy it in cash" and I'm a little worried if they dig into this I'll sound unqualified or not official.

Thanks so much for any insight you can provide guys!

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  • Jay Collins
    Investor · AZ · Member since 2021 · 10 posts · 9 votes
    5y

    @Carly Turow i am going to recommend a few books that would answer all these questions for you.

    - Than Merrill, “The Wholesaling Bible”

    -Nick Ruiz, “Flip”

    -Todd Fleming, “If you can’t whole sale after this, I got nothing for you”

    There are other books but start here to educate yourself on the business of wholesaling with guides, contracts, scripts which are included in some of these books.

    2Reply
  • Carly Turow
    OP
    Member since 2021 · 57 posts · 16 votes
    5y

    Thank you @Jay Collins ! I appreciate the book suggestions. I’ll get after it

    0Reply
  • William Allen
    Investor / Wholesaler · Nashville, TN · Member since 2014 · 1k+ posts · 667 votes
    5y

    @Carly Turow, the title question is preference and will come with experience.  When I started, I didn't send the contracts to title right away and did inspections and reached out to my buyers list first. However, we now send them straight to title because if there is an issue with the title, liens, judgements, etc... we want to know as soon as possible. And it's been proven time and time again that sellers aren't forthcoming about these issues or sometimes genuinely aren't aware of them. 

    I would suggest building your buyers list and looking for leads at the same time.  If you were a flipper I would recommend raising money and looking for deals at the same time. 

    Answers to questions: 

    Does anyone know the actual sequence of events?

    Here is ours currently:

    Put house under contract using assignable purchase agreement, send that contract to the title company, email / text buyers list marketing our contract for sale including photos and any other details we have, setup a time for our contractors and any buyers to see the house, negotiate the assignment with a potential buyer for the contract, send assignment to title company, close the deal. 

    In both a single closing and a double closing?

    Same as above for double closing, we use the same contract with the buyer but have the option to double close if needed.  We try to use the buyers money for this if at all possible and it usually is but if not we will use the company or my personal money (or transactional funding via a private lender if needed). 

    ps Other things I am having a bit of a hard time with are:

    - know which title company to "go to" at the time I need to go to them next

    Ask around to find out where your local wholesalers are closing there deals, this is the place to go!

    - know who to speak to (title company?) about the how-to's of a double closing

    Title company or attorney that you use can walk you through this, however, always try to use the buyers money if you can and if that title company tells you they can't do that or it's illegal keep looking!

    - and also.... how to respond if a seller asks me how I'm a cash buyer/how many properties I've bought (none).. Because I have and will be saying that "we buy houses cash. This form allows me to buy your house or allow one of my partners to buy it in cash" and I'm a little worried if they dig into this I'll sound unqualified or not official.

    Be honest, this is the key. Don't say you have done a ton if you are brand new. They will appreciate honesty and they really just need their problems solved. If you can do help them, that is all that will matter!

    0Reply
  • Carly Turow
    OP
    Member since 2021 · 57 posts · 16 votes
    5y

    @William Allen that is incredibly helpful. Thank you so much for really laying out the process. I bought the audio book “if you can’t wholesale after this I’ve got nothing for you” and what I’ve learned so far in the book is perfectly backed up in your reply. I feel way more aware of the process now. Really, thank you so much!! 
    I’m sure that once I get and close one deal I’ll find ways to streamline it better the next time and it’ll get better and easier with experience. Thanks so much!

    1Reply
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