Wholesale Question

[Michael Carlino]

Hello BP. I am looking for my first flip property and was wondering how the wholesale process works. Does someone mind explaining this to me? What is a wholesale property and how is it ideal for someone looking to make his first flip? I have been listening to the pod casts and reading up on wholesaling but still don't quiet understand the process. I appreciate any feedback.

[Chris Mason]

Originally posted by @Michael Carlino:

What if I am the flipper buying from a wholesaler? Do I have to pay in cash or can it be a loan?

 It'll be like above, any Fannie lender you go to will be told "no" by everyone at their company, but in theory it could actually be done using Fannie financing just like I did it. Investment property guidelines will apply, unless you are actually going to move in and live there while fixing it up.

The problem you will encounter is that your wholesaler has their little assignment contract, doesn't want to actually close and ever own the place, but somehow wants to sell to you something they do not own, which Fannie does not and will not be OK with, regardless of what all the best real estate lawyers claim.

Enter @Shari Peterson stage left.

At which point your wholesaler and you are going to renegotiate price because you just jacked up that wholesaler's carrying costs so that YOU could have a better interest rate, which ultimately is not your wholesaler's problem or concern.

Orrrrrrrrrrrrr buy it all cash and look at delayed financing. Either way.