Questions for Experienced Wholesaler

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Questions for Experienced Wholesaler

J J
Member since 2008 · 15 posts · 0 votes

Hello I'm new to wholesaling. I have read books and went to wholesaling seminars. I have decided that I want to assign contract to investors. Went to a couple of the guru's seminars(free one's) they always tend to leave alot of information out.

The part where I'm confused is contracts. I have never owned a house before so I have never seen a Purchase sale Agreement aside what the seminar guru's gave me. I know I'm suppose to have a Real Estate laywer to look over my contracts but I cant' afford one right now.

How many pages a standard contract should be?

I can't afford a laywer to view over my contract, so is it ok to get my contratcs from Office Depot?

What are the steps of wholesaling once a seller accepts my offer?

Who pays for the closing cost? I was told that either me or the buyer has to pay.

My goal is to rack up as much money from wholesaling to eventually buy and hold a property. I want to pay my debts first.

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Ryan Webber
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
18y

I use a simple one page contract that I copied from someone who copied it from some guru. As long as you have the contract basics - parties, consideration, and legal description, your contract will probably work.

Now when you start getting into each states property code and state specific laws, there will be additional factors to real estate contracts that are good to know and that can make a real difference.

For example in Texas, if the Seller doesn't provide the Buyer with a Seller's Disclosure of Property Condition, then the Buyer can cancel the contract up to the day of closing and can cancel the contract up to seven days after they receive the disclosure if it wasn't provided before signing the contract. That's good to know info when you are doing a deal in Texas.

Now as for practical advice for you I actually am going to dissent from everyone else on this one. Go to the title company or to your state's real estate commission's web site, get a contract and get out there and get a deal. 9 times out of 10 you are buying distressed property from people who don't care what the contract says anyway. They just want their money, and I don't know if dishing out the $500-$1000 for a lawyer to write up or look over your contract is the best use of your initial funds.

Now let me say that is my "unofficial" advice. "Officially" you should ALWAYS contact a lawyer to look over all of your contracts.

Also if you are wanting to learn your state's contract idiosyncrasies, I would recommend that you take a real estate law of contracts class. The class is a standard class for new realtors and it will help you tremendously in understanding contracts. Your local community college would probably offer it, and you could probably find an online study of it also.

As for your other questions about wholesaling, it sounds like you need to read through the wholesaling archives at BiggerPockets. There is a wealth of information here, and I would highly recommend you use it to the fullest.

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  • Account Closed
    Real Estate Investor · Chicago, IL · Member since 2008 · 1k+ posts · 218 votes
    18y

    Ok, you can use a plain vanilla contract, but many investors, including myself, won't touch them. We would have to vacate that one and replace with our own.

    To your point about not being able to afford an attorney, you might not be able to afford not having one! Spending $500 now might save you Thousands later! When you have a crappy contract that you are stuck in and no investor will come bail you out.

    There is no set length to a contract, rather it is dependant upon the laws in your community. What you want is a contract that covers all basis of a transaction.

    Many title companies have a standard form, as do most realtor associations, but even those are always reviewed by attorneys in the end during the standard Attorney Review period.

    Maybe it might be wise to start simply birddogging properties and work your way up to a place where you can be comfortable not only with a contract, but putting your name on that contract.

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  • Ken Bateman
    Real Estate Investor · Harrisburg, PA · Member since 2008 · 35 posts · 1 vote
    18y

    I agree - start with bird dogging....and also find out about local investors groups in your area - there you will meet people with varying backgrounds, each with their own field of expertise...you'll meet investors that you can bird dog for....hear all kinds of stories, both good & bad, etc, etc....oh yeah - and read everything you can, especially on places like BP....Go US...!

    Good Luck - Ken

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  • Dana Odoms
    Specialist · Tomball, TX · Member since 2008 · 4 posts · 0 votes
    18y

    I would have to echo with not simply going to Home Depot.....You need a GOOD contract. So save up for the lawyer and go for it! I asked this question to a couple of (serious & experienced) REI's too and they all said that they got their lawyers to help them.

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  • Dana Odoms
    Specialist · Tomball, TX · Member since 2008 · 4 posts · 0 votes
    18y

    I mean *Office Depot* :D

    0Reply
  • Ryan Webber
    Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
    18y

    I use a simple one page contract that I copied from someone who copied it from some guru. As long as you have the contract basics - parties, consideration, and legal description, your contract will probably work.

    Now when you start getting into each states property code and state specific laws, there will be additional factors to real estate contracts that are good to know and that can make a real difference.

    For example in Texas, if the Seller doesn't provide the Buyer with a Seller's Disclosure of Property Condition, then the Buyer can cancel the contract up to the day of closing and can cancel the contract up to seven days after they receive the disclosure if it wasn't provided before signing the contract. That's good to know info when you are doing a deal in Texas.

    Now as for practical advice for you I actually am going to dissent from everyone else on this one. Go to the title company or to your state's real estate commission's web site, get a contract and get out there and get a deal. 9 times out of 10 you are buying distressed property from people who don't care what the contract says anyway. They just want their money, and I don't know if dishing out the $500-$1000 for a lawyer to write up or look over your contract is the best use of your initial funds.

    Now let me say that is my "unofficial" advice. "Officially" you should ALWAYS contact a lawyer to look over all of your contracts.

    Also if you are wanting to learn your state's contract idiosyncrasies, I would recommend that you take a real estate law of contracts class. The class is a standard class for new realtors and it will help you tremendously in understanding contracts. Your local community college would probably offer it, and you could probably find an online study of it also.

    As for your other questions about wholesaling, it sounds like you need to read through the wholesaling archives at BiggerPockets. There is a wealth of information here, and I would highly recommend you use it to the fullest.

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