Wholesale Owner finance.

[Josselyne Lugo]

Hi BP!

I have a question for the more experienced wholesalers out here. 

I have a home under contract and my seller is open to owner financing. I have a cash offer on it but it is taking a bit longer for me to sell this property. However I have had several people interested in owner financing. My question is: is it possible to structure a wholesale deal for owner finance? If so how? The house is owned free and clear. The seller wants at least 20k down and 12 % interest. The asking price of the home is 100k for owner finance. I would really appreciate any feedback and direction on structuring this deal if it is possible.  Thanks in advance! 

[Greg Goldsmith]

A friend was reading this thread, and had some comments that may or may not be worthy of attention, but I'll pass them on for possible entertainment value. As for my own thoughts, I'll refrain. So, without further adieu, from said friend:

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There are a lot of wonderful, well-meaning people on here trying to help others, that's a good thing… sometimes.

Sometimes they are, well, uninformed or misinformed. To paraphrase a famous quote, “It isn't so much that some people are ignorant. It's just that they know so many things that aren't so.”

Some points to consider on the topic of this thread:

The Texas laws, as originally written, regarding certain types of transactions discussed here caused quite an uproar.

What happened later was virtually overlooked, in that the laws were significantly revised before they were passed.

But almost everyone out there still believes that the original proposal with it's complexity and flaws, was what was signed into law. Might want to read the actual law.

There seems to be confusion as to some things, reminiscent of

Abbott and Costello's "Who's On First?" routine ( you younger kids can Google it).

So, in a listed property transaction (Which this WAS NOT), you traditionally have a SELLER, represented by a SELLER’S AGENT, and a BUYER, represented by, you guessed it, BUYER”S AGENT.

(We won’t talk about side issues, such as where a lender might fit in, or of cases wherein an agent is also the seller, or wherein an agent is representing both buyer and seller (dual agency), not important today, and, likely to make some folks dizzy).

In said transaction, normally, the AGENTS have NO VESTED INTEREST in the parcel for sale. They are NOT PRINCIPALS in the purchase of the REAL PROPERTY. They connected the BUYER and the SELLER, and rightfully were paid handsomely for their efforts when title transferred at closing from the SELLER to the BUYER.

To contrast that with the transaction conducted by astute real estate entrepreneur Josselyne Lugo (watch closely), the parties are:

*SELLERS, who have elected to sell on their own, thus creating the mythical and elusive deal, a For Sale By Owner (FSBO) situation.

*BUYER, the aforementioned astute real estate entrepreneur Josselyne Lugo, who is a WHOLESALER.

One will note, NO AGENTS were involved or even aware this was going down.

The BUYER/WHOLESALER finds the SELLER, evaluates the deal, negotiates an agreement with Sellers, and SELLERS and BUYER execute a mutually agreeable CONTRACT, wherein

the SELLERS and the BUYER are the PRINCIPALS in this deal.

BUYER now has Vested Interest via the CONTRACT, said CONTRACT is PERSONAL PROPERTY of BUYER/WHOLESALER, it is not REAL PROPERTY (Simple way to think of this, your mileage may vary: Real Property has a Parcel Number, a Deed, and Address, Personal Property doesn’t).

BUYER/WHOLESALER then elects to TRANSFER her interest in her CONTRACT, which is PERSONAL PROPERTY of BUYER/WHOLESALER,

to a THIRD PARTY.

BUYER/WHOLESALER transfers the CONTRACT, with all it’s rights, to THIRD PARTY, via an Assignment of Contract, for an Assignment Fee.

THIRD PARTY now holds the CONTRACT and ‘steps into BUYER/WHOLESALER’s shoes’, with the lawful ability to execute the CONTRACT under it’s terms and conditions. Still reading?

BUYER/WHOLESALER was NOT representing SELLER or THIRD PARTY BUYER in any capacity. BUYER/WHOLESALER was a PRINCIPAL in every step of the process. BUYER/WHOLESALER was never acting as an AGENT or “BIRD DOG”, rather only on her own behalf. She had no intent or agreement to charge any other party to act as their agent, rather she was a PRINCIPAL PARTY, contracting for an agreement to purchase Real Property, and also contracting to sell Personal Property (a Contract).

Sorry, Brokers and Agents, BUYER/WHOLESALER did NOT poach a deal from your part of the world, which also has free-range real estate entrepreneurs also making deals happen sans a real estate license (Gasp! The horror!), nor did she perform a dreaded ‘Commissiondectomy”, the source of terrifying nightmares for Agents everywhere. She conducted an ethical and legal transaction that was beneficial to the involved parties, by applying her resources, skills, intellectual capital, and hard work.

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Please don’t send hate mail, remember, this was the rambling of another party, who is actually quite fond of Agents, but likes to mercilessly tease them. I’m only the messenger, shucks, I can barely spell ‘real estate’.