Wholesale contract example? Seller and Assignee only

[Meg Roman]

Hi - I'm looking for clarification on wholesale contracts. Each contract example that I've seen has three parties: Seller, Assignee and Buyer. If I understand the process correctly, I, as the Assignee, will first enter into a contract with the Seller. Then later enter into a contract with a Buyer and bring the two together in a double close transaction.  It seems like this process would require TWO separate contracts. Does anyone have an example of a contract just between the Seller and the Assignee, before there is a known buyer? Or do I have to sign a Purchase Agreement between me and the Seller? If that's the case, how do I protect myself and get out of the agreement if i can't find the right buyer?

[Chris Piper]

Hey @Meg Roman I know it's kind of confusing. You need two documents to wholesale a property: 1. Purchase agreement 2. Assignment contract 

I have uploaded both of these here on BP. At the top of the page, go to tools>fileplace>contracts and you'll find them there.

On the purchase agreement I've uploaded, you fill your name in the very first blank space, that's it on the first line. Then fill in everything else (seller info, etc.), and at the end of the 3rd page where there are multiple blank lines, write "Subject to partners approval within 15 days of the date of this contract." This way, if you can't find a buyer, you can say your "partner" who is imaginary of course, didn't approve this purchase and all you lose is whatever earnest money deposit you paid. DON'T get tricked by sellers into thinking you have to give them a huge earnest money deposit of $2,000-$3,000 or more. I NEVER do that, and I wouldn't recommend you do it either. Put $20 in the contract. I do, and if they don't accept it when I am trying to help them out of a bind, then cancel it and move on to the next deal.

On the assignment contract, you are the "Assignor/Seller" and the cash buyer is the "Assignee/Buyer." Always get a NON-REFUNDABLE deposit of at least $2,000 from your cash buyer. That way, if they flake out on you and back out or can't close, you still keep their deposit. If they ever come back to you after bailing on a deal, I double the deposit to $5,000 because they are unreliable. If they do it again, raise it up to $10,000 or just don't deal with them at all any more.

A double close costs about $2,000-$3,000 to do. That's when you do two closings on the same day. A to B (Seller to You) and B to C (You to Cash Buyer). You really only want to do that if your charging a huge profit on a deal (Anything over $10,000) or if you have a deal that can't be assigned, like a HUD maybe or a Fannie Mae deal. Hope I cleared it up for you.