Paying out to Agents for wholesale deal

[Daniel Yoo]

Hey BPmembers, I'm a newbie to both BP and REI. I've got my first deal in the pipeline.

Found this deal on the MLS using a Realtor.
3/2/2 - 1628 sqft.
List Price 79,900.
ARV comps are coming in at 104-105,000.
My repair estimates are coming in at about 6,000.

So I offered 57,600 for the property. My Realtor sent in the offer and guess what...IT WAS ACCEPTED! BTW, my option period is 30 days and I paid $50 for the option fee, $1000 for my escrow amount.

I've got a rehabber who wants to buy this property from me all cash. I told him I would sell it to him for 61,600, which means I would get a $4000 assignment fee.

And here's the questions:

1. How do I assign the option for this contract over to him?
2. Will the rehabber need a Realtor to do this?
3. Does my buyer's agent get paid a commission in this wholesale deal? Who pays for his 3% (me or the rehabber?)

Thanks!

*EDIT* I understand that if I were to rehab this property myself, I would have made a nice chunk of change. But I'm not interested in rehabbing...not yet anyways. I'm totally new to this and want to get wholesaling down before moving up to the next level.

If there are any rehabbers out there who are interested in getting great deals like this in the Houston area, please let me know. Thanks!

[Ryan Webber]

The biggest issue is if its an REO or not. If its a normal seller, then you can double close it to your buyer or you will need to amend the contract as Justin and Craig referenced so you can assign it.

You probably used Texas' promulgated "TREC" contract, and it does not have assignment language in it, so you will need to either amend the buyers name to your buyer or add "and/or assigns" to your name IF you want to assign it.

If its an REO, assigning the property is not an option, and you will need to double close the property. You will need to be able to pick the title company in order to do that. Find a title agent who will do double clsoings. If its a Fannie Mae REO you will also need to double check if there are any deed restrictions on reselling it.

I wouldn't recommend Justin's strategy of quit claiming it after closing. One because what he described is pretty much a double closing and the title agent can do it, and two, a quit claim is a no-no in Texas. You would want to use a special warranty deed. The bigger point being, just use the people that know what they're doing (i.e. title agents and attorneys).