Questions about Wholesaling in Texas

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I've studied wholesaling for a while and put it off to the side for about three years. I've gained a lot of knowledge and now want to pursue it full-time but I have some specific questions.

I will use a TREC contract in stead of these Option contracts - I know this works best in Texas and believe in the KISS approach. When you fill out with seller what do you put in the Earnest Money area - leave it blank or put to be determined? I don't know if the buying investor has a preference.

I want to use the Termination Option for 30 days or longer? Your thoughts and experience?

For Special Provisions I only plan to include -
1. Buyer may sell, assign or transfer all interests and rights in this contract - I will also make the seller fully aware of my intentions
2. Possibly a 10 business day satisfactory inspection clause
I don't want a bunch of "out" clauses - your thoughts?

I will use an Assignment of Contract I put together from finding many others on the net:
Do you indicate the buyer will deposit X amount non-refundable earnest money deposit and your assignment fee or do you just indicate your assignment fee?

I also plan to use a Non-Disclosure / Non-Compete to try and prevent behind my back deals. I just don't know if that would hinder me - requiring interested investors to sign this document before revealing the property address, etc. - your thoughts?

I do not want double closes so I will just assign my contracts so:
Do you get your fee, turn over the paperwork to the investor and go on to the next deal or do you have to babysit and make sure it closes and get your fee when the transaction is done? I've heard it done both ways. Your Thoughts?

I plan on starting with FSBO's or working with agents on MLS and will be avoided all REO's and Short Sales as I know the processes are much more involved and time consuming to wholesale - LLC's, Land Trust, EM Deposit, proof of funds, etc.

I would really appreciate some responses from the Texas Wholesalers on their process and other investors as well. Thanks.

[Chris T.]

Hopefully, you already have an investor friendly title agent who is willing to put time and energy into getting you clear title.

That's the first thing!

Secondly, have your title agent do a title search for you before you put it under contract. If they sound optimistic about getting clear title then you can put it under contract.

Just put zero for earnest money amount on your TREC contract.

Put however much you demand for a deposit on your assignment contract. ie..A non-refundable earnest money deposit of $1,000 to be credited towards sale price at closing. I would recommend at least $1,000.

Also, put how much your assignment fee is. ie..The contract is being assigned for the sum of $ 10,000 to be paid at closing.

Finally, specify total purchase price including contract plus assignment fee. ie... Total Sales Price including Contract & Assignment is $ 90,000 plus closing cost.

You could just have your TREC contract notarized and filed to eliminate investors going behind your back. You could also do nothing and if you run into a problem you could "cloud the title."

You will learn to enjoy double closes because if you have to double close then you are probably going to be making quite a bit more money then you would as an assignment.

As a newbie, I would wait to demand my assignment fee until you have clear title. I would really hate to collect, spend, and then scour for the money I collected from a respected investor because I didn't have clear title. What that usually means is, you won't get paid until closing.

I'm pretty new at wholesaling myself but you learn a lot when you are actually doing it. Also, networking with some experienced wholesalers in your area is priceless because they can pass along their experiences and advice to you. Join you local REI Club!

Probably, the best thing you can do to answer your questions is get a sweet deal under contract and call one of the wholesalers or investors that you've met. When a good deal comes their way they will do whatever it takes to get it so they probably won't mind helping you assign it to them.

I know how it feels when you, think, you have enough knowledge to get started. And, once you do get started the learning kicks into high gear and you'll start to have something concrete to work with which feels much better then whimsical fascination. After you get your first deal it seems as if the education of wholesaling is pursuing you rather than you pursuing the education!

Good luck and let me know if I can be of any help!