Help with Wholesaling Questions to get First Deal

[Jordan Petty]

Hey fellow BP Members,

I have a long-term goal of investing in rental properties, however in the short-term to build cash quicker I want to dive into wholesaling. I've been reading and listening to Wholesaling Inc., other wholesalers, and I believe in myself to pull it off. I have joined the Houston REIA and the recently formed BP Houston Group - H.I.T (thanks to @Matthew Gullo) where I already met many great people that are like-minded, and willing to work with one another to see each other grow in their investing journey. With all that being said, there are still questions I have regarding wholesaling that I can't seem to get answered. I always hear to just go for it, but I also want to make sure I am not getting myself into trouble. So here are the questions I still have unanswered that I need help with:

1. How do you get a Repairs estimate if you have no idea how to calculate? I want to be fair and forthcoming with the numbers with all parties involved and not give wholesaling a bad rep. 

2. How can you have a "sell price" for the seller when they first call you without knowing the specifics? I hear and read how people just give them a number on their first conversation with the seller and am confused on how that happens without "knowing your numbers"?

3. What type of purchase and sell agreement should I use? I hear TREC forms are the best to use, but am not sure which one to use, and don't want to use if I don't understand the language.

4. If I tell a seller I will get the deal done in 30 days, but then end up for whatever reason going over that period, what happens then? Am I binded by the contract to buy the house myself?

5. I read that the law changed recently in Texas to where you must disclose that you are wholesaling and will make a profit off the deal. How can you go about disclosing this with a seller? Just be completely honest with them upfront? 

Example: "Hey Mr. Seller, I want to make this an easy and quick transition for you and since I am legally obligated to tell you, it's likely for this transaction I will not be "purchasing" the house myself, but will be assigning the contract to a buyer for a fee by using the clause "And/Or" in the purchase agreement. In the end, I will get this house off your hands and everyone wins. How do you feel about this Mr. Seller?"

6. Does the seller end up meeting the actual end buyer at closing since they have to receive there check from the end buyer? I don't know how this doesn't seem awkward without disclosing the above beforehand.

@Charisma Dixon - wanted to add you on this as well to learn along!

[Tristan S.]

Hey @Jordan Petty,

1-That's a tough one, it will likely come with experience. To learn, you could go shadow another wholesaler to try and learn. You could also make friends with contractors.

2-Don't make an offer on the phone, try to get an appointment to see the house and meet the seller. You need to meet the seller to build rapport. 

3-Trec is fine, some people use a two pager contract as it looks less threatening than the long Trec contract. Some people have both and offer the option to the seller.

4-Your reputation is on the line, if you say you will close by a certain date and you do not, well you're giving a bad rep to all investors and that's why wholesalers have such a bad reputation in general.

5-You cannot say that you are buying their house, you are just putting it under contract and assigning the contract to another investor for a fee.

6-You can arrange the closing so that the seller and the buyer come at different times, your title company will help arrange that. Another way is to do a double close which are less common I believe.

Hope this helps!

 I would like to know more about the BP houston group HIT, do you guys meet every so often? I would be interested.