Wholesaling logistics

[Katrina P.]

Hey guys:

I have been primarily a buy-and-hold RE investor, but did one flip last year (which wound up being an epic FAIL, btw). Anyways, I just wanted to ask a quick question about wholesaling. If I find a deal on the MLS, and get it under contract, say for a 30-day close, how do I wholesale that deal? I guess what I'm asking is logistically, how do I make that happen (since the bank will be expecting me to close on the purchase)? Sorry this is such a "newly" question, but I've never wholesaled before. Thanks, in advance, for any input!!

Katrina

[Dave Stinnett]

@Katrina P.
Hey Katrina, Im new myself, but one way i'm aware of is, you could create a LLC in the name of the property (ex. 123 Any St.LLC) and sell your intrest in that LLC for your wholesale fee. Hope that helps!

[Ned Carey]

Most MLS contracts say they cannot be assigned. You could get an addendum saying that is can be assigned but I wouldn't hold my breath.

The two basic ways are buy in an LLC and then assign the LLC at the closing table. Alternatively you can double close. Both of these can have pitfalls. Many Bank REO deals come with a restriction on reselling the property within 90 days. Many new investors may not understand buying an LLC vs buying the property and may shy away from the deal.

Personally I find it much more practical to do assignments that are not listed. Do deals directly with motivated sellers and most of the problems go away.

[Katrina P.]

@Dave - thanks for your willingness to provide input, even though you're "new" like me. I appreciate it. :)

@Ned - thanks Ned! I thought that was a more practical approach, but I guess I've just questioned my ability to find motivated sellers on my own. What's been your approach that's brought you most success in this area?

[Ned Carey]

Katrina,

There are a ton of ways to find deals. Search the archives here on BP, you will find plenty of info.

What's the best way? Well William Tingle says "Everything works somewhere, nothing works everywhere." One of my favorites is tracking down the owners of vacant houses. You can also try; absentee owners, rent court, ads in the paper, burnt out landlords, We Buy Houses signs, estates, out of state owners, etc etc.

[Katrina P.]

Awesome...thanks a lot! I think I'll try my hand at newspaper ads and "we buy houses" signs.