How I earn the money ?

Question

Hi, I have a question about wholesaling. I want to know how I earn the money with this strategy ? Imagine I find a property, how I can keep it for a buyer and how I can earn money ?

Jerry Puckett · Answer

Dude, I dont want to discourage you, but what you're asking would be similar to showing up at a car dealership reaady to buy a car.....and asking how to drive.

Everyone has to start some where, and if you don't understand even the basics of this strategy, then you have a lot of reading to do. Go to the top of the page, type in wholesale and start reading the results. There are thousands of threads and blog articles on this site to educate you.

John E. · Answer

As @Jon Holdman stated there are a lot of different ways and complexities when performing this type of transaction.

Assignment basically means to sell your rights to a contract. When signing your contract you want to put something that says'Name'and/or Assigns which indicates the property will be bought by you or a party that has been assigned the rights to the contract. This can be done with  one close.

A double close is a transaction where you close with the person you are buying from. This can be visualized as the "A" to "B" (seller is A & you're B). In one room you will close & go into another closing with your buyer after that. This is often referred to as the "B" to "C" (you're B and the final buyer is C).

I'm still just a teen, but those are the basics as I understand them. Laws are also very different in many areas. There's a popular thread I read about new laws that could have drastic implications for wholesalers marketing properties they don't own w/o a license.

@Jerry Puckett is definitely not discouraging you at all. I loved his podcast and other work on the site. You do need to spend some more time learning. I'm still in the learning process as well, so you're not alone buddy. :)

Best of luck to you!

Jon Holdman · Answer

First, you would sign some contract with the seller.  Usually, this is a purchase agreement, but it might also be an option (to purchase.)  You now "control" the property.  That is, the seller is obligated to sell you the property under the terms of the contract.  Then you find the buyer.  The simplest form of transaction is an "assignment".  You have a contract with your buyer where you "assign" your original contract to them in exchange for a fee.  You collect the fee, they step into your shoes and become the buyer on the original contract.

In a more complex transaction, you "double close".  Instead of the assignment agreement, you have a second purchase contract with the end buyer.  Its at a higher price than the first contract.  You then execute the first contract and buy the property from the original seller.  Then you turn around and sell it to your end buyer with the second contract.  Since the second price is higher, you have some money left over after paying off the original seller.

There are lots of variations and some other ways to do this.  Its more complicated than I'm making it sound, and requires a LOT of work to find buyers and sellers and get them together.

Anson Young · Answer

Exactly what Sir Jon said.

There are a few ways to skin that cat, but the basic premise is you sell it to your buyer for a higher price, and get paid the difference.  Assignment, sell an LLC, double close, there are many ways to complete a wholesale transaction.

Aaron Mazzrillo · Answer

You can't have your pudding if you don't eat your meat. You go @Jerry Puckett!

Ronald Perich · Answer

I love how you can go through BP, find posts like this, and learn something almost instantly! I may be new to this whole thing, but I have learned a tremendous amount in just a few short days.

Rifat G. · Answer

Thanks Jon for take your time for explain me

Rifat G. · Answer

Thx for answer but how I can sell a property who is not mine ?

Jon Holdman · Answer

You make money because you find a property a seller will sell at one price, then find a buyer who's willing to pay a higher price.  You make money from this difference.

Do some reading here in the Wholesaling forum and you'll find lots of discussion about 1) finding buyers, 2) finding sellers, and 3) how to actually do the transaction.

How I earn the money ?

Most Popular Reply