All Forum Posts by: Abel Casillas

You basically cold call a bunch of distressed properties or go door to door or put up “we buy houses” signs all over town. If someone is willing to sell their house for a less than market value you get them to sign a contract with you. You then sell the contract (not the house) for a mark up. The seller gets quick cash, the buyer gets an undervalued house with no competition, the whole seller gets a finders fee.
It’s basically doing the research for people interested in flips or brrrrr

Makes a little more sense. Could we dive a little deeper in the explanation and could you explain with numbers. Ex: lets say market value for a house should be $150,000 but they’re willing to sell the house for $100,000. Now what happens?

Devin’s response was perfect. See simple numbers there

1 Vote

Quote from @Breland Almadova:

Quote from @Devin James:

Breland Almadova, here's my take (I've never wholesaled, but have been actively investing for a couple years)

Wholesaler: "I will like to buy your home for $100,000. I have cash and can close in 45 days with a 10 day inspection period"

Seller: "Yes, that will work. Lets fill out this contract that with the terms" (Wholesaler makes sure to mark that the contract IS Assignable)

Conversation Ends

Wholesaler: "Hello Investor, I am a wholesaler & I have a great deal for you. You will need to close by this date, and you have this many days for inspection. Here are the numbers:

Purchase Price: $110,000

Rehab Budget: $5,000

ARV (After Rehab Value): $150,000

Investor: "This looks amazing, I will like to purchase this property for $110,000"

Wholesaler: "Great, here is the assignment addendum which says that I am assigning you this contract (Original contract) for $110,000"

The wholesaler will then send the closing company the addendum, and the closing company will take care of the rest. At closing, the seller will receive $100,000. The wholesaler will receive $10,000. And the Investor will pay $110,000. Exact numbers for simplicity. Depending on the terms of the contract, there will be closing costs on both sides, but usually the wholesaler will take the difference between the contract price with the seller & the wholesale price with the investor.

Also, different states have different laws regarding wholesaling. You may or may not be required to let the seller know that you are a wholesaler, talk to experts in your area.

Im not trying to be rude, just trying to explain as simple as possible lol!

That’s a pretty perfect and clear explanation. No rudeness on your part. I get it now. So basically as a wholesaler, you have to have cash on hand correct? Ways of getting that cash can be private lender or yourself or any other ways?

You don’t need cash on hand. You aren’t buying the house, you’re just promising to buy the house. There should be an exit clause in the contract so if you don’t find a buyer you can have an out (sorry I can’t move forward, because as per the contract states the estimate came in higher than expected). You have to put an agreed amount of money into the contract with a title company I believe. This keeps the buyer and the seller from backing out, if they do they lose their deposit.

Again I am also knew and this is the understanding I have of wholesaling. It’s a way to make a large amount of money at once but with a lot of hours of unpaid work(finding the deals). Your only risk is your deposit in the contract and your reputation (if you are flaky, buyers may avoid you)

1 Vote

I’m new to real estate so I can explain this in newb terms since I am one.

1 Vote

Quote from @Nathan Gesner:

Seller financing, partner with a friend or family member, meet someone at a networking event to partner with, use a hard money loan, sell your kidneys, rob a bank, etc.

I'm not a fan of 100% funding. If you don't have the financial discipline to hustle, save, and invest from a position of strength, then you should partner with someone who does. Very few people build true wealth through shortcuts touted by the gurus of "no money down" investing.

I agree with you "Very few people build true wealth through shortcuts touted by the gurus of "no money down" investing" I just think if I wait a couple of years to save, I would be missing out on the current market. By getting a few projects under my belt I can be able to get a lower DP and interest rate with my hard money lender.

Could be a nice tax write off for the time being until I pay off the principle enough to cash flow.

0 Votes

Quote from @Kenny Smith:

@Abel Casillas

You could look at creative financing such as doing seller financing for the downpayment amount. Have you looked into this?

Best of luck!

That is genius, thank you! I will see if the seller is open to a short to mid term loan schedule until ARV refinance and then I can buy them out.

0 Votes

Hello bigger pockets community.

Here's a bit of background. I am 25 years old father from southern CA (father= reference free time ; southern CA = not probable to invest locally). I have never bought a house and I'm in a position to finally start saving money. I have a property I want to BRRRR in Texas. I have a hard money lender on board. I need to put up 20% and pay for the closing costs and fees so total about $30k out of pocket. I do not have $30K I could save up and try in to begin in a year or 2. I would rather buy now than since the competition seems to have slowed down.

Does anyone have a creative solution as to how I can come up with the money. I am interested in having a long term investment, I may be breaking even or have a slight loss depending on the rent but I consider having an asset paid off a win. I hope im not being naive and making a decision that can ruin me.

0 Votes

All Forum Posts by: Abel Casillas

Abel Casillas has started 1 posts and replied 6 times.

Post: Explanation of Wholesaling

Post: Explanation of Wholesaling

Post: Explanation of Wholesaling

Post: First time investor in need of funding advice

Post: First time investor in need of funding advice

Post: First time investor in need of funding advice