All Forum Posts by: Armand Farr

Hey guys, I've sent out my first mailer and I'm having trouble deciding on what type of contract to use for my wholesale. Here's my issue:

Assignment contract: I live in the Bay Area, price transparency is super high and owners will be pissed if they find out I'm just marking up their properties.

Double close: not crazy about the idea of paying closing costs twice

LLC transfer: Possible - haven't explored this a ton. But CA has an $800 Annual LLC franchise tax.

I thought about working with a cash buyer on a 1099 contract basis. Or possibly using a letter of intent, stating that if this property closes, then the cash buyer compensates me with X.

Any suggestions here? Just trying to keep things legal and I'm not sure which of these are in the gray area/how to keep things smooth with the seller.

@Andrew Brannick you're the best. Super insightful stuff - this makes things much clearer and I can't wait to do my first wholesale.

Amazed by the amount of info you can get from posting on BP - thanks again for the help!

Hey guys,

I'm gearing up for my first deal and had a question regarding when you actually make offers/do the final analysis on a property when touring:

I know you set up a time to walk the property with your motivated sellers and that you should go into the property already having done an analysis. 

However, once you physically tour the property, do you estimate repairs and make offers on the spot in-person? It'd be hard for me to feel confident in an offer as a newbie without going back to the spreadsheets, but I would imagine that it's important to negotiate in-person.

Any tips on how to be as prepared as possible to make an offer would be great!

@Andrew Brannick this is super helpful, thank you so much!!! If you have time, I just had 2 other questions:

1. Does the buyer have the same inspection contingency as I do with the original seller? My understanding is if I get the property under contract and find anything "unexpected" in my inspection, even if it's minor, I can back out and not lose my EMD.

However, if a buyer orders his inspection and finds something he doesn't like, can he back out as well because his EMD isn't due yet? Could he back out for something as minor as a broken door or something as major as termites/plumbing?

2. After doing your first walk through of the home with the motivated seller, do you make a verbal offer in-person, on the spot? Or do you go back and run the numbers after you've estimated repair costs?

My concern is while I might have a ballpark idea of the property value, I don't know if I'm comfortable immediately estimating repairs and doing a 70% ARV-repairs analysis in my head to come up with an offer.

Can't thank you enough for your help here.

Hey Ahmad,

I've been getting ready to do my first wholesale as well - here's what I have for question 4:

Q4 - If it's really a deal, you shouldn't have any trouble finding a buyer. Here are some channels I mapped out:

Meeting cash buyers and compiling a buyers list:

- Share the deal at your local REIA/BP meet up
- Connect with the active investors in the Redford area on BP

"I need to sell this thing right now" Methods:

- Craigslist (be careful how you advertise it, make sure you're not acting as an agent)
- BP Marketplace
- It looks like you have a few people in the area by making this post in the first place :)

Some Contract Provisions:

- Always include an inspection contingency, which allows you to back out incase you find anything "unusual"

Plenty of people here know way more than me about this, but hope this helps!

Hey guys,

I'm gearing up for my first wholesale and I've been trying to understand the home inspection/closing process. A few questions:

1. Would the buyer order the home inspection to ensure that there are no major structural defects in the property (ie: plumbing)?

2. Further - if the buyer backs out after I've initiated the double-close, how would this affect me? Would I get the contract back or would the entire deal not go through?

3. When doing an assignment or double-close, do I take the deal to the title and escrow company or is that the buyer's job?

Thanks BP!

Great, thank you! I hear people shotgunning multiple offers per day though - there's no way they could be going to them all right?

I'd definitely pull comps and run the numbers first. 

Also related question: When an offer gets accepted, would you always suggest bringing in a professional inspector to look for high ticket items like plumbing, electricity, gas, etc?

Hey guys,

I've been trying to build a process flow for all the steps for my first real estate deal. I've heard of most people sending in formal offers (with an inspection contingency) on MLS properties before touring them.

However, is this the same for off-market properties? In other words, do you get the seller under contract before visiting the property, or do you just give some sort of verbal offer to gauge their motivation level then set up an appointment?

For context, I live in Silicon Valley, so any reasonably priced properties will probably be at least 90 minutes away. So it's not feasible for me to visit every property that I offer on.

@Manolo D. things were never tremendously profitable unfortunately and we've begun to sell off company assets.

I appreciate the feedback - I'd just have to get some income first before I started flipping because no-money financing is hard to pull off without the experience. That's why I was thinking of going the agent route (plus, it's just really fascinating to me) or possibly corporate.

I appreciate the quick help everyone!

@Ayodeji Kuponiyi my only concern with double dipping is that it'd be tough to build a real practice while working a full-time corporate job. If I was going to become an agent, wouldn't it only be worthwhile if I fully dedicated myself to building a clientele?