All Forum Posts by: Daniel Cohen

Thanks.  Is it customary for the wholesaler to provide the purchase contract only after the assignment contract is signed and the deposit paid?

I'm a newbie at real estate investing - want to do fix & flips.  I've just found out about a property for sale by a wholesaler here in NJ and want to know if the proposed offer process is typical.  I've seen posts & blogs on BP about how to wholesale and what makes a good wholesaler but little about the process from the buyer's point of view. Here's what the wholesaler is laying out:

• No seller or wholesaler disclosure on the property … it's an as-is sale
• One open house will be held at which the property can be viewed
• Buyers have 24 hours after the end of the open house to make an offer comprising simply the offer amount along with proof of funds
• Wholesaler selects the winning bid that night and send the buyer an assignment contract.
• Buyer wires a deposit (over $10k, and not called earnest money but called a deposit) to wholesaler's attorney the next morning
• Wholesaler sends the contract between seller & wholesaler to the buyer and/or buyer's attorney
• 1 calendar day for attorney's review (in NJ real estate contracts are not binding until both party's attorneys agree on the contract)
• Deposit is only refundable if title is not clear
• Approx 3 weeks to close
• There's no underground oil tank contingency (in NJ it's common to have the seller remove an underground storage tank).

Are these steps & conditions & timing typical for a wholesale deal in NJ?

Thanks

I recently called a half-dozen banks regarding getting a loan for flips and for buy/hold one- to four-family homes in Union/Essex county NJ, to be owned inside an LLC. Loan amounts $500K+ but under $1M. Lakeland Bank's commercial loan department said they'd do it. Investor's Bank residential dept said they might begin a lending product for LLCs for such loans in early Q2 of this year. Try those two banks. Also try calling other very small banks in your county.

I was in the same situation. Once I had the property owner's name I searched for his name and his wife's name on Google. It returned a link to a listing on whitepages.com. The listing showed that the owner previously lived in the town where the property I was interested in was located.

There are two purposes to organizing information about expenses.  One is to understand exactly how money was spent on the project, so that in the future you can do a better job of budgeting and managing the work. @Gregory H. describes an effective system for tracking all the required details.  The second purpose is to provide information for financial reporting.  That may require less detail.  Think about whether you want to address both purposes, or just the financial reporting.  Ask your accountant how he wants the information reported to him. Then set up your spreadsheet or Quicken to provide the information you both need.