All Forum Posts by: Jesse LeBlanc

Otherwise, I might be able to refer them to a friend or two who does short term loans for 3 months or less to be able to control the deal then wait for their refinance if more time was needed.  But it's best to stick with trying to make them happen on the same day to save a LOT of money vs the short term loan paying 2-3 points plus interest when if a double close with refinance it's merely the 1% T. Funding fee and no interest, no other fees.

Good Afternoon @Mahari McTier A loan or all cash means the same to the seller, it all is cash to the seller at the end of the day. They might mean they don't want to deal with a lender and delays and wants a legit cash buyer possibly.

IF there is enough equity in the deal, sometimes it's good to have a refinance lender ready to go.  Then you can use a us as a Transactional Lender to fund the first purchase and same day the 2nd transaction which is the refinance.  We do this a lot for clients.  It's a double closing, just have to make sure their lender is ready to go and be transparent with all parties as the seller won't care because they're getting the price they want, the buyer will be able to bring less or no money out of pocket for the refinance (if there is enough equity) and then everyone wins. :)

Quote from @Peyton LaBarbera:

@Jesse LeBlanc Do you the wholesaler need POF in an assignment contract wholesale deal or is your end cash buyer responsible for providing that. I only ask because I don't want to double close with a hard money loan and I don't have the funds to show

You don’t need a POF. However, sometimes agents or sellers will ask. If so, you can provide a bank statement or a legit POF.

you should go buy the book “if you can’t wholesale after this I’ve got nothing for you” by my good friend Todd Fleming. It will take you step by step the legit and ethical way to wholesale the right way.

Quote from @Peyton LaBarbera:

And just to clarify when I disclose the EMD with the buyer is that in the P and S contract or assignment contract?

And do I have 2 P and S contracts one for the seller when I get the deal and one for the buyer when I close or just one p and s contract and the assignment contract transfers that p and s contract to the new buyer?

Thank you to all for being so helpful, from now on I will come here for all my questions about wholesaling sometimes google just doesn't do the trick

 ONLY if you're double closing will you need 2 separate "purchase & sale" contracts.  When you're assigning your contract, you will have just that, 1 original purchase contract and 1 assignment of contract.  so 2 contracts but 2 different documents.  The first is with you and the seller agreeing to buy their house.  The 2nd is with your buyer, assigning your original contract to them for a specific fee, they then step in as the buyer.

Quote from @Peyton LaBarbera:

@Jesse LeBlanc Ok I see that makes sense, one last question is do I pay taxes on my EMD if it comes back in one check from the closing company or is there a way to break it down on paper when filing for taxes since it is not income?

No, it was not considered Ordinary Income. This is merely a wash. $1 out and $1 back in, $0 net profit, no ordinary income to report, no taxes paid. IF it were EMD you kept from a buyer that didn't perform, that would be income and taxable.

Quote from @Peyton LaBarbera:

Quote from @Eliott Elias:

You pay the earnest money deposit initially. And you also require an earnest money deposit from your cash buyer. Your deposit gets refunded to you. The cash buyers deposit is applied towards the purchase price. And is nonrefundable.

So for the term "have my EMD refunded to me once the deal closes" do I put that into the P&S agreement or assignment contract?

Anyone who has some insight can respond too, thank you.

You can simply email the closing company since your buyers EMD is there and get it anytime. You can also wait until it closes, then the closing team can add your original EMD to the assignment fee all in one check/wire.

If you are double closing, then your EMD will be independent of your buyers and must remain with the closing team until closing.

@Peyton LaBarbera EITHER actually. If you already have a buyer lined up vs marketing the deal to go find a buyer after you sign a contract with the seller, then you can have your end buyer send the EMD.

If you don't have a buyer lined up right away and let's say your contract says EMD within 3 days, then legally YOU should be submitting EMD within those 3 days to secure that contract or else it could be null & void if you don't.

I used to simply have $100 as EMD on my contract, only rare cases was my EMD higher.  For my buyers it was a min of 2k but usually up to 5K non refundable to make sure my buyers were serious in the event I was working with someone new to me.  Yes 100% you should make sure that your buyer is serious and submits EMD, I would suggest it being non-refundable but also in your assignment make sure that the EMD goes to you (minus what you owe to the seller) if the buyer backed out last minute and screwed you and the seller over, making sure you can then pay your seller the EMD as promised on the contract if they didn't allow you to continue trying to find a replacement buyer.  This is where transparency with the seller is important.

If you submit EMD then later your buyer submits EMD, you can simply request your EMD back from the closing team or you can have the closing team add that to your assignment fee and allow the extra EMD to be applied to your buyers.  It's all a wash at the end either way.  

@Riley Huseby also go buy the book "If you can't wholesale after this, i've got nothing for you" on amazon by my good friend Todd Fleming.  This will show you the RIGHT way to wholesale, legal and ethical way, minimal stress just as I mentioned above vs merely locking up deals overpriced, pissing off sellers, backing out of contract, being greedy and not caring about sellers etc like so many others out there who give wholesalers a bad name.

@Riley Huseby One thing I would do is start within your target marketing area that you want to work in. Whether that be local or virtual. Then when you have an area that you plan to work, you can use propstream or other sources to find other houses that were sold as a cash sale or you can find other deals from other wholesalers or the MLS that were sold to an investor. Then you can use propstream or other sources to find who that buyer is.

once you found that buyer, you know you have a legit buyer. reach out to them to find out if they're still buying in that area and what their criteria is for a house.  Ask them the details on their last 3 deals, that will give you an idea of where and what they like.

Then all you have to do is start finding sellers in that area.  Now work with that buyer (and maybe a handful of others to start).  Begin proposing those deals to those handful of buyers to get their prices on houses you find.  You'll then learn who you like to work with and who you need to let go while finding replacement buyers.

You can drive around and find projects that are under renovations, go talk to the contractors to get the owners info, or uses propstream or another skip tracing service to get their info.  But usually you can just talk with someone on site.  

Good Afternoon @Riley Huseby I would HIGHLY suggest you always be fully transparent and disclose how you operate for good business. By doing so, assigning your contract and not having to pay for a closing or a closing and lending fees (depending on state, closing company and personal choice).

Also, DO NOT GET SUCKED INTO THE GAME of worrying about the ARV, the rehab costs or anything else! Literally if you find a few solid buyers and build that relationship, let them tell you the price they'd pay for the property. Then ALL YOU HAVE TO DO is get the buyer to agree to a lower price, then assign your contract. This will save you so much stress, stop you from having to cancel a contract, stop you from losing emd etc as you start out.

If you do ever choose to double close and ever are in need of a Transactional Lender, I'd love to be the one you go to.  Please look me up in my email signature.  I've got over 70 all 5 Star Google reviews and would love to help out IF you ever choose to double close vs assign and in a state or position where it's needed.  Otherwise, save the money. :)

Best of luck out there, be sure to do what's right for the seller and your buyer, this will make life much easier when closing deals vs always trying to hide and lie like so many other wholesalers who are afraid of being honest or too focused on money vs the relationships.