All Forum Posts by: Jon Frame

Oh there's quite a few here....I just think most are perusing the main forum. But we could change that.....

Hey Andre,

I'm going to assume that you are working with a wholesaler that has a property under contract and you will find the buyer. This is an awesome way to start with zero risk on your part.

First make sure you have a reputable wholesaler that you are dealing with...remember if you have the buyer, it' your reputation at hand.

There's 2 ways to do this and I have done both.....You and the wholesaler can agree on a cut for you bringing the buyer in or, as long as there's enough meat on the bone, you can bump up the price of the wholesale deal and you keep the difference. 

Also, like Arktavious is saying.....stay in the deal and see it through.... but you don't want to complicate things because your now in it as well......as long as you have the agreement with the other wholesaler, they can cut you your share after the deal is settled. Personally, I wouldn't get all these checks cut at the closing table in front of your buyer, that's between you and the wholesaler.

Even though the other wholesaler isn't your business partner, as far as the buyer is concerned, the other wholesaler is your "partner" in the deal. 

TONS of stuff right here about it......you'll find it. Download the BP free ebook "Ultimate beginners guide to REI"

Hey Andre,

If you really want to set yourself apart from the majority of wholesalers, get yourself a team together and offer the whole package. I've done over 100 wholesale deals and all but a few of them I have done this way. Find a good referred contractor and buy him lunch and have him give you a REAL estimate for the cost of rehab of your property. Assure him that you will not waste his time and get your buyers to use him. Offer your buyers to check in on the rehab, take and send pics of the progress. Get a good Realtor on your team, a newly licensed one perhaps. There ARE deals on the MLS, most of mine came from there. You can still make a low offer, especially if it has been on the market a while. Find a local Hard Money Lender that you can refer.

Now you have 3 professionals involved in the transaction to back up what you tell your buyer. Especially the HML, they won't give you money if the deal is not solid. You, your buyer, and everyone on your team will make money and look to you for more deals......that's a HUGE motivating factor !!!!!

BTW....I live in Nazareth, PA....Home of Mario Andretti and I used to live in Easton, which is a just a few miles from Nazareth, about 2 blocks from Larry Holmes.....met him several times at his bar "Ringside"....very nice and very approachable, would always joke with you. He actually sings in a local cover band, horribly, but they're fun. 

I used www.realestateexpress.com and passed the first time.....They make their tests harder than the real test you take  and you are guaranteed to pass using their system......

David .....Why wouldn't you???? What's the difference if you purchased the contract through the wholesaler or gave an EMD to the seller? You plan on buying the property either way......the non-refundable deposit he is talking about goes towards the wholesale fee.

I am assuming you mean after the buyer agrees to buy your contract. Remember, when you are wholesaling you are selling the contract, NOT the property. I have always collected the assignment fee up front after, of course, my buyer has done his thorough diligence on the property and wants the deal. If I put $1000 deposit, the buyer would have to give me the $1000 deposit , which comes off the price of the property, PLUS my wholesale fee whatever that may be, then the contract would be assigned to them. 

If you are collecting your wholesale fee at the close then, yes, I would ask for the EMD that you put down plus a deposit on the wholesale fee. Put it this way, when your buyer says he wants the property you will take it off the market.....why should you get nothing if the buyer decides to fly at the last minute for whatever reason? You could have potentially sold the contract to someone else and the seller may not want you to market it again.

Hey Jerald,

Since these are not through a Realtor your best bet would have been doing an "option contract" especially since you didn't have any buyers lined up.  If your not familiar, look it up here on BP. It basically gives you the "option" to purchase the property at your negotiated price in a specific time period, ex.60 days, it also gives you interest in the property to allow you to legally market it to your buyers.

After you check out the properties and negotiate a price you just tell the seller you are in a large group of investor's ( BP) that may be very interested in your properties but you need to have a contract (option) to market it to them. When you find the buyer you go to seller and write up a standard real estate contract then assign it to your end buyer.

Oh and the typical deposit on an option contract is like 10 or 20 bucks.

Most HML's will only loan up to 70% LTV, some only 65% and that's off the ARV. That said, they usually want you to have some "skin in the game" as well unless it's an amazing deal. Say you could be all in on a house for 50-60% of the ARV they may fund you 100% of the deal, but numbers would have to be pretty solid.

As far as the 5k profit.....that's not enough spread for the HML to lend on. You should find a good HML lender and see if you can walk through some of there current projects and see the numbers for yourself. They will tell you exactly what will work and if you find a deal that they will lend on, you know it's a good deal.

Most of my wholesale deals were through a Realtor in PA. .....You would sign a standard contract with your name and "and/or assigns" after your signature. This will legally allow you to assign that contract to your buyer. Your wholesale contract would then be signed by you and your buyer and attached to the original Real Estate contract.

Hopefully you have a good Realtor that can explain the "and/or assigns" to the seller's agent when you make the offer, you may get some negative reactions. And, of course, when you sell the contract it will just boost the confidence of your Realtor and make it that much easier the next time......