All Forum Posts by: Kenneth Germann

i don't see the reason why I need to have 25 LLCs. I am working with my lawyers on this issue.

The type of contracts you do are going to vary state to state. Here are the contract types in wholesaling:

Assignment Contract: In an assignment contract you have a seller contract that is between you and the seller. This is an AB contract. You have an assignment contract that is B to C. B is you the buyer who is selling the property to the buyer. There is only one closing fee.

You have two contracts. A seller contract with the the seller. You are the buyer. 

You have an assignment contract where you become the seller. You are assigning the right to sell the property to the buyer. 

The buyer pays the closing costs typically, your assignment fee, the price of the house which is the ARV*75% typically. The buyer pays. The money goes into an escrow account with the title company. The title company pays the seller, pays you your assignment fee. The buyer gets the title to the property.

Simo Closing: You have two seller contracts. A to B on one contract. B to C on the other seller contract. Title transfers in minutes. There is one closing fee.

In a SIMO closing. You have two seller contracts. an A to B seller contract from the seller to you as the buyer of the property. You have a B to C seller contract. You are are the seller and the buyer is "C" in this case who is buying the property. There is only one closing. The buyer pays the title company the total cost of the property (ARV*75% (this can fluctuate from 70 to 80% depending on market conditions). The money goes into an escrow account. The title company pays the seller, pays you your wholesalers fee, and gets paid the title fees from the buyer typically. The buyer gets the title.

Double Closings: You have two seller contracts. A to B on one contract. B to C on the other seller contract. There are two closings. There is a sellers contract (FBARAR). The first contract is between you and the seller (A to B). You get the title for 5  

In a double closing there is two sellers contracts (no assignment contract). 

You want to pick the contract types you use based on the laws of the states you are doing business in. Easiest way to figure out what the laws are is to talk to a title company that is a law firm in that state.

Its important that you understand the laws in each state when it comes to closings...

Quote from @Kenneth Germann:

What kind of guidance are you looking for? do you have a budget in mind for this mentor? You can make more money doing wholesale real estate than as a realtor... I can buy and sell properties in 144 counties in 30 states in the United States without a realtor license as a wholesaler :)

Hi Kenneth, 

Since we’re just getting started we need a mentor to guide us in making smart purchases. Learning about short term and mid term rentals. We haven’t talked much about wholesaling for now but that could be something in the future. 

Thank you! 

Quote from @Kenneth Germann:

I have a wyoming LLC. I will be buying and selling properties in 25 states. I don't see a need to incorporate in more than one state. This is a better question for a lawyer or accountant :)I use cloud peak law in Sheridan for all my LLC work.

The lawyer will tell you, you need to have an LLC in the state you're operating in or register the WY as a foreign one. So if you're operating in 25 states, you'll need 25 LLCs and the parent LLC can be the WY one.