All Forum Posts by: Sergio Aguinaga

@Jay Hinrichs there's nothing wrong with the principles. A wholesaler never forces someone to accept their offer especially one on the MLS. They have a service and that's to find a cash buyer and find them fast, something a lot of sellers need because their house may go to auction in less than 2 weeks or house is vacant and it's destroyed and they just want out. Wholesalers offer time and convenience but not price. I've never heard of a wholesaler getting sued because he assigned his contract and in fact it's always the other way around. The wholesaler typically sues the seller if they find and sell the property to someone else even though they were already under contract.

@Storm S. I promise you wholesaling is not illegal in most states including mine. If it was illegal then title companies wouldn’t close on these transactions to avoid a lawsuit. If wholesaling was fraud then wholesalers wouldn’t exist and needing a license to do wholesaling is the biggest misconception. Worst case scenario if assigning your contract becomes illegal some time in the future, wholesalers will just double close or close on the property then sell it a day later. But we don’t have to go through any of that yet because wholesaling is legal.

@Jonathan Hasan watch Jerry Norton on YouTube.

You need to not disclose you’re a wholesaler otherwise they probably won’t present your offer and you want to make it a win-win by making your agent represent you. If seller accepts then there’s motivation for him that he just wants to sell. Your offer will just be presented and ultimately it’s up to the seller if he accepts.

Wholesaling is legal in most states. You can market home if you have a signed purchase agreement. It’s called having equitable interest.

@Tim Herman hmmm I’d have to double check on that but all the investors I know only do land contracts for seller financing.

@Peter Walther Attorneys are so expensive and sometimes I feel like they don’t know that much even when they invest. I had one review my contracts and he didn’t know much about lease options, I had to explain it to him lol.

@Tim Herman ok so since there is only one contract, do I make purchase price 40k (owed from mortgage) for sub2 acquisition or 60k (equity) for land contract acquisition. I wish I could do a note but here in Michigan we don’t do them, we can’t do seller finance and wrap around mortgage. It has to be land contracts only hence we do land contract and wrap around land contract.

@Tim Herman when I take the property subject to, I’d get title. But I would still have a 60k land contract in 2nd position and in land contracts title doesn’t transfer that’s why I’m confused if title would transfer. So when I purchase sub2 then do 60k land contract, am I using 2 purchase agreements, 1 for sub 2 and the other land contract or how would I do the paper work?

@Tim Herman so I need 2 land contracts then. 1 dollar for dollar with the mortgage and another with terms me and seller agree on with his equity. What if I just have 1 land contract and set purchase price to his equity amount. Does it matter that he’s still paying the mortgage even though I have a land contract for 60k.

Hello all. I have a couple quick questions: I’m in Michigan and we only do land contracts for wraps or seller finance.

Scenario: If a seller owes 40k on a mortgage and the ARV is 100k while he's 16 years into the loan and has a 250/month loan pay down since his PI payments are 420/month, to wrap around land contract, if I set purchase price to 100k (which is full market value) and 0% interest with payments of 450/month, here's my questions:

1. Am I literally building 700/month in equity? 450 for the monthly payment to seller and 250 for the mortgage loan pay down.

2. The sellers mortgage has nothing to do with the terms I wrap with him even though the amount he still owes is part of the purchase price I give him. So I’m getting loan pay down with mortgage and loan pay down with him all in 1 land contract equal with purchase price of 100k (60k equity + 40k remaining mortgage). The wrap still has the seller in charge of making the monthly payments cause it’s still in his name but I expect he pays for it.

3. Even though mortgage stays with sellers name, I’m the one benefiting from that loan pay down and not him, right?

4. There should only be 1 land contract that wraps around his existing mortgage and equity with new terms me and seller make in this case 100k, 0% interest 450 monthly payments. I shouldn’t have 2 land contracts (1 dollar for dollar with the existing mortgage and another land contract with the sellers equity).

5. Even if I gave him 3% interest and it comes out to 450 monthly payments, since his interest is 4.25% and I’m offering 3%, after 5 years let’s assume he now owes 30k but my pay down to him let’s say is 15k, after those 5 years I will owe him 75k now, right?

With these answers I can confirm my understanding is correct. Thank you!

@David M. Yes, I have the lease extension addendum already. I just need to make sure I can use it. It sounds like I can since the lease is still active as a month to month and since it’s still active, I can still extend its new termination date. If that’s the case, then that answers my question.