Posted by JoeB(Atlanta) on April 13, 2000 at 07:44:17:
Hi Jim, sure I would try to pickup a pre-foreclosure subject-to and cure the back pmts, but as I mentioned I was just giving Charity a very basic example of one way to wholesale a deal (ie cash purchase).
Best of success,
Joe Brillante
Questions for experienced Wholesalers… - Posted by Charity
Posted by Charity on April 11, 2000 at 17:31:41:
I just need to be able to wrap my mind around the wholesaling concept. I’m a realtor (trying to escape from realtor world) and I am used to thinking in retail terms. I want to do full time investing and I think wholesaling is how I want to start. I have Ron LeGrand’s course, but I have not had a chance to start it yet. My question is: Can someone walk me through what they would do with this ficticious deal below? I mean from start to finish including how they word the contract and how they make sure they never buy the home themselves. Also, what happens if your buyer backs out and there is no one to buy it but you and you don’t have the funds? Do you normally have earnest money at stake?
Say there is a home where the owner owes $30,000 and is in preforeclosure and agrees to sell it to you for what is owed and the FMV is $45,000. Give me an idea of where you begin and how the whole process goes for you. Thanks in advance!
Re: Questions for experienced Wholesalers…(long) - Posted by JoeB(Atlanta)
Posted by JoeB(Atlanta) on April 11, 2000 at 22:32:29:
Hi Charity, hope everything’s going well w/you and your husband.
Whew, long question – I’ll assume that you know how to analyze the deal financially. If it needs rehab how to estimate that and you’ve determined that $30k is a good price to buy it at for wholesaling the deal.
So, here’s a quick example: you tell the Seller that
"you plan to renovate the house and make it look brand new again, you’ll pay all the closing costs and attorney fees but because of all your fix-up costs, etc the best you can do is about $30,000 cash and you can close within 30 days, you’ve just got to get one of your money partners to approve it after you bring them the signed Agreement (((we don’t say this–because we know we’ll buy it even if a buyer backs out w/some emergency money private lenders we have, but you wanted a weasel clause and this is the best one))). Does that sound like something that would work for you Ms. Seller? "
You help solve their problems/objections & then "if we can we go ahead and take care of the paperwork I’ll give you an earnest money check today for $xxx ((we usually give 1% of purchase price, we feel you should kiss your earnest money goodbye if u can’t do the deal, but the money partner stip can get u out of this)) that you can cash, just to show you that we’re serious about going through w/the purchase. "
Use any of the contracts (we always call them Agreements or paperwork in front of the seller so as not to scare them) that you’ll find on www.legalwiz.com or any of the other gurus and make sure following two stips are in there:
1.If Buyer fails to perform Seller may retain the earnest money as liquidated damages, this is Seller’s exclusive remedy.
2.Agreement is contingent upon Buyer’s Money partners approval within xxx days.
This is a VERY basic script and sample stips explanation. There are a thousand derivations, but this should get you started and others should give you great ideas w/their posts too.
Best of success,
Joe Brillante
P.S. Hope to meet you at Georgia REIA sometime (we have a 2Guys table there).
Newbie question Joe - Posted by Jim (Alaska)
Posted by Jim (Alaska) on April 12, 2000 at 13:35:27:
Hi Joe, was just wondering in this instance where it is in “preforclosure” why you would not try to cure it and get the deed rather than trying to buy it?
Thanks
Jim
Table at GA REIA - Posted by messerb
Posted by messerb on April 11, 2000 at 23:03:46:
Joe said: “… we have a 2Guys table there.”
Joe, we just joined GA REIA. We’ll be attending your Experts Roundtable next week.
I didn’t know you had a table in the Associates area. We will be sure to look for you at the next general mtg!
Monique