Wholesaling question..... - Posted by Charity

Posted by SCook85 on January 17, 2001 at 08:53:11:

If you are doing a true assignment there are no upfront costs.

Essentially you are selling your rights in a contract to someone when you assign them your deal. You get paid for your rights, and they have to live up to what you agreed to in the contract. Title searches, etc… become the responsibility of your new buyer.


Wholesaling question… - Posted by Charity

Posted by Charity on January 16, 2001 at 19:37:09:

I am about to start doing wholesaling, and I was wondering how this works exactly. Say I find a home, do I put it under contract with the right to assign it? Or do I Option it? Then, once I find an investor who wants to buy it, do they pay me and then I assign the contract to them? Is the problem with title seasoning a factor in wholesaling at all? I would think not since they aren’t getting a normal loan usually…


Re: Wholesaling question… - Posted by SCook85

Posted by SCook85 on January 16, 2001 at 20:01:09:

Yes you would want to put the homes under contract and then assign your contract to your new buyer. Depending upon where you are getting your inventory, this isn’t always that easy. Most REO’s today require that you sign an addendum, and it that addendum it states that your contract is non-assignable. And banks have been reluctant to accept offers with this clause crossed out.

If you are dealing with private parties, there is no need to put in the contract that you have a right to assign it. If your contract mentions nothing about assignability then it is assignable.

Seasoning is not an issue with wholesaling unless your buyer intends to get bank financing. Many investors do want to go this route. I always ask my potential buyers how they intend to pay for the homes. If they say a bank, I tell them that we most likely will not be able to do the deal.

I hope this helps.


Re: Wholesaling question… - Posted by Eric

Posted by Eric on January 17, 2001 at 02:03:48:

What upfront costs (if any) are associated with putting a home under contract and then assigning it? Title search? Insurance? Closing costs? what…

Can any of these be built in automatically into a backend when the deal closes? Just curious since I’d like to do a flip but am not sure about what money I’d need to provide in the meantime (monies tight right now).