Brid Dog Vs. Wholesale
Sorry in advance for all the questions but please help.
As a bird dog the only thing I'm providing my investor with is the subject property address and the sellers name, address and telephone number. I never contact the seller myself.
and as a wholesaler I'm required to put the property under contract. Do i set up closing with a title company and pay for the title search, do I pay for an inspection?
Again thanks for anyone's help
It all depends on the way your agreements work with the investors you work with. As a bird dog you shouldn't be required to pay for the title search, inspections, or appraisal... At least I don't.
are unethical. I have to disagree. As beginner, you cannot forsee all the different situations where a deal can fall through. I say use it - its totally legal and there is nothing unethical about it.
As a wholesaler you just need to put the property under contract for a price the rehabber/investor is looking for. Do whatever it takes to put it under contract. Include a clause like "subject to professional inspection" AND "subject to partners approval" - your partner being the investor you are wholesaling to.
Now, I hear about a lot of people saying that these "weasel" clauses (i.e. "subject to partners approval"
ANYBODY ELSE HAVE OPINIONS ABOUT THESE CLAUSES??
Hope this helps, just go out and do it - you will learn by doing...
Good Luck!
[addsig]
it help a lot thank you for clearing a couple of things up
i have one more question
Am I suppose to set up closing with a tile company and pay for a title search
I know it probably depends on the agreement between the wholesaler and the investor but I'm asking whats the norm. Do most wholesalers pay for title search and set up closing
As A Bird Dog, you wouldn’t be required to incur those costs indicated by Matty.
As a Wholesaler it depends on what you are doing. If you are assigning the investment, the costs are taken on by the Buyer.
However, if as a Wholesaler you are Flipping the investment, it maybe different. I do Double Escrows to accomplish my flips. I own the property before I sell it. I do a title search, inspections and all that is needed to protect myself as a Buyer. The Appraisals are based on Comps. They would have been verified before I present a Offer To Purchase.
I have read Posts, doing Flips with the same Escrow. Since I don’t do the kind of Flip I do not know how that is accomplished. It just seems to be more troublesome.
Regarding “weasel" clauses, a more acceptable term to me is Contingencies. I do use “Subject to Partner’s Approval” along with some others. Make sure you do have a Partner and not just using the statement. The “Subject to Professional Inspection” clause if used should also include “At Buyer’s Option”. Therefore, it is not mandatory to incur the cost of a Professional Inspection. The term “Professional Inspection” is vague and unclear. What the Buyer’s vs the Seller’s understanding may be different. I am in California, Law Suits are frequent and numerous. I put everything in writing for clarification.
If at any time prior to the closing date, you discover information that would make the investment not as desireable as first determined, by correctly using Contingency Clauses, you are released from the Obligation to Close with your Deposit returned to you.
Taiyo
Clauses, Smauses!
No one can force you to buy a property that you have decided that you no longer want. If you get a property under contract, you don't need all of those clauses giving doubt to the seller about your ability to perform as you say you will, or making them think you'll run off if things don't go your way..
If you're wholesaling to investors, you're most likely buying junkers, and everyone involved knows its a junker. Therefore little cash was used as earnest money, (Or at least should have been a small amount). If you can't wholesale the property within the set time limit, toss a few extra bucks to the seller to extend the contract if you've got something brewing. If not, you've agreed to pay too much, and you've just attended a seminar. Make sure you get your money's worth out of the lesson, because you will be forfeiting your earnest money (which should have been small) if you can't perform.
If you want to run with the big dogs, you can't pee like a puppy! If you want the bigger paydays, you'll have to take a little bigger risk.
Just my take on things,
Jeff[ Edited by jeff12002 on Date 04/24/2004 ]