To assign ( Whole sale contract)
When you al are doing whole sale deals.... arent you basically finding a deal that fits the certain criteria of one of your investors then doing a contract with the seller then assign it to the investor for a fee?
Did I come close to explaining it?
If so, lets say for example your investor is interested in deals with lots of equity just for example.
So I found a home that has lets say 35000 equity.
FMV of 95000 but I lock it in a contract for 60,000.
I call my investor and say, Mr. Investor, I have a deal that fits what you are looking for here is my contract proving I am a Principal in this transaction and that I can assign it to you for a fee of lets say 5000.
He says Yea!!! Ok, is it as simple as that or have I left out a million steps?
COmeon pro's enlighten me!!!
Mark
Hi,
I'm new here and saw this post. It looks like a good question, but I'm curious why no one has replied?
BTW, what does "locking in a contract" mean exactly? I'm seeing, as in the above example, that you are locking in 60K, but what about the other 35K the seller expects from you? I know there is 35K in equity, but how does the seller recoup this? Am I missing something - which I'm sure I am since I'm new to all of this.
Thanks,
Jer
Mark,
You hit it right on the head. That's all there is to wholesales. Tie up the property and assign it to another investor for a nice fee.
Best of luck,
Vic
[addsig]
right ... and the idea is to get the deal to fit most of the investors out there. Meaning take into consideration the repair cost, holding cost, buyer profit as well as tax/hazard and selling cost(%3) ... That way if you really have a great deal, you start with a great finder's fee. If your deal does not cover the tax/hazard, you bring down your finder 's fee and ... The challenge that I had to deal with was to make sure that I do not lose a deal because I made a too low of an offer.
A deal may be attractive to a set of investors but not good enough to another type investors. That does not mean you should not make money... simply bring down the finder fee down a little...