Wholesale Property Question
Hello everybody,
I ran across an investor who sells properties (he purchases them from other people and is the owner in the transaction) to other investors at or below wholesale for cash. He claims to have numerous buyers who are pre-approved in line to purchase the property from you, where you make around $7k - $10k in profit within 45 - 60 days. This sounds fishy to me. Why wouldn't he just sell it to these pre-approved buyer's for a larger profit, and cut out the middle man? Why would he want to assist me in the resale when he could just sell it to them in the first place? If I could have some thoughts on this that would be great. Is there something I'm missing here, and is this done more than I am aware?
Thanks! :-?
It sounds kind of fishy to me, too! What does he want from you? Is he looking for you to purchase the house from him and then sell to one of his "qualified buyers"? This doesn't sound right to me... If he is a wholesaler - he should be looking to assign a contract to you for a certain price and then you do what you want with the property...
If he is purchasing these properties himself, he should be selling to his own list of buyers...
Ask him for some references of investors (such as yourself) he's done this for... Call them and speak with them... Ask him why he wouldn't just sell to his buyers?
Good Luck
[addsig]
I buy from someone who does this. He does a simultaneous close, he doesn't hold property but has a great nack for getting good deals and making some quick money turning it to me. This enables him to do volume. Not that I'm vouching for whoever you are dealing with, need to do your own research on them.
I have found a property and the seller wants 75k and the appraised value is $105k. I have a buyer wanting to purchase it for 90k.
How do I set it up so a check is written to me/my company at closing for the $15k?
I read on this site to open an escrow account with an assignment and I could close on behalf of the buyer. Could someone please detail me the process regarding this option specifically how to get paid at the closing table instead of the buyer giving cash upfront?
1)Doesn't the buyer have to be there at closing to sign all the paperwork from the lender since the loan is in the buyers name?
2) Can 2 seperate checks be cut, one to my company and one to the seller if I open an escrow account?
Please someone walk me through this step , or any other idea, step by step because I am looking to stop requesting the seller to sign an addendun signing any thing over thier asking price to me then taking them to the bank to cash check and receive my amount over the asking price.
I am looking to legitimize and pay taxes and relieve myself of that extra headache gragging the seller to the bank; it is getting harder for them to cough up that money.
Bottomline, I am trying to have a check cut to my company at closing; how can I accomplish that legally?
Thanks in advance for any and all assistance...
mattfish 11,
Yes, this is exactly what he says he does. I asked him why he didn't just sell to his own buyers, and his response was "Yes and No. I come across more deals than I can close on myself. So I bring in a cash buyer to buy from me. It is a way to make money faster." But that still didn't explain why he would then want to help me sell it to somebody else. The only logical explaination that I can come up with is that he doesn't want to wait to close a loan with these people, and it is easier for him to go with a guaranteed cash deal. Then, he helps you out on your end for some extra profit, and if that fails, oh well, it's your deal now, not his. Does that sound possible? He responded to my first batch of questions, but not my second, so I will re-submit them this morning. Thanks for your help, I will ask for references.
SloCounty:
Does not sound fishy to me. If he is doing major volume, this could be the case...
The bottom line is this... If the numbers work, then go for it.....
I know guys who stricly wholesale and pass on deals that make $10k -$30k. Retailing never goes as plannned, and 30-45 days does not add up. I have had properties fall in and out of escrow several times. They also say that 40% of all deals dont close.
I would try to get deals from him that make you $10k after all the dust settles including paying the realtors.
Best Riches,
Jeff Adam
[addsig]
king,
maybe you can just assign the contract for the home for a fee?
But if you want to do it the other way, I imagine what you'd have to do is contact a title company to do a double closing for you. (that's all I know or I'd tell you more)