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I’m looking to work with other wholesalers to pass on their good deals to my cash buyers that are looking for good deals.
I plan to get an “option” on the deal with the wholesaler to have control of the property and to lock it up for 14 days for my cash buyers to review. Is it better to get a Purchase & Sales Contract with an exit clause in it or an Option to Purchase Agreement on the deal? Since the deal will be locked up for 14 days and this is an exclusive agreement, do I need option money to secure the “option”? Or to get less resistance, should the wholesaler be able to continue to market the deal as well?
I plan to assign my “option” to my cash buyer and to split the deal profit with the wholesaler when my cash buyer closes the deal. Any thoughts?
Thanks
NickHI Nick
It is always better to work with the seller/owner directly vs another wholesaler. Many rehab buyers will NOT buy from you if there is a daisy chain (middle people in the deal). You could be cut out completely once they discover that you are a middle man for someone else’s deal.
You’ll make MUCH less money if you are just the middle man for someone else’s deal too.
It is always better to have a purchase contract with a contingency clause… directly with the owner of the property.
Nick, unless you actually give some money for the option premium it technically is unenforceable if the seller sells it to someone else. A purchase contract is basically the same thing if worded correctly, but the 8 or 10 page realtor contracts usually state that they won’t be recorded. Hope this helps.
The laws are different in every state. In most states, the option consideration does not have to be CASH/MONEY, but it could be something else, like your marketing services worth $x, HBS sign rental for $x, — get creative. You should write on the contract what your “consideration” was.
Even if you do put up cash for the option consideration, it can be $1 or $10. It does not need to be a lot of cash.
Actually I have a lot of buyers that want to buy ‘wholesale property’ that will do a JV deal with me. The problem is finding all these discounted wholesale properties for these buyers.
I’m on a tight budget and doing marketing in the local area on Craigslist, but it seems that all the advertised wholesale properties are being offered by other wholesale investors. I’ve heard that some markets are better for wholesaling than others.
I’m looking to market virtually in another area for discounted wholesale properties. How would one have to change the business operation to successfully do wholesale flips virtually?
Thanks,
NickIf the wholesale property is advertised on craigslist or anywhere else, it is almost always already over priced. There is no meat left on the bone!
Even with limited, or no, marketing budget you can
1. recruit bird dogs on craigslist to go find deals for you. See the Mega Lead Generator book in the New Member Bonuses. This has the exact ad you need to run.
2. drive around neighborhoods that are just under the median price range in your area, look for properties that need a lot of work, look vacant, have tall grass. Then talk to the neighbors to see if they know how to get in touch wit them. While you are driving around, talk to the mail person, UPS driver, Fed Ex driver, meter reader, etc that you see… offer to pay them a $500 or $1000 bonus if they refer a house to you that you are able to buy.
3. get the code violation list. It is usually free. If you don’t have money to send postcards to them, then you can drive to the house to talk to the owner or ask neighbors to see if they know how to reach the owners.
4. for about $30, you can get a set of magnetic signs made for your car. The sign should say we buy houses or sell your house fast or something like that. You will be a moving bill board – for only $30
5. Get some business cards made or make them at home. They also need to say we buy ugly houses or something like that. post these biz cards on bulletin boards at walmart and any place else you can find one. Laundrymats usually have a bulletin board.
6. every time you talk to anyone, anywhere, tell them you are looking for people who need to sell their house fast. hand then a homemade biz card.
7. put a flyer at the U-Haul places around town that say, I will pay for your move if I buy your house.
What else can you think of?
Any and all of these things are better than trying to make a little spread on someone else’s wholesale deal.
With a little effort, you can find your own wholesale flip deals.
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