Wholesaling/Assignments

[maxyourflip]

Good Day All,
I need some advice on wholesaling/Assignments, preferably from a REIN members perspective but all input is welcome. I need to speak with people who have been through this process SUCCESSFULLY in the province of Alberta. I have numerous questions as I am about to assess a property for sale but I have no real-world experience.
I need to know about contracts, exit clauses, legal input, property goldmine scorecard, due diligence, the whole process from start to finish. I am relatively new to this game and I would appreciate some help to ensure I am on the right track.
Thanks in advance,
Tim

 

[Thomas Beyer]

My 2 cents: Since assignments can collapse you must be able to close yourself if the person you assign a deal to doesn't close.

As such, you need cash and be able to get a mortgage, and once owned must be able to rent it, or buy it sufficiently cheap that you can sell it in short order to at least recoup your closing costs plus holding costs.

My second 2 cents: The term "wholesaling" implies that you have a (fairly large) network of retail clients, for example created through years of experience or a website or other online lead generation techniques and it implies you know what true value is, i.e. have enough margin to assign profitably.

==> As such a senior strategy for folks that know a certain market segment very well, and often buy all cash !

 

[Zach Peterson]

I recently went through Barry McGuire's Rapid Cash Flow Program where the topic of wholesaling and assignments were discussed in depth. Although these types of deals may be simple, and the quick cash is appealing, they are not easy to execute.

In order to assign a property at a "Wholesale Price" you must be able to negotiate a deal with the vendor that is at least somewhat discounted below market value. Preferably considerably lower than market value so that the person you are assigning the contract to can justify paying you a referral fee for finding the deal. You must have also done an accurate analysis of the property in question. In order to achieve this, a comprehensive understanding of traditional real estate investing (as discussed in REIN's ACRE Program and Don R Campbell's books) is required in order to be successful.

Also as Thomas mentioned, you must have a network of potential buyers who are ready to close on deals quickly so that you are not left having to close on the deal yourself. Once your offer is accepted and your subjects are removed, you are required to fulfill.

 

[SVS]

Work on building a list of cash buyers, really know your market. Wholesaling is easy if you get the property cheap enough, most people make the mistake of overpaying.