About to Venture Out into Wholesaling/Need Help with Minor Questions PLEASE

[wr1ght7]

Hello Everyone,

After months of studying everything from home real estate courses, hundreds of online articles and other study material I am going to venture out for my first deal in wholesaling, but before I do so I need help with a few minor questions.

1.  I have read articles not only on this site but others as well that when "wholesaling" properties some people get burned on some deals when assigning their contract over to another buyer.  For instance, one investor (A) in an article assigned his contract over to another buyer/investor (B) and was going to collect a $3,000 profit from the deal.  But it comes to pass that the investor (B) ended never closing on the deal and the first investor wasted his time and never collected his money.  My question is:  How do I protect myself from getting burned like this?  Should I collect the assignment fee up front?

2.  This is my last question:  When assigning a contract over to another investor/buyer, do I just hand him/her the contract with my name on it and the seller's name on it and let him/her take it to closing?  I' m not sure how this step of the process works in assigning a contract.  Could someone please explain this part of the process to me?

I appreciate everyone's help as I am just starting out and eager to learn as a newbie.

[Jeff Adam]

Wright:
As I posted to your earlier.  Open escrow as an 'assignment" and 'assign'  to your wholesale buyer.  This is very easy to do.  Make sure you collect your fee from your wholesale buyer first.  Take your wholesale buyer by the hand and into the escrow office, have them draw up an amendment to 'assign' the escrow, dont sign until you have cashiers check in hand.  Contact seller and tell them you are closing in your partners name.

In terms of your wholesale buyer not closing, that is why you collect your fee first.  You can also line up some financing that your wholesale buyer can use such as a hard-money lender or private lender.  If you are buying right, your buyer should be able to get 100% financing.  You are not obligated to get financing arranged for your wholesale buyer, but it makes the deal go smoother and if you are really slick, you can collect a referral fee from the lender!


Best Regards,
Jeff Adam