flipping a property

[vfig]

I have a property that I can buy for 85k (house goes for about 125k after 25k in repair/updates). I also have someone who is willing to pay 90k. It needs a lot of work in order to turn around and sell it for a bigger profit. I would rather take the easy 5k. How do I do this so I don’t have to pay closing cost? Is their any way I can do this without having to pay for anything? Can I do a double closing or something? I would prefer not to be involved in the paper work but I don’t want either of the parties taking advantage of me and going around my back finalizing the deal, leaving me with zero dollars.

[loanconsultant]

When you get the seller to sign the purchase&sale make sure theres a line in the contract that states its assignable.Let the title compant or closing agent know your assigning the contract.The buyer is supposed to cover closing cost.

[ARamirez]

My question is how is your buyer offering you 90k if he has not looked at the property? If he has looked at the property how come he is not able to know find out who the owner is and buy direct?

Just wondering....

[WilsonTaylor]

ARamirez,

The buyer may have seen the property.  I would think that vfig probably has signed a contract to buy the property for 85K and the buyer has offered to purchase the property for 90k.  

Vfig,

There are 2 ways to wholesale this property.  The easiest way to handle this transaction would be to assign the contract to your buyer for 5K.  Your buyer would merely pay you the money to assign the contract to him.  The other way to handle the transaction would be to do a   double close or simultaneous close.  The advantage to this method is that your buyer does not know how much you paid for the property.  The disadvantage is that you have 2 sets of closing costs.  If you have your seller pay the closing costs when you buy and your buyer pay them when you sell, then you can get by without paying closing costs.  On the other hand, if you stand to make $5000, then you can afford to pay $500.

Wilson

[ARamirez]

I'll wait for a response from vfig. My assumption would be that vfig is still doing his first deal and like I was a couple years ago a little afraid to put anything in writing. I personally even now would not think to put a property under contract based on a verbal offer unless I knew I could take the property myself if that deal fell through.

OR an extremely low earnest money or option fee that I could afford to lose.

[vfig]

You guys are both right

The new buyer has already seen the house and I am a new guy to real estate investing. This will be my first deal (if it goes through). I have nothing in writing with anybody at this time. If this interested buyer did his homework, he could find out that I dont have a contract and could find out who the owner is and contact him to make an offer.
I was thinking, why cant I put the house under contract with a couple of subject cluases (subject to financing, subject to inspection, have a clause that allows me to show the house to anyone I want at any time). This way I dont have to worry about anybody going behind my back and if for some reason I cant sell it, I can use the subject clauses to pull out with no penalty. I like the idea of "assign the contract to your buyer for 5K". This way I dont have to waste time attending 2 closings.

One other question:
This house is on a quite dead end side street. The only set back, maybe, is that there is a strip club at the corner of the street. Is this something to stay away from? In order to get to the house, you must pass the club.

Thanks for your replys

[WilsonTaylor]

Vfig,

If you want to wholesale this property, then you need to get it under contract, ASAP.  Put in the contract that the purchase is contingent upon your partners inspection and upon financing.  Your partner can be anyone that you can flip the property to.  I would recommend that you allow at least 6 weeks to close (maybe 2 months).  Inspections typically have to be done in 2 weeks, so you need to get you buyer lined up fast.

vfig wrote:
"One other question:
This house is on a quite dead end side street. The only set back, maybe, is that there is a strip club at the corner of the street. Is this something to stay away from? In order to get to the house, you must pass the club. "

Are you going to buy the house for rental or will you flip it?  If you are going to flip it, you don't care.  The only thing you need to worry about is whether your buyer will pay more for it than you have on the contract.

Wilson