wholesale

[Bencreole]

I am a newbie and i have an REo under contract for 127,000 and ARV is 270,000,i'm looking to wholesale but they told me it's not possible because of the clause the banks have,but there is a way to do it through a land trust. Can anyone please help me make this deal if they know how,please. Thank you, i don't know the process on how to make this happen. Thank you, please help me...

[Mr Investor]

There are 2 ways to handle this:

1.Start an LLC and than sell that LLC to your end buyer or
2.Do a double close

[rgchamb]

I would recommend a double close.   You have to find a Title Company that does them.  

If you can't find a Title Company for the double close, another alternative is to get a Bridge Loan.  That means they will lend you money to purchase the property when you already have an end buyer.  When the end buyer closes, they will take their fee (I think it's typically around 2%) from the end buyer's funds. I found some on www.reiclub.com under "Hard Money Lenders" just by calling them and asking them.

[Bencreole]

thank you so much. But just to make sure. I do have an LLC, (start an LLC) does that mean on any offers i should put my LLC name instead of mine and than when i wholesale to my end buyer i would also put the LLC name on the contract with him and close in that sense.
                                                                                                            As for double close, there's no credit check or money out of my pocket,is that right. I just need to find a title company that will,and fax them both contracts,the one with seller and one i have with buyer. By the way,what kind of clause can i put in my contracts to protect me losing any earnest money or in case my buyer doesn't fall through.Thank you very much....I appreciate everyone on here, thank you.

[rgchamb]

There is no credit check or money out of your pocket.  Here in TX, we usually pay $ for an option period, e.g., 10 days, where the contract can be terminated for any reason within the option period, and you get your earnest $ back.  Obviously the lower the option $ amount (eg, $10), the better.

[ericmedem]

The other alternative that no one mentioned is to add your buyer on for financing purposes and let him/her close with you on title.  Then after closing quit claim yourself off the deed.

I have done this with some sticky deals before and it works great if you have good buyers.

[Mr Investor]

The other alternative that no one mentioned is to add your buyer on for financing purposes and let him/her close with you on title.  Then after closing quit claim yourself off the deed.

I have done this with some sticky deals before and it works great if you have good buyers.

Interesting never heard of that strategy before. So what you are saying is add your buyer to the contract you have with the bank and than quit claim yourself from the deed after the closing.

[gordo2417]

There are many ways to wholesale a reo. 

Quit claim trick like Eric suggested.  You add your buyer to the offer.  You settle.  Then you quit claim your interest in exchange for a fee that your buyer would pay you.

Write the offer as an LLC.  Offer gets accepted.  Then go and establish the LLC, articles of organization (whatever your state specifies).  You get a buyer.  Your buyer "buys" the LLC and all of its assets (the property) in exchange for a fee.

Double close.  You close on the house with your own funds, HML, private money, bank, whatever.  Then you turn around and sell it to your buyer couple minutes later, next day, or whatever.

Simultaneous closing.  You use your buyers funds to fund both transactions.  The transaction between you and the bank would be funded by your buyers funds.  You come to the table with zero financing in place.  I've done it this way.  Its risky though cause if your buyer walks then your in a big bind. 

My preferred method is a double close since my local lender is so cheap to borrow from.  Prime rate for interest and 400 in closing costs on every deal. 

Nate-WI