myEmpirePROQuestion: “Should I buy a house from a Wholesaler?”
Maybe this question is not for you, maybe this question is for someone else who you may end up selling to later.
Should I buy a house from a Wholesaler?
Maybe you are an investor and you are looking to know if you should buy a house from a wholesaler.
The real question that I will use to answer that, is… Why not?
Now, there are quite a few “why nots”.
Why shouldn’t you buy a house from a wholesaler?
But the first one is this:
If there’s a daisy chain going on… what is a daisy chain?
So this person locked up a property under contract and then they have a co-wholesaler, and then another co-wholesaler.
Basically you looked through your market on the google groups and you find out that about 15 people are trying to market the same deal.
There’s a good chance that it’s not a good deal,
…that’s number 1 because if it was such a good deal, one person can get rid of it and sell it very quickly.
The market doesn’t lie, it is what it is and the market knows what it can pay for it.
PREVIOUS POST: How Do REAL ESTATE WHOLESALERS Get Paid?
…with that being said, sometimes you need to push a deal a little bit long enough to catch the right buyer or to capture the attention of the right buyer.
Some houses just don’t necessarily fit everyone.
So, Should you buy a house from a wholesaler, if you know that this person is actually a wholesaler and they have a contract and they’ve closed deals before in the past?
Yes, sure.
If they can show you that you know, you write a contract and they write a contract and they get it back to you,
… and there is a price that you want, then absolutely.
Here is something I’d warn you about wholesalers, the name on the owner’s record at the County may not match the name on the contract.
They may bring to you what they call an Assignment Contract,
… meaning they actually locked this property with another contract but they are going to assign that contract to you.
If they assign that contract to you, then you kind of want to see the original contract but you have to promise yourself that you’re not gonna be greedy,
… just in case they are making $30,000 or $40,000, don’t be like, “Hey can I get a better price?”
You need to find that… what price works for you, make sure that you are a strong enough person emotionally, not to get affected by greed and then you lock up the contract and then you fulfill.
Because it’s not just about this one deal, they may bring other deals to you in the future that can make you money or that can help you secure a property at a better price.
So you could be a landlord, it could be the house you want to live in, or they may help you sell another property to a person that you know you love that would benefit from that.
You don’t wanna go on that relationship and just be greedy, just know what kind of numbers work for you with that kind of property, and understand that some things may not happen conventionally.
TRENDING : 4 GRAVE MISTAKES REAL ESTATE WHOLESALERS SHOULD NEVER MAKE
… and you should make sure you have your own attorney that will look over things at the closing and make sure that title is actually passed to you properly.
You can also ask for your attorney to make sure that the title is being passed to you clear of any kind of encumbrances and craziness….that’s the part of your attorney to play.
Your attorney is not there to say, “Hey, who is the owner of records? Why is the contract different?”
… if you play that game, it’s not gonna work with wholesalers because wholesalers lock-up a property with a contract, which secures what you call the Equitable Interest in the property.
But they haven’t closed, and some people are gonna be like: “but how can you sell a house that you don’t own?”
Well, for me that’s what you call a jammed question. That means a stupid question.
There is no such thing as a stupid question, but it means that you are playing the wrong game.
If you are trying to ask those kinds of detailed questions, you need to go deal with a realtor.
Go deal with a real estate agent who would do everything conventionally, but that also tends to mean that you may not get to find the same kind of deal.
HAVE YOU SEEN THIS: FREE Comps & Data Tool
Like, if you find a house that is on a discount, that’s the trade off.
You gotta be open to the idea that some things may be out of the box but not necessarily illegal.
So, Should you buy a house from a wholesaler,
… Why not, as long as you make sure that it’s a legitimate situation and the best person to find out for you is an attorney.
But make sure you know what you are doing because for the most part a wholesaler will sell you a house “as is”.
There is nothing guaranteed, but if you are buying to flip and you understand the game of real estate then you can really pick up some really good deals from wholesalers.