Flip This Wholesaler

So, I ended up getting that deal sold that I talked about in my last last post, although it was a huge pain in the ass, and I’m only making 2k on it.

None of my buyers who I thought would be interested in the deal, were interested , and after marketing for several days and not getting any positive feedback, I finally decided to just dump it.

Like I mentioned in my last post, these piece of crap houses can sometimes be hard to sell, even if they are dirt cheap, and especially if they are frame and have only 2 bedrooms.  The house I have under contract is frame with only 2 bedrooms, plus the 2nd bedroom is really more of a glorified closet, so it’s essentially a 1 bedroom house. Which is kinda hard to move.

When I made the offer on this, I put a 7 day closing in the contract figuring that the bank would send their addenda back with a closing date several weeks out, like they usually do. It turns out that the seller is a private lender with just a few properties to sell, and doesn’t need twelve years to close like most of the big banks do. So, what I’m trying to say is, I didn’t really have a whole lot of time to find an end buyer. The seller is ready to close Monday.

The guy I’m selling it to is a wholesaler/investor who does quite a bit of business, and is one of the buyers I had in mind when I said in my last post that I could probably just dump it for a few grand if I wasn’t able to find another buyer.

The seller wouldn’t agree to close at my title company, but since this was just a regular assignment deal (or so I thought), I figured it would be fine to close somewhere else- I mean what kind of title company doesn’t know what an assignment is?

I’m sure you can probably see where this is going…

So, I went by the seller’s title company Wednesday morning to drop off my EMD and also to let them know that I’d be sending over an assignment contract later in the day as soon as I got it back from my buyer.

You should have seen the look on the lady’s face when I told her I was assigning the contract.  She pulled her glasses down on her nose and did one of these…(seriously, she did)

I totally knew what was coming before she even opened her mouth…

She proceeded to tell me that it’s not legal to do an assignment, because you can’t change the terms of the contract without the seller’s consent.  I then tried to explain to her what an assignment agreement was and that I was not changing the terms of the original contract, but rather assigning my rights in the contract for a 2k fee.  Needless to say, I didn’t get very far with my explanation before she cut me off, shut the little window divider thingy in my face (seriously), and told me she’d have to check with the attorney and see what he had to say about it.

Awesome!

So, she came back a few minutes later and explained to me that yes, I could assign the contract, but I couldn’t assign it for a fee, because that would be changing the terms of the initial contract. Which is illegal.

??

Are you effing kidding me, lady?

At this point, as much as I wanted to sit there and argue with her (and also smack that condescending look off her face), I knew that it was going to be a complete waste of my time and energy to do so, so I just told her I’d be back later once I talked to my end buyer to see what he wanted to do.

My end buyer, thankfully, is as cool as the other side of my pillow and agreed that there was no sense in trying to argue with the morons over at the Law Offices of We Just Make Shit Up As We Go.

So, we wrote up a new assignment contract that says I’m assigning the deal to him for $0, and he’s going to pay me a consulting fee of 2k once the deal closes. There are several other ways we could have structured it, but most of them would involve a second closing, and since my assignment fee is only 2k, a good portion of that would get eaten up in closing costs.  Plus, doing a double closing would mean extra money for the seller’s title company, which would kinda be like rewarding them for being stupid…… “Hi, you’re a dumbass- congratulations, here’s $500!”

I don’t think so.

So anyway, that’s the story. The title is clear and we’re closing on Monday, which is good. There was also some other drama that went on with this deal, but unfortunately I can’t talk about it in public for reasons I can’t talk about in public. I know that’s totally lame, but that’s all I can say about the situation at this point.

In other non-real estate related news, I’ve decided to chop all my hair off again, which I’m doing tomorrow, and am very excited about. (Sorry Mom).

Here’s the picture I’m taking in with me….

I likey.

Alright, then. That’s all I’ve got for today. I’ve got offers to make and miles to run…

Later Alligators!

P.S.
Is dumbass one word or two? I asked on Facebook, but we seem to have a split jury.

P.P.S.
Thanks to all of you who are participating in the 30 Day Challenge with me! Let’s knock ‘em dead this month guys!