Flip This Wholesaler

2/8/2009

* Looked at 6 houses (3 Saturday, 3 Sunday). Made offers on all of them.

* Ran 7 miles (3.5 Friday, 3.5 Saturday)

* Listened to Bob Norton’s audios over at REItips.com. Good stuff… Bob is a rock star.

* Decided that the offers I’m making are not low enough.

* Watched drunken Gasparilla pirates from my balcony through my $15 telescope that my Mom got for me at a garage sale.

Behold- Gasparilla…….

(click on the picture to get a better view)

* Wasted an hour of my life on the phone with a lady who called after seeing one of my signs. She told me her whole life story. Was supposed to meet her today to sign a contract but she disappeared into thin air. This happens to me all the time with women “buyers”. Don’t get mad at me, it’s true.

* Found two new cash buyers from the signs I put out Friday.

*Organized the stack of crap that has been gathering on the floor around my desk since the beginning of the year. Took me two hours to sort through all of it.

Behold- stack o’ crap…….

(This picture is only half of it, btw)

* Washed my car after 2 months of procrastinating. Got lost for a full hour on the way home from the car wash. Good times.

* That’s about it in a nutshell.

Over and out…

Oh crap- almost forgot! A wholesaler friend of mine was closing an REO deal on Friday via a simultaneous close (using the buyer’s funds to fund both transactions).. The title company we use has a disclosure that the buyer has to sign that states that they are aware of the fact that their money is funding both deals. Usually it’s no big deal, but this particular buyer wasn’t having it, and refused to close the deal unless my friend funded it with his own cash. YIKES. Luckily, he has access to the cash and had to run to his bank and wire the money (I think it was 57k).

Hope that doesn’t happen to me any time in the near future.

12/11/1008

I probably shouldn’t even be writing this, because I have a nasty habit of jinxing myself by saying stuff like this, but……. It looks like at least 3 of the 4 deals that are supposed to close next week, are actually going to close next week. I’m a little shocked/skeptical/afraid to go outside because I’ll probably get hit by a bus, but it appears like it’s actually going to happen. The 4th one (the one where they screwed up on the addendum), may close too, but I just haven’t gotten a verbal confirmation from anyone yet.

2 of these deals are being closed at my buyer’s title company (the buyer who is sans identification), and even though they have told me 12 times that they will do a simultaneous closing, I still think they are going to screw it up somehow. I’m just waiting for the phone call where they tell me they misunderstood what I was trying to do, and that it is really illegal to do simultaneous closings, and that I’m going straight to hell. I had dreams about it last night, and I’m going to be a nervous wreck until they actually close.

One of the deals is actually ready early (this is the one where I went directly to the asset manager). It’s supposed to close next Friday, but they contacted my title company today and said everything is ready. I am SHOCKED. Of course, now my buyer isn’t ready, but I won’t get into that right now. He’ll be ready by next week (he’s actually in Columbia right now and won’t be back until then). It’s always something…

I haven’t made any offers these last few days because I’ve been busy putting fires out and harassing people. I guess I better get back to making them, though, cause I’m not going to have anything in the hopper once these deals are closed.

That would be the best Christmas present EVER if I could close all 4 next week.

I can dream, can’t I?

6/26/2008

I get quite a few emails from readers asking questions about wholesaling REOs. One of these days, I will put up a FAQ section on this blog, but until then, I thought I would start posting a few of the more commonly asked questions in case there are others out there who might be wondering the same thing.

So, here we go..

Hi Steph,

My name is Frank from NJ, and I am new to wholesaling . I have some short sale , and wholesale training but still looking for the first deal. I read about your transaction on reibrain.com and was just curious. I have asked a few investors in forums about wholesaling reo’s. I have so many in my area and would really love to be able to wholesale the ones I find to be good deals. Anyway from what they have told me lenders will not approve of assignment contracts. So basically I would have to buy the house and then find an end buyer like one of my investors and do a double close . I really would rather flip the contract then put out my money first as you can understand. Can you give me any tips as to how you are assigning these reo properties without any problems from the lender? Continued good luck steph and thanks in advance.

Hi Frank,

You are correct in that (most) banks will not let you assign REOs. There are many ways to get around this, though, and still be able to wholesale them. What I am doing is using a simultaneous close. Basically, the closing between me and the bank and then between my buyer and me takes place at the same time, and both transactions are funded with my buyer’s funds, so I don’t have to come to the table with any money. Many title companies will not do this, but some will. What I would do is find the active wholesalers in your area and ask them who they are using as a title company. That is how I found mine.

You can also buy the property in an LLC or a land trust, and then sell your rights to your buyer at closing. I have never used this technique, although, this is the method my mentor, Steve Cook, teaches. Here is an article written by Steve that explains it in greater detail……

Another way is to have your buyer added on to your contract with the bank, and then after closing, give your buyer a quit claim deed in exchange for your fee. I would not recommend doing this, though, unless your buyer is someone you know and trust. I have only done it this way a few times, and it was with a buyer I have worked with several times before, and there was a mutual trust there…

Finally, as you mentioned, you can borrow the money for the first transaction, close on it with your funds, and then resell to your buyer right after the first closing (double close). There are quite a few companies who will lend money for this type of transaction. My recommendation is Fund This Wholesaler.net.  Not only can you get funding for your REO and short sale back to back flips, but you can also get a free proof of funds letter to submit with your offers.  If this is the route you are going to take, you would just have to take the extra costs into account when you are structuring your offer.

Anyway, those are the ways I know of to wholesale REOs. There are a few more hoops to jump through, but it’s really not that big of a deal once you start doing them.

Hope that helps,
Steph

6/12/2008

We are still waiting to hear when/if we can close on the deal that was supposed to close Tuesday. No one will return a phone call, or respond to emails, faxes, etc. They are a bunch of idiots, and I hope they go out of business and end up on the streets. Really, I do.

My buyer decided to wait to see if we could get this one closed, and in the meantime, the other deal I had lined up for him sold to another investor. HAHAHA. He is not going to wait around much longer, though, so if these assholes don’t give us an answer soon (as in tomorrow), then he is probably going to walk from this deal (his contract was up on Tuesday), and look for something else.

And then I am going to hop in my car and head down to Ft. Effing Lauderdale and set this stupid title company on fire. It would be one thing if they would acknowledge us in any way, and let us know what is going on and when we can close, but it is IMPOSSIBLE to get in touch with anyone who knows anything. VERY FRUSTRATING.

The other deal that is supposed to close tomorrow, I STILL do not have the HUD and title commitment for, even though the lady told me I would have it this morning, and then by noon, and then by 5, and now tomorrow. We are doing a simultaneous close on this, so I need to get the docs to my title company as soon as possible so they can get everything ready for the second half of the transaction. I can hardly wait to hear her excuse in the morning when I call bright and early to harass her.

To make myself feel better, I have been low-balling the crap out of the banks all day.

4/18/2008

Well, one of the REO deals I had going (the one where the listing agent forgot to send the contract to the title co. until 4 days before the closing, and who also told me to get a cashier’s check for escrow made out to the wrong company, and then the title company FedExed the check back to the wrong address and someone else signed for it, and it was MIA for 5 days….. you know- THAT one.. ) Well, anyway it closed yesterday! Woohoo! My first simultaneous close in the books. I got a call from the listing agent at 4:45 while I was on my way to the closing letting me know that the HUD was effed up. Hahaha. Shocking. It had something to do with the commission, but we got it figured out without having to get the title company to make a new HUD (which would have taken at least 3 weeks). What a pain in the ass this deal was, but at least it’s OVER.

Now I’m stressing out over the other deal that is supposed to close Monday. The buyer sent me a text yesterday asking if we were still closing on time, and I sent him back a text telling him I was trying to get it done on time, but didn’t know if the title company could do it by Monday. We’ve already extended the contract once, and I can tell he’s kinda getting pissed…. So, the lady from the bank’s title co. sent me an email earlier today letting me know that we could close it on Tuesday (the contract expires Monday).

I called my buyer to see if that was OK, and I haven’t heard back from him yet. It’s not like him to not return my call, so, naturally, I’m imagining the worst case scenario- either he’s dead, or he had a last minute change of mind, and is just going to bail.

If he doesn’t call back by tomorrow afternoon, I’m going to go into full-on panic mode. I have been harassing the listing agent and the people at the title co. for the last two weeks to get this thing closed ASAP. I can not even imagine not being able to close this on Monday, if they are ready. I will be exploring options B, C, D, and E if I don’t hear back from him by noon tomorrow. Hopefully, I am just over reacting, though. Wouldn’t be the first time….

Yesterday, I had the pleasure of meeting Deborah, who drove all the way up here from Venice to discuss working together. She’s a newly licensed broker in FL, and I foresee us making a lot of money together….

And then John came over to celebrate the deal I just closed…….

Also, we decided that we are using the proceeds from the commission of this deal (he’s my buyer’s agent, if I haven’t mentioned it before), to book flights to Costa Rica!! I can’t freaking wait to go! My friend who moved down there last fall gave me the go ahead to come down anytime…. There’s a small chance that once I get there, I won’t come back, but I guess I’ll ride that wave once I get to it (hehehehe).