OfflineDeal Timeline
1. Locate property: (agent, craigslist, zillow, FSBO, etc)
2. Research property:
a. FIX & FLIP - Determine ARV ensuring there is nothing cheaper nearby without a good reason and the sold comparables support the ARV. Determine approximate rehab costs based on pictures and general assessment of the property. Determine Max offer price by:
ARV - investor profit – rehab costs – your profit = MAX OFFER PRICE
b. CASH FLOW - Determine Gross rents, and expenses (taxes, ins, management). Determine the NET CAP Rate by:
Gross Rents – taxes, mgt – ins. = NET Operating Income/Purchase Price = NET CAP RATE
3. Make Offer: Call listing agent or your buyer’s agent and have them draft contract for you: ($1K Earnest money, 2 weeks for inspection, 3 weeks to close with cash)
4. Get Counter Offer
5. Counter Offer Back
6. Get Under Contract
7. Market Property: Immediately after you get your counter offer accepted begin marketing property: (buyers list, craigslist, myhousedeals.com, etc)
8. Deposit Earnest Money: Within 3 business days of the final counter offer being signed by both the buyer and the seller, the earnest money deposit will need to be deposited in the title/escrow company of your choosing after the escrow agent looks at the contingencies and confirms the date you would need to get the cancellation in should you need to cancel the contract. Up until now there is ZERO RISK because even though you get a property under contract the most they can do if you don’t EVER deposit it is to cancel the contract!!! THERE IS NO RISK!!!
9. Due Diligence Period Expiration: before the end of the due diligence/inspection period you will send a signed notice of cancellation to the listing agent, your buyer’s agent if you are working with one, and the title/escrow company where your earnest money was deposited UNLESS you find a buyer to replace your earnest money. As long as you cancel the contract in writing ether via email or in person and you can prove that you got it to the agents and the escrow officers involved before the due diligence/inspection deadline there is ZERO RISK because the title/escrow company will always do what the contract says. THERE IS NO RISK!!!
10. Closing - Once the buyer replaces your earnest money you can assign the contract, double closing docs, etc, and wait to close.
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Talk about breaking it down,here it is DGers.
Thanks coach
Aaron-n-Suzy
How do you figure out what the expenses will be? (taxes, insurance, management)
Teresa
College Station, TX
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"Declare that you will prosper despite every difficulty that may come your way. Don't just survive; thrive!"
-Joel Osteen
thanks for the info DC....
This is good advise, cant believe nobody has any thing to add.
Aaron
Diggin up the dead
P.S. - Everything else is immaterial, irrelevant, and unnecessary.
Sometimes threads get over looked and they have a lot of good info in them.
We all are just trying to help each other out and this explains the wholesaling process.
Its not perfect but it does help and that's what is important.
Lets make it better by giving input
Aaron
wholesaling is the best way to make money if you need to pay the bills....if you need cash in your hand to live on.... wholesaling is the way to go... if your fortunate to have some money and a good income and ($100k in the bank per matt larson) then you can start rehabbing and then expand into rentals
wholesaling will make you rich - rentals will make you wealthy !!!!
WALT
When we put our bandit signs out they are seen by people who have a home and for whatever reason they let it get in bad shape and when they try to sell through an agent, well that agent tells them they need to fix it up so someone can get financing on it and they cant no money. They become embarrassed and withdrawn from the house all together, it sets for years.
I have heard stories like this, we can help these people its what we do..
We are risk free when the wording is correct on the contract, things like approval by partner, 14 business day inspection I call these Houdini clauses. We have buyers list and marketing skills this is wholesaling 101 and we can tweak it and make it our own.
I love the concept of wholesaling, plan on doing it forever.
Just my thought.
Aaron