Three Keys to successful investment real estate finance

As always, Randy has provided some critical information. I'd like to take this to another practical level with respect to the program.

As a novice investor, obtaining money to do deals can be problematic. The old maxim applies--When you need it, nobody wants to give it to you, when you don't need it, everybody wants to give it to you.

We teach wholesaling in the program for several reasons, the top three are listed below:

1) It is low risk--since we do not actually own the property, or it passes through us very quickly, it would be very difficult to lose money as long as you follow a couple of basics--mainly, give yourself a backout clause. Many people enter the program and are dying to acquire that first property and get in and roll up their sleeves to fix and flip it. Most of these people would find themselves in over their heads and wishing they had not done so. Wholesaling prepares us for higher risk investments.

2) It teaches us about investing--We learn to view and evaluate properties, work with agents and sellers, negotiate, put deals together, market properties, have successful closings, understand contracts in a somewhat shielded environment.

3) It connects us with real estate professionals--by building a professional team, we find good agents to work with, as well as title companies, attorneys, inspectors, accountants, appraisers, etc. But most important, building a cash buyers list creates money relationships with people who have money to buy properties. These people can become private lenders, or even partners in the future. Cultivate these relationships well, they will have immeasurable value in the future.

Never underestimate what you are gaining as a wholesaler. It is not a beginner technique. It is an advanced technique that also works well for beginners. Trump and Buffet still do wholesaling today.

I went through Dallin's link(find a deal) tried FSBO site and through many agents tyr to find first deal and haven't found one yet. I am remote investor and am unable to use bandit sign.

I have following questions:
1. For the assignment, I need to open a LLC that contains any property I bought/or will buy. I can either open a LLC through my account or through a web site, am I right?

2. Once I find a good deal, I use my LLC(instead of my name as purchaser for the time being until I transfer the purchase right to end buyer) to sign purchase agreement(put the deal under the contract), then within 10 days, I need to find a buyer? if not, within how many days I need to transfer the purchase right? I also need to put exit clause in the purchase contract in case I couldn't find a buyer but I asked many real estate agent, they all say no refund of the earnest money. I think I should change my direction of finding deals, using co-wholesaler or craiglist, continue keep an eye on FSBO, also now I am trying to find longer ADOM through agent listings, is my approach correct?

3. the procedure using LLC for assignment, is just the same as the procedure described in 30 day cash book except using LLC instead of me/myself, am I right?

thank you very much

FuguiRE, just want to recommend that you keep searching, there are many opportunities out there, but it does require persistence.

Here are some answers to your questions:
1) For a primary LLC, we would recommend that you use a professional in setting it up. The completeness of your LLC documentation is one of your liability protections. For an LLC that you are using to sell a property and avoid a double closing, that is a basic shell LLC, with no special needs, so you can choose the least expensive method available, usually just registering it through your state division of corporations. After all, this will just be a shell until you purchase a property into it, and then the LLC will be sold within minutes to your cash buyer.

2) Your explanation is correct, the time to transfer the right to purchase to your cash buyer via assignment is determined by the length of your inspection clause. I typically designate 14 business days, and if needed will compromise that down to 10 days, but rarely less than that. You sign agreements in the name of your LLC (I sign documents using my personal name, "as Managing Member for ___________________ LLC." The exit clause should say something similar to: 'Subject to a satisfactory inspection by buyer and/or associates within 14 business days after acceptance of offer."

3) I'm unable to definitively comment on whether the procedure is just the same as in the book, as I don't have a copy of the book here to review, but I believe that it is substantially the same. There are also links online that describe the process of "selling a property in an LLC."

Hi Dallin

Is there any example of using LLC put a deal under a contract? or It is the same as personal purchase agreement except(this part stated in your message above) -- You sign agreements in the name of your LLC (I sign documents using my personal name, "as Managing Member for ___________________ LLC." The exit clause should say something similar to: 'Subject to a satisfactory inspection by buyer and/or associates within 14 business days after acceptance of offer."

thank you very much

FuguiRE, it appears that you are just wanting to confirm what you perceive to be true. Everything that you stated above appears to be correct to me for a standard purchase of a property using your LLC. You do need to sign in an official capacity as stated in your post. And you do need an exit clause that reads basically as stated above.
I remind everyone that as coaches, we are not attorneys and are not providing legal advice here. We always encourage you to have all legally binding agreements reviewed by a licensed attorney in your area. We are only able to provide educational information based on personal experience.
If I've misinterpreted what you were asking, please advise, we're happy to help.

thank you Dallin for your help. I also wonder what agreement/procedure co-wholesaling to follow. Or if you know a link contains co-wholesaling agreement it'll be helpful

Fugui

Fugui, a co-wholesaling agreement on a property can be done as a couple of simple modifications to an assignment agreement agreement to identify the additional party and break down who gets paid what. Or it can be handled by initially establishing a non-circumvent/non-disclosure/confidentiality agreement, followed by an inital joint venture agreement, then followed by an assignment agreement. Or some combination of the above. If you would like copies of a non-disclosure agreement and a co-wholesaling assignment agreement, send me a private message with an email address to send to, and I'll forward them. Keep in mind that any document that we send out is for educational purposes, and you are advised to have them reviewed by a licensed attorney in your area.