Real Estate Investing Training Video - How To Wholesale Houses Part 2

[MBJB07]

Hi Mike, I have two quick questions...

1. Do I need a lawyer to make my contracts for me so I can be sure they're water-tight? If not a lawyer, then who?

2. If I don't know the buyer and I ask for earnest money, how much should the check be for, and does it go to the title company or do I keep it?

Great videos! You summed it all up nice. I knew it couldn't be as hard as all the other videos make it sound. Thanks!

~ Michael

[23muba]

hi there

some general questions about wholesaling, If the house is trashed what can be done? I mean when you show it to your local buyer, what if he says no? Whats the exit plan? Thanks.

[localmentor]

@23muba - most of the houses we wholesale are trashed - that's why we get them so cheap. It actually confuses rehabbers/buyers if the house is too nice. Wholesaling junkers is what it is - buyers are fix and flippers and they don't care what they look like, they only care there's enough spread to cover rehab costs and a profit. 

[kiddreaper1]

Hi jake. I am also just starting off. I have a website that brings buyers to me. I have 2 questions 1. what form do i give the seller to turn the property over to me. my next question is i have a motivated seller but he is saying he can't put it under contract because the bank will recall his loan in full. what do i do to get around this?

[localmentor]

@kiddreaper1 - if we're talking wholesaling, I use a purchase and sale agreement - this gives me control of the property. Many of the deals I wholesale (or rehab for that matter) are vacant - my contract says I can have access to the house to show contractors or lenders, etc. this allows you to show it to buyers as well.

"recall the loan in full" for going to contract? they can't and how would they know anyway. Are you trying to do a "subject to" deal? just going to contract to sell ....

[localmentor]

....would not violate a due on sale clause unless the contract spanned a very long time (like a 3 year option for instance). You might need to get clarification. Once you go to contract on a wholesale you're going to find a buyer and assign (or double close) at which time (closing) the original lien holder gets paid off anyway. no problem.

[kiddreaper1]

@localmentor O yes i am trying to whole sale so i was making sure i have the right contract printed out. I had that document printed already. thank you. as for the guy. i was not trying to do a "subject to" the guy needs to move out but he owes 42000. he said he talked to the bank and they told him he can't put it under contract or they will accelerate the loan. I wanted to explain to him they won't do that because banks don't want properties they just want the money.

[kiddreaper1]

@localmentor also i have a meeting with him on thursday to view the house so i wanted to know what to say to him about the contract. he lives in the house currently.

[Ednyce81]

now my question is this. what is you cant find a buyer ? do you get stuck with the house or is there a clause in the contract that you can just give it back free & clear ? because im new to this and am looking forward to my first sale. been reading alot of books & stuff & just want to get all the info i can be4 i begin. thanx

[Ednyce81]

@Ednyce81 what if you cant find a buyer is what i meant to say

[localmentor]

@Ednyce81 - I get asked that question a lot! If you tie up a good deal, you usually have people fighting over it. I do have an inspection clause in my contract without a date contingency that allows me to get out of the contract up to the last minute. Build a buyers list first (see MichaelJake d o t c o m for a video on that) and that will give a piece of mind that you'll be able to move your deal when you get it!

[Djdmc]

How would a double closing go, from my understanding the investor comes in first and pays and then the seller comes in and closes and collects his or her money, but what if the seller chooses to back out of the deal on the day of closing.

[localmentor]

@Djdmc you're resale contract needs to be contingent on you closing with the seller.

[crazy3rdgen]

now i missed the process of payment. Explain how that works, would the investor give you the 60k??

[localmentor]

@crazy3rdgen - if assigning a contract, you get paid for the contract and the contract buyer brings money to the closing to pay for the house.

[crazy3rdgen]

@localmentor yes but these transactions are made at the title company? Does the investor cut you a check or the title company? Also i sent you a message.. Im very interested in checking out your purchase agreement contract with the seller, and also the buyers contract you assign to your investor.. I have the assignment agreement already. if you dont mind please reply to my message i sent you to your inbox.. thanks for your time

[localmentor]

@crazy3rdgen most of the time the buyer brings a check to my company at closing and one to the title company (or a wire). Sometimes they use a HARD MONEY LENDER to fund both purchase and assignment fee, in this case, they wire all of it to the title company and the title company issues me a check and that amount is on the settlement statement.

You can get all my paperwork with "The Lazy Man's Guide To Wholesaling Houses" on my MichaelJake website

[crazy3rdgen]

@localmentor ok.. thanks there you are

[TheREIMaverick]

I like what you are doing here and I like your videos! Keep up the good work! Also 1 quick questions….how long have you been using videos to market your message online?

[gcp2000]

great vedeos.. Just trying to creating enough guts to gets started.

[RLJ93727]

Good real estate video

[wealthinvestor80]

Question? Can you please explain how the Earnest Money Deposit works on both ends do I give it to the title company? (Great info it keeps me going!)

[90260]

do i have to have a real estate licene to do this?

[localmentor]

no.

[90260]

Do you recomend 5 Books for me to buy and read in Order for me to get started?

[DOOCLINKUS]

Great information. It's refreshing to find a real estate investor who actually explains the process.

[kyotic77]

I got a whole lot of foreclosed properties, and some buyers. My question is, what if the owner(in a pre-foreclosure) owe more than whats the house i worth? also, what if their equity is also in the negative? whats an LLC?

[localmentor]

If they owe more than it's worth (synonymous with negative equity) your only option to help them is to short sale it (get the lender to accept less than what owed to avoid foreclosing and liquidating the house themselves). Ideally this is the lesser of many evils the seller faces. It will ideally stop them from going to foreclosure and help their credit recover quicker, however many lenders still won't give them a loan within 3 years (same as foreclosure) for another house.

[localmentor]

LLC = Limited Liability Company

[kyotic77]

How can i aquire an LLC and how do you put it together quickly

[bubbafatz]

Hi,

makes alot of sense and well explained. It answers alot of the questions I had. It does seem that there is alot of work to be done, from finding the property, turning detective to contact the owner, seeing if they want to sell, then trying to get a very low price (50% off in your example) then title check, finding your buyer. It sounds like it would take weeks todo. But very little risk, I like that part. Thanks for sharing. Appreciated.

[localmentor]

You've posted several comments on my videos and you come across very confrontational, whether you mean to or not. Wholesaling like all business is about relationships. If you focus on building relationships with buyers you will find that selling your deals gets easier and easier.

If you can't communicate well and don't have a good relationship or if people flat out don't like you, they won't do business with you.

My buyers deal with me because they know I have THEIR interests at heart....

[localmentor]

...not just a big paycheck for myself.

[warmerup]

Renegotiating is that part I may still be willing to learn. My last seller just backed out. "NOT selling anymore"

[localmentor]

Title companies do charge for closings. Call one locally for fees. some states also have transfer taxes/fees. The title co. can give you an idea of what it costs in your area. If you are wholesaling, then you don't pay any fees if assigning, if double closing you can dump them one way buying and another way selling, but they are there.

[Liz2000a]

This info is very helpful! Thank you! Does the title company charge a fee for doing this service? If so how much is the fee usually?

[localmentor]

I use a purchase and sale agreement with the seller and an assignment of contract form to assign to my buyer. I have all my forms included with my wholesaling course.

[jeremy1113]

what is the contract called that you tie the seller to. and what is the contract called where you sell to the buyer. and where can i get these?

[localmentor]

never had a deal I couldn't wholesale - key word is "deal". If you have a buyers list and know what buyers will pay and how quick they can close, you'll never have a problem getting out of a deal.

IF you goof up, you need an 'exit' on your contract - "subject to...." something then you can exit, BUT, I'd renegotiate first, if you haven't sold it, you should have at least gotten offers on what you COULD get for it, so go back, renegotiate and get it for a price you can wholesale.

[space10]

Hi Mike! Terrific video, although I do have a question. Have you ever been in a situation where you are assigned a house but no one on your buyers list takes the house? What do you do in that situation since you are already under contract?

[orfla]

great information

[orfla]

vey

[localmentor]

that's the basics of the 'steps'. Easy? Depends on your definition - it was hard for me to figure out all the details, but once you get it, yes, it does seem easy.

Most of my mentoring clients are in CO, but I've trained investors in many states. Folks like someone close, but the fundamentals work anywhere.

[want2wholesale]

How do I join your mentoring? Do you sell a course? have any dvd's or cd's?

[templeinvesting]

Really? Is it that easy? Why do some make it seem complicated. Awesome explanation! Thanks! Do you only do local Colorado mentoring?

[noelkhuu]

This video is awesome Mike. I hope I'll be able to make enough money with this information so that I can join your Platinum Mentoring Program.

[localmentor]

most states require some type of "consideration" to bind the contract. State Approved agreements typically expect an earnest money check - most of my wholesales I do I find by direct marketing, so I have sellers calling me. In this case I use my own agreement and give a promissory note.

[joshlin4121]

my question would be once you make a deal with the seller do you give him or her an earnest money deposit?. Cause most real estate purchase contracts require that deposit at signing. I don't know unless I missed something

[joepbeats]

Thanks for the instruction Mike!

[txagent32]

Finally someone who shows you where to begin, step #1, rather than teaching in circles about how wholesaling works. This guy is awesome. Thanks for sharing your knowledge!

[georgelink1]

Another great video - keep them coming!

[mrodriguez9339]

love the video, very informative,clear and to the point, understandable, especially for myself who is JUST starting I've been reading and reading, and watching videos and I'm finally ready for my "hands on". I actually drove around and found three properties. I was excited to actually be "doing" something. I took pics and came home, looked up some comps. Now I'm going to create a buyer's list. Great Idea on calling bandit signs to find out what they're looking for. love the video.THANKS!!!!

[Xabbo718]

It did help alot,very informative,thanks