need a plan B on my first wholesale deal - Posted by flipper124

import · August 14, 2009, 10:47pm

Posted by Jeff on August 17, 2009 at 24:10:17:

Its all about what your assignment contract states.
are there any clauses in it?
Go ahead and sign up your #2 buyer NOW as a back up.
Still if your taking contract to the title co. so they can get things started you will need to ride them HARD to get them to close by the 25th. and if there are any liens or problems with the title - forget it. I know you may need to finish this deal up now like yesterday for your own reasons but just keep in mind the things that have to take place after you “sell it”. Good Luck !

Another thought is if your #1 buyer backs out or you back out, you now have 3 other buyers that you could get a small bidding opportunity going on and make a few extra $$.
If you get offers to fast with no one trying to negotiate then your price is too low.

import · August 14, 2009, 10:47pm

need a plan B on my first wholesale deal - Posted by flipper124

Posted by flipper124 on August 14, 2009 at 22:47:14:

I just signed up my first deal on Wed. and sold it the same day. It all happened so fast that I got a deposit but didn’t verify proof of funds before I signed the assignment contract (DUMB I know!)

I received the proof of funds the next day. It was a bank statment in someone elses name. I spoke with my buyer and he said He can close as soon as he has proof of clear title so I went with it not knowing what else to do.

So today I talk with him and he said his partner is out of town for the next week or so and we’ll talk about setting up the closing on Monday after I have the seller sign a paper on the closing instructions (never heard of that before). I reminded him that this needs to close by the 25th a week from Tuesday. The seller is having a procedure on the 26th so we can’t get an extention.

I’m starting to wonder if this guy is really going to close. What can I do for a plan B? I have 4 cash buyers that said to call them if it falls through with my current buyer. Should I push for a closing this week so I have time to bring in a new buyer if this guy backs out?

Do I have any options at all?

I have learned so many things on this deal that I’m not doing on the next deal!

Thanks so much for any help!

import · August 17, 2009, 6:53pm

Re: need a plan B on my first wholesale deal - Posted by Chad (MD)

Posted by Chad (MD) on August 17, 2009 at 18:53:35:

I have to admit I’ve never encountered this problem because all of my buyers have been serious so far.

Did you sign an assignment contract with your buyer? If so, it probably says your buyer agrees to close on or before the settlement date on your purchase contract with your seller. And it probably doesn’t say anything about requiring you to get your seller to sign anything.

I would tell the buyer you’re not getting your seller to sign anything, and if they are not willing to close on time you have other buyers lined up.

I would get another buyer and deposit ASAP.

import · August 15, 2009, 11:29am

Re: need a plan B on my first wholesale deal - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on August 15, 2009 at 11:29:57:

My idea of wholesaling is selling to a buyer who’s ready to close NOW. No excuses, no nit-picking the pimples and warts of the property. They should be prepared to perform once a deal is struck.

If your buyer never disclosed to you that his “partner” was really the one with the money, (if I didn’t know them from past experiences) I’d question them about that, because now I’m doing business with someone other than who I thought I was. Partner out of town? At what point was that discussed with you that this should become your problem? Flakey buyer.

Into solution: I’d begin lining up prospective buyers today, not Monday and tell them that you have a buyer now except that they have a performance problem.

Buyer #1 may or may not be telling you the truth, however wholesaling a property requires velocity, and that’s what is supposed to help justify the discount that you offer. A protracted transaction doesn’t fit with the business model if that wasn’t agreed upon up front.

Now you’re down to instincts, and if your new to the business, you’re at a disadvantage. However, you’re posting here because your current instincts are that buyer #1 is playing you and wasting your time. You may be right.

At some point, if you’re not careful, you’ll become madder at yourself for going along with this guy when all the signs where there not to. That’s not a good felling. At minimum this guy is frustrating to work with; and he may be stalling while he is trying to find a secondary buyer behind your back! So, my vote is to tell this buyer that your deal was with him, not partner, and the deal is off unless he closes on or before XX, not the later date he has now conjured up.

Sometimes you just have to throw the baby out with the bath water.

import · August 15, 2009, 10:34am

Re: need a plan B on my first wholesale deal - Posted by Bill H

Posted by Bill H on August 15, 2009 at 10:34:01:

Had a deal recently like this:

Buyer #1…I’d like to look at neighborhood a bit more.

Buyer #2…I need to sell my house before I can close.

Buyer #3…Let’s go, I’ll have my bank contact you in the morning.

GUESS who got the house.

Go with what Rick is telling you.

Good Luck,
Bill H

import · August 15, 2009, 10:20am

Re: need a plan B on my first wholesale deal - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on August 15, 2009 at 10:20:43:

My idea of wholesaling is selling to a buyer who’s ready to close NOW. No excuses, no nit-picking the pimples and warts of the property. They should be prepared to perform once a deal is struck.

If your buyer never disclosed to you that his “partner” was really the one with the money, (if I didn’t know them from past experiences) I’d question them about that, because now I’m doing business with someone other than who I thought I was. Partner out of town? At what point was that discussed with you that this should become your problem? Flakey buyer.

Into solution: I’d begin lining up prospective buyers today, not Monday and tell them that you have a buyer now except that they have a performance problem.

Buyer #1 may or may not be telling you the truth, however wholesaling a property requires velocity, and that’s what is supposed to help justify the discount that you offer. A protracted transaction doesn’t fit with the business model if that wasn’t agreed upon up front.

Now you’re down to instincts, and if your new to the business, you’re at a disadvantage. However, you’re posting here because your current instincts are that buyer #1 is playing you and wasting your time. You may be right.

At some point, if you’re not careful, you’ll become madder at yourself for going along with this guy when all the signs where there not to. That’s not a good felling. At minimum this guy is frustrating to work with; and he may be stalling while he is trying to find a secondary buyer behind your back! So, my vote is to tell this buyer that your deal was with him, not partner, and the deal is off unless he closes on or before XX, not the later date he has now conjured up.

Sometimes you just have to throw the baby out with the bath water.

import · August 15, 2009, 9:46pm

Re: need a plan B on my first wholesale deal - Posted by Flipper124

Posted by Flipper124 on August 15, 2009 at 21:46:32:

Rick- thank you so much for your advice! I will do just what you
suggested!!

Thank you