Posted by michael on November 13, 2002 at 24:13:58:
The short answer is you don’t assign subject to deals. It is considered unethical to do so since your seller has no idea who your buyer is. You’ve agree to make their payments, not some other third party.
As one should close on their wholesale flips if their buyer flakes, are you prepared to stay liable on subject to assignments for years?
Wholesaling a “subject to”? - Posted by bkopp66
Posted by bkopp66 on November 11, 2002 at 14:53:21:
I’m just getting started in real estate investing and trying to wholesale a few properties to build up cash reserves as I have very little money to begin my investing career. I had a fixer under contract that I could not move but luckily I was able to get out of it by using the “repairs not to exceed…” contingency clause I had put in the contract. I’m in a hot market in Asheville, North Carolina where the average home goes for above 200K and there is tons of competition from the numerous investors here. What I have found is that the rehab investors here tend to have an “all for me, nothing for you” attitude with regard to investors that want to wholesale properties to them. Unless you can tie a property up for a ridiculously low price there is not much potential to make money wholesaling to them. I have begun to concentrate on nicer properties in decent areas where properties move relatively fast. If I can tie one up for 75-80% of their current market value I can probably sell to a retail buyer fairly quickly if it is priced below market value and/or I sell on favorable terms like providing some seller financing. I know that if I’m concentrating on nicer houses “subject to” is a method I should be using but I know very little about it. I know there is great profit potential with subject to down the line, but I need to build up my cash reserves first by wholesaling. Does anyone know of a course that covers the concept of wholesaling a property you have tied up subject to? Is wholesaling even possible with the properties that are typically able to be tied up subject to? What contingency clauses do any of you use to give yourself an out if you can’t locate a buyer? I appreciate any input anyone can provide.
Brennan Kopp