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The last step in profiting from flipping a wholesale property is closing the title.
In that process, the title of the property is transferred successfully to a new owner.
But it is not as simple as I made that sound.
However, there are a few 3 tips I want to share with you as inspired by the question below to make it as smooth as possible.
Wholesale Property Profit Tip #1 - Legalities
The title and/or closing agent or attorney is paid to worry about that part of the transaction.
So do the best you can to not involve yourself in that head ache.
Once the contracts are executed, your job with legal issues are basically done.
Wholesale Property Profit Tip #2 - Funding
Even though you’ve managed to get the contracts signed, there is one more due diligence before submitting them to the closing agents.
As a wholesaler who is responsible for disposing of the contract, you have to pre-qualify the buyer.
Because wholesaling a property is also about assigning the equitable interest in the contract to an able and willing buyer.
Essentially, you want to make sure that your buyer has the funding resources to finance the deal.
A proof of fund is good enough to submit the contract to start title work but you need a little more to clear the deal for closing.
Commitment letter from the funding source is key.
If it is a straight cash buyer, then you are left with no choice other than the next.
Wholesale Property Profit Tip #3 - EMDs (Refundable or Nah)
Your sales contract on the disposition side B-C needs to be accompanied by a $3,000 non refundable earnest money deposit (EMD).
This is especially true when dealing with a cash buyer; a minimum of $2,500.
That money represents a commitment to close and if the buyer pulls out, you get to keep the deposit.
No ‘ifs and ‘buts’.
Keep it simple. The wholesale property venture is a business where you must protect your resources; #1 is your time.
Below is a question for us to address with this lesson...
“Hey.
I need some feedback.
I have a deal that’s been in probate for 4 months now.
I’ve had a buyer the whole period who put a $2,500 EMD (Earnest Money Deposit) down and the deal is about to close.
The buyer ghosted me for the last 2 weeks.
Finally, I got in touch with him and he says he doesn’t think he’s going to go forward because of Covid-19; the pandemic
So should I return the EMD or not???”
Enjoy the video.
https://myempirepro.com/blog/wholesale-property
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ABOUT YOUR HOST ::::|
Ola "Tux" Abitogun is the Creator of myEmpirePRO and author of Smart Real Estate Wholesaling. He became a FULL TIME entrepreneur in October 2006.
He is a computer engineer and an engineering management graduate from New Jersey Institute of Technology; (NJIT) class of 2004/5. He was born in Dallas Texas and raised in Nigeria by his Nigerian parents. He considers himself a proud Nigerian American.
Today, he is a marketing addict, trainer, marketing and business consultant, real estate investor and all around serial entrepreneur. Most importantly, he is husband and a father. The professional work he is mostly proud of is personally helping 1,000+ entrepreneurs around the world reach greater heights in their careers.
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