As I mentioned earlier we went through our options on House #21 and came to the conclusion that we had many good options, but wholesaling it was the highest on the list. We’ve bought eight houses in the last 6 weeks and really don’t want to have six retail properties all hit the market in a traditionally soft December/January. Especially with the “foreclosure moratorium” ending soon (I will make another post on that to share my thoughts).
Here are the steps we took to wholesale the house:
1. Put it under contract
This house had a lot of offers and was listed way low. We ended up getting it just over list price and we knew it was a decent deal.
2. Confirm Escrow is Open
In this market, I wanted to make sure our offer was for sure accepted before I started marketing it to people. This would prevent them from trying to contact the listing agent or go around me.
3. Call a Couple Local Investors from my Buyers List
The longer I have been doing this, the more of the players in our market I have been meeting. It seems like all the big guys know each other and have a good relationship. We all use the same insurance agents, appraisers, etc. So after making four phone calls and have a couple people look one of the people called and said he wholesaled it to an investor friend of his who wants to rent it out.
4. Open a Second Escrow (for the Sale)
We made a purchase agreement and sent it to my escrow officer. The bank picks the escrow company for the purchase transaction, but because I am the seller, I can dictate who does escrow on the sales transaction.
5. Close Purchase Escrow
I got all my escrow instructions. I made sure to buy a title insurance binder (it’s 10% additional fee). I have to close my escrow like a normal transaction. I do have to use my funds to close this transaction and I cannot use the buyers funds.
6. Close Second Escrow
My purchase escrow is set to close tomorrow, so I made sure the buyers money is in the sales escrow. I asked the escrow officer to use my title insurance binder from the purchase escrow, so it saves
7. Get the Check and be Done