Wholesaling W/mortgage's Involved
I have a deal going right now with an investor. I am bringing him properties, and he is interested in quite a few of them that I have brought him (8 to be exact....all owned by the same owner). Everything is beginning to take shape, and everything has been smooth so far. My question is: When we go to closing, how do I work out getting paid? I have an addendum attatched to the purchase agreements that were used stating that the seller receives "this" amount, and that I will receive a commission of "this" amount at close. Will this work...and does this protect myself?? The purchase agreements are written up for my prices of the house....meaning if I have it contracted at $32,000 - then the purchase agreements were written up at $36,000. Does that addendum protect me though....and will I just receive the remaning money after the seller receives what she wanted for it?? (from the title company...or something like that) I have no problem with anyone knowing how much I made on the sale....since they are all aware of what i'm making. Please advise...thanks! 
I am confused - what documents do you have? You have BUYER, SELLER, and WHOLESALER (that be you) - who is on the Purchase and Sales contract. Is the BUYER getting a mortgage?
I believe the typical arrangement is that WHOLESALER and SELLER are on the Purchase and Sales contract. Then an Assignment of Contract is written up with the BUYER and WHOLESALER.
Brenda
Your document sounds ok, though your description is a little confusing. I would recomend two things,
1) get yourself an attny find somebody who does a lot of real estate work. Most of them will do closings for $500, to $1,000 money well spent when you are a newbie
2) characterising your profit as a commission is probably a really bad idea. In most states only licensed realtors are allowed to recieve commissions from dealing in real estate
Thanks for the advice.
Most people I know use "CONSULTING FEE" for the wholesaler's fee.
Lori
[addsig]
Thanks a lot Lori! I will definitely put that
I do the same as you and I use the term "real estate services rendered" or "contract release fee". It shows up on the hud-1 settlement form.
Nate: Keep it simple!
Simply open up escrow as
an "Assignment". Have the escrow instructions signed by the seller. Then
contact your wholesale buyer and tell him you are ready to assign to him and need him to bring you a check for the
difference. Once he gives you a cashiers
check for the difference, you simply contact escrow and inform them you are
assigning the property. They will draw up an amendment. Tell the seller you are closing in your partners name for tax purposes. You are done! No need for a
double closing. Keep it simple. Some of the other ways posted above will work also, however the seller will see how much you are making on the HUD-1.
The sellers will sometimes have a problem with this.
Best Riches,
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."
[ Edited by JeffreyAdam on Date 04/10/2004 ][ Edited by JeffreyAdam on Date 04/10/2004 ]