Make offers and get your buyer to pay your escrow

There is a way to lock in your Short Sales and REO flips with absolutely no money out of your pocket. By using your buyer's money for your escrow deposit you are securing his interest and using zero of your own money to secure the deal.

In order for this to work you must have active buyers on your list not just "Tire Kickers." What's a "Tire Kicker" you ask? Did you ever go to a car lot and the guy next to you is walking around kicking all the tires acting like he knows what he is looking at? He really knows nothing about cars but wants to make the car sales man think he does so he kicks the tires as if he is checking for something. The same goes for your buyer's list. You have your serious buyers who get in and start the car up, look under the hood and them make an offer and then you have the guy who calls you as if he is interested but never actually buys a property. However you still want to keep your "Tire Kickers" informed when you have a deal because they are more than likely wholesalers who know buyers. So if you send them a property they will most likely present the property to their buyer with the hope of getting a referral fee. So you want to keep the tire kickers around!

When you put in your offer on a property put $1,000 in the escrow section of the contract. It would usually state "due upon signing the contract".

As soon as you get an offer accepted on a property immediately begin calling your buyers letting them know about the property. I have my agent take my partners through the property before I sign the contracts with the bank. (this is why it is a good idea to have an agent on your team).

If one of your buyers is interested have them sign a purchase agreement with you and give you an escrow deposit of $1,000. Now this purchase agreement is between you and the buyer, not you and the bank. This agreement will have the total purchase price that the buyer is buying the property for from you not the price you are offering the bank.

You will then give the bank the $1,000 that you received from the buyer and sign the contracts.

The key to this process is your buyers list. I am a firm believer in calling my buyers as opposed to just sending an email or posting in classifieds. Calling your buyers builds your relationship with them.

Now this process will be difficult if you do not have an active buyers list. In this case I recommend giving an escrow of $500.00 ONLY if you think the property is a GREAT deal and you can move it in the time that you have until the closing date. The deposit is non refundable so make sure that you have run your numbers and calculated your costs and profit on the property before you commit to signing the contract. A good wholesale deal is at least %30 below the ARV (Average retail value) of the property after you have deducted repair costs, your fee and holding costs.

I recommend that you continue to build your buyers list daily. Here are some articles that I wrote that will help you build your buyers list.

Tips to build your buyers list

Find buyers in For Rent adds

Written by Carol Stinson. All rights reserved.

Assigning a property to another buyer

Assigning A Contract

One way to get out of a contract is what's called assignment, which
is finding someone else to take over your obligations. Because contract
rights are considered property, they can be transferred to others just
like a piece of property such as a home or car.

Let's say you have a contract to purchase a number of items each month from a dealer, at a certain price. The contract runs for a year. You then decided the product is no longer working out for you, and you'd rather not buy any more. As long as your contract allows it, and it is
legal to assign the contract , you can just find someone else who wants to buy the same number of items each month and "assign" your rights and obligations under the contract to him.

Most contracts permit an assignment as long as the other party to the contract approves the assignment. And many contracts require the other party to approve of an assignment as long as the assignment is "reasonable," meaning that the assignment won't jeopardize the security
of the other party or increase the other party's risks."

So in conclusion, what I have shared with you is that once you have a property locked up, all rights of the contract is considered "property" and therefore under your control. Therefore you reserve the right to do what you want with it. Assigning your right to purchase the property
once it is locked up is your right. (lawyers.com)

“When we have the right to buy (purchase & sale agreement from the seller to us), we have the right to sell” Attorney William Bronchick – real estate lawyer and also investor. Make sure you put an option to assign on your contract. Options can be sold or exercised.

When you sign a purchase agreement with a seller simply put and/or assign next to your name. This will enable you to assign the contract to another buyer.

Written by Carol Stinson. All rights reserved.