Wholesaling real estate is not a walk in the park.  Due to the constraints of the economy and the bad rap that bogus investors have given the business, it is getting harder and harder for an end buyer to get financed. 

When a wholesaler gets a property under contract, they normally sell the property to an end buyer by assigning the contract or receiving a fee from the end buyer to purchase directly from the seller.  But in some situations, such as a short sale, the wholesaler must purchase the property first in order to fulfill the arrangements made with the foreclosing lender.  This simultaneous closing transaction is structured something like this: Party A (lender/seller) sells to Party B (wholesaler), who in turn sells to Party C (end buyer).  Party B can either bring in 1 day funds to close the transaction with the lender or disclose everything to Party C and inform them that their funds will be used to closed the initial transaction, Party A to Party B.  This IS NOT illegal as long as it is disclosed in the form of an addendum and Party C is using all cash or hard money.  It is difficult if Party C is getting financed.  Though there are a couple of lenders that would fund this type of transaction.

A question a number of wholesalers ask “who is getting the end loans to the C buyers done with no hassles and no vesting requirements?”  Quicken loans were lending to these type of transactions but withdrew from the market this week and will not close any more “C” loans at this time.  But here are two more to add to your list:

These lenders are of course very busy.  If you need to speak with them, please understand their time constraints and make it brief.  If you have any lenders that you’d like us to add to our list, please let us know. 

You can also seek out hard money or private funds for a temporary loan of 6 – 9 months.  This will give you time to make the repairs and refinance.  It is much easier to refinance then it is to get a loan to make a purchase. 

Not only is it hard to find lenders, but it can be a challenge to find a closing agent.  We have a national closing agent that closes deals nationwide.  They are a small company and stay busy.  If you need them to close on your deal, please allow them 2 weeks plus to schedule you in.

These wholesale real estate tips should make wholesalers jobs much easier in these challenging times.  Remember to always disclose everything to the buyer and seller of each transaction.  Failure to disclose all aspects of the deal can result in fraud and possible criminal actions taken out against you.  This is a very serious matter.  Keep your nose clean and have fun investing in real estate.