While we’ve only covered the basics of wholesaling (and there are A LOT MORE ISSUES to understand), you’re well on your way to completing your first wholesale deal. The easiest way to wholesale is to just assign the contract. It’s clean and simple and doesn’t cost anything or require any other documents.

But, if you’re working with bank, like REO properties and short sales, they will not allow you to assign the REPC. Some sellers and agents also that won’t allow you to assign the contract because they may think it’s somehow fraudulent. Or, maybe you’re looking for more privacy in your transactions. Then you many want to consider using a disposable LLC or real estate trust.

When you assign a contract, the named buyer actually changes, so the bank and seller will see that at the closing table. But using a disposable LLC or trust as your initial buyer (on the initial REPC you sign with the seller) will allow you to pass on the right to buy the property WITHOUT changing the named buyer.

The process is similar. But first, you set up either an LLC that will be used just for this deal or a real estate trust. Next, you name that LLC or trust as the buyer on your REPC with the seller. Then, instead of assigning the contract from you to another buyer, you “sell” that LLC or trust to your final buyer. Once your buyer “owns” that LLC or trust, they have the right to buy the house because that LLC or trust IS the buyer on the REPC. Your assignment fee then become the “sales price” of that LLC or Trust and is listed on that form. The only thing that’s changed is who owns these entities, which is done behind the scenes.

You will, of course, need forms and the knowledge to create the LLC or trust plus the “sales” form that transfers the ownership to your final buyer. You will need to work with an attorney to create these for you and educate you on how to fill them out. I have all those forms and information on the REI Mastery U website, link below.

Because the transfer of purchasing rights is done behind the scenes and the named buyer doesn’t change, this helps the deal be cleaner and more private. You can even provide that “sales form” to your title company so that they can collect the entity sale price (your assignment fee) at closing. Really, once you understand the LLC and trust part, the deal look and behaves like any other wholesaling transaction.

Hopefully, you now know the basics of wholesaling. If you need more information, please check out our website!

Jeffrey S. Breglio, Esq.
Breglio Law Office and REI Mastery U
www.reimasteryu.com
jeff@bregliolaw.com
(801) 560-2180