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First Time Buyer-Real Estate Broker Commission?

Ryan,
You need to realize that the seller has already negotiated a listing contract with the listing agent and that contract most likely states that the seller will pay a commission of 6% to the listing agent. In addition, the contract probably also states that the listing agent will cooperate with other brokers and offer a buyer's agent 3% of the total 6% commission. To negotiate with your "buyer's agent" now is futile as the seller is paying the fee and has plugged that figure into the calculations of their price. Next time, before your agent has already shown you properties and done work on your behalf, negotiate what you are willing to have them receive before you go out looking. This way (if you both agreed on 2%) and you find a property where the seller's agent is offering 3% to the buyer's agent, you can use the reduced agent fee on your side of 1% to reduce the asking price during negotiations. Of course you can also negotiate to reduce the price on many other items as well. Knowing how to negotiate contracts is instrumental in any RE investing business.

Vacation home vs Investment Property

This would be a good topic for a CPA. IIRC, and if they've not changed the rules, you can rent for a max of 14 days per year and its still a vacation home. You can deduct the interest on a vacation home.

What's the best way to take a deposit on a wholesale deal?

If bank financing means a commercial loan versus a residential loan then you should be fine. Either way you need to make sure that you have your buyer double check with his lender to make sure that they will do assignments.

Looking for Mentor in Utah

Leland,
The more you network and meet other successful investors, the more you will learn and the better your chances of finding someone willing to help/work with you. Make the time to visit and become a member of multiple clubs.
Word of caution: do not fall prey to the many guru speakers that try to sell you over priced "boot camps" and "programs". There is much you can learn from talking with others and reading books. There is, however, many products and services out there that are worth the money and time, you must weed through the over-priced hype.

Assining or Double Close or Neither?

Originally posted by Alex Locklear

My question is, which is the better method to go and which is more accepted by lenders? Assigning a contract or having a double-closing?

Are you referring to when you are buying a property from a lender (REO) or to the buyer's lender when you are wholesaling a property?

If you are referring to REO's then Bakerpark is right on. Banks don't allow assignments, but he's off about dual closings. You normally don't need $ to double close. You can double close any property. I would agree with Patrice that double closings can be a mess if your attorney or title company doesn't know what they are doing, but this statement is true for ALL transactions. My advice for ANY transaction would be to find an investor friendly title company that DOES know what they are doing.

I also disagree with Jason here. You can make money buying from lenders just like buying from homeowners. Wholesaling is not about WHO you BUY properties from. Its about WHO you SELL them to (i.e. other investors, hence "wholesaling"). Who cares who you are buying them from? Figure your numbers the same no matter who the seller is. Yes, motivated homeowners are your biggest focus, but if you aren't looking at other avenues you're leaving deals on the table.

Assignments and double closings each have their own advantages and disadvantages. Assignments are simpler and maximize your profit, but can not be done with REO's or short sales. The buyer and seller will also know exactly how much you are making with an assignment.

Now with double closings you will have to pay closing costs so your profit is decreased. Your profit will NOT be disclosed to the buyer or the seller, and most of the time neither party even knows that you are double closing.

Now if your question is in reference to the buyer's lender when you are wholesaling a property then the main factor is that you need to be wholesaling to cash or cash equivalent buyers. Cash equivalent is hard money, commercial loans, or commercial lines of credit. This is because conventional lenders won't roll assignments into a loan and only a select few will overlook seasoning requirements with a double close.

Oh and, no, there aren't really any simpler ways to wholesale.

RE club meeting in Anaheim, CA and LA, CA

Do not miss "The Bare Truth in RE Investing" meeting in Anaheim, CA on September 10 (and every 2nd Wednesday of the month) as well as the Grand opening in Los Angeles the following day, Thursday Sept. 11 (& every 2nd Thursday). Contact Rosie or myself for details on times and exact locations.
You may search "Rosie Nieto" right here on BP for here profile and contact info. :D

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