Wholesaling Properties: Only Waive Inspection Contingencies When…
When is the only time real estate investors wholesaling properties should consider waiving home inspection contingencies?
Experienced investors will tell you whether buying a residence, for fixing and flipping or wholesaling the only time you should ever be willing to waive your right to inspect or allow an inspection contingency to be removed from a purchase contract is when you can comfortably and happily afford to fork out for an infinite amount of remedial work or walk away from your entire investment.
The one exception to this may be those that are solely focused on wholesaling properties in the form of flipping real estate contracts and taking assignment fees and will never hold title to them. Even then you have to be willing to walk away from your deposit money and burn bridges.
Knowing how to spot repair issues isn’t the only consideration, and no matter how long in the business, a two minute walkthrough won’t tell you everything. Today sellers are working extra hard to hide all kinds of problems. Complete rewiring or plumbing or septic issues can be expensive but they don’t come anywhere near the cost and hassle that needing a new roof or a failing foundation brings. These are only some of the potential physical issues you could face. If you start skimping on due diligence or skipping it altogether you are likely to find major title flaws popping up too.
These pitfalls don’t just mean bleeding big dollar amounts; they can prevent a home from being resold at all. Even if you could pawn it off on someone else the hit to your reputation could be fatal too.
The last thing you want as a wholesaler is to be stuck with a property you can’t move. Regardless of paying cash or financing them, it can bring you down in a flash. Just imagine you get stuck with a handful of these at one time. It happens and has sunk many investors, even multimillionaires. When this happens you won’t just be kicking yourself for missing out on profits, you could easily lose it all; house, car and Rolex.
Real estate wholesalers being tempted to waive contingencies due to trouble getting offers accepted have several other options open to them. For a start don’t ask for repair money. Write ‘as-is’ offers with the right to inspect (and cancel). If still facing tough competition, look to different price ranges, property types and even locations.
Click the Join Now Button Below to Get Your 30 Day Risk Free Trial of Flip2Freedom Academy