91

Wholesaling is basically the act of standing in at an auction and "buying" a home on behalf of a yet-to-be-determined buyer. You put a down payment on the purchase, and then, you go out, find that actual buyer, and basically get them to close the sale - but at a higher price than you bid for it, so you can pocket the difference as profit. It works because ...


47

I grew up working in auction houses in a rural area - family owned on most of them. I was young - so I was not the auctioneer, nor the management staff. But I did see how things work and I did help sell - mobile homes, regular homes, cars, kids toys, business liquidations, clothes, antiques, paintings, rugs, seasonal business leftovers - whatever. I met ...


30

It depends on the circumstances of the sale, the jurisdiction, and the auctioneer. It also depends somewhat on when or how the buyer backs out. Skip to the very bottom if you just want an answer to the exact scenario you've presented in your question. Given your mention of real estate, my answer focuses on real estate auctions specifically, and is written ...


23

Actually, mortgages do not "compound" at all. Compounding means that interest is charged on top of past interest, which is not true for mortgages. Conforming mortgages in the US use simple interest, where interest is calculated based on the principal amount remaining, and late/unpaid interest is not added to the principal (unlike a credit card, for example). ...


18

As mentioned in the comments, the book "Rich Dad Poor Dad" by Robert Kiyosaki is not undisputed among experts. Its advise should be taken with a grain of salt. When you want to participate in a real estate auction, you usually have to deliver some proof that you actually have the liquid capital required to pay for the object. Either because you have it in ...


14

As @dwizum points out in their answer it will depend on the circumstance of the sale and the jurisdiction. Aside from the down payment, the auctioneer will typically require evidence that you have sufficient assets to cover your full bid. If you don't come through with the payment, they can come after those assets. If the auctioneer thinks it's worth ...


11

This answer is here more to support what others have already said, so I will skip the part where I answer the question and go right to the part they don't tell you about. Buying a house at auction is a lot harder to pull off than you might think. This is a business for a lot of people, especially since reality TV has convinced people it's just so easy and ...


6

The way this works, i.e. cash financing where no mortgage is involved in the beginning, is that you provide so called private money or hard money. This can essentially consist of your own money, someone else's money; such as friends, family or an investor who lends to you for high interests, usually for a short period of time. Another way of financing, ...


2

There is no clear answer in ROI. In fact, in terms of ROI, continuing to rent may win. In my location, in the US, it is hard to make the business case for rental properties. Even after purchasing a rental property for cash, it is hard to make a 6% ROI on one's investment. Once one plans on learning how to be a landlord, maintenance on the property, and ...


1

While your linked article doesn't use that term, I think this is talking about 'gerrymandered' zoning lots. This article shows one example lot: Crain’s Reveals Gerrymandered Zoning Lot (Or do an image search for "200 Amsterdam Ave".) Here, the legal lot includes a bunch of space that is unrelated to the building under construction, apparently in order to ...


1

Here's a small glimpse of the general overlay of this concept from a government land perspective: https://www.governmentauction.com/ViewUserDefinedPage.aspx?pn=FinanceLand Now, private organizations, banks, and the likes may have other arrangements that need to be met according to their own terms of service. But in the first statement from the government ...


1

The only reason you can calculate the PV of perpetual payments is because of the discount rate; although you have an infinite number of payments, the present value of each payment is decreasing, leading to the values summing to a finite total. If you have growing payments, then if the growth exceeds the discount rate, then overall the present value of each ...


1

This will be highly dependent on the actual content of the offer/counteroffer contracts, and what version, if any, the seller actually signed. Potential recourse could include absolutely nothing, a refund of any money paid alongside the initial offer, or a court order to execute the sale as agreed - or anything else, really. If your son is not happy just ...


1

Just to close this out with what was actually submitted in the estate inventory. First, in the state where the estate is, property tax assessment was an acceptable "fair market value" for the purposes of compiling an estate inventory and assigning a value to the asset. The house was valued at fair market value, which I did not base on the property tax ...


1

Today's (02/08/2020) New York Times has an article which addresses this question. The electronic version has the title More States Require Students to Learn about Money Matters. Author is Ann Carrns. The article states that as of now, 21 states require some sort of personal finance course for high school students to graduate, up from 17 states two years ...


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