When should show my investor my assignment fee agreement, at the begining of the transaction or a f ew days before closing

Question

Hell BP Nation , I have 2 deals pending from wholesaling. My question is when should I disclose my assignment fee to my buyers , immediately or  a few day before closing ( i feel if I wait that late they could back out) if my fee exceeds 10k should I double close? Thanks in advance for your help

Ned Carey · Answer

You are NOT selling a house. You are selling a contract. How can you possibly do that without

A) Showing them the contract they are buying and

B) Having them sign the agreement to buy the contract

Jeremy Jones · Answer

I agree with @Christian Marin's comments, as a buyer of assignment deals I appreciate being informed of the exact parameters of the deal upfront (even before running numbers and evaluating the prospective property if possible).

I always feel appreciate to get a new deal, and want the agent who brings me the deal to make a nice payout!  I feel a little strange when the parameters of the deal are cloaked in obscure language, and less desire to work with that agent again.  Transparent communication from the beginning, and throughout the transaction, gives me the sense of wanting to work with that person again.

Christian Marin · Answer

I disclose my assignment fee to the buyer on the contract when they sign it. I feel that being upfront and disclose everything will give you better relationships then hiding things from buyer's. If I can assign the contract I will always assign it because it saves my buyer closing cost compared to a double closing. If I'm making a $10,000 assignment fee on my wholesale deal then I expect my buyer to be making at least $50K or more. At that point they are happy and I get paid for bringing them a great deal. If they are only making $20,000 and I'm making $10,000 thats where you start having problems.

RJ Reynolds · Answer

I am impressed.. I'm relatively new to the world of wholesaling and didn't realize that this type of spread was even possible. You are opening my eyes to a new world.

Ed Allen · Answer

Thanks Brian:

You really gave 80 /20 of your profit?  Way to pay it forward. Thanks you for your input.

Brian P. · Answer

If the buyer has an objection to how much your making, ask him are you willing to take less profit on your end so I can raise my price to you when my profit is not going to  be as much as I normally get or want and your profit is going to be normal or better? Don't let them answer!!! Say of course not, Your entitled to make what you should make for your time, money, and effort. If I offer you a hundred dollar bill for $60 should it matter to you whether I paid $59 for it or paid $30 for it? No it shouldn't, your concern should be are you paying a really fair price of $60, and not if I am making $1 or $30, greedy people will want a chunk of the $30, but never offer to give me more then the $1 when that is what I'm making. They are happy to pick my pocket when it is full of money but will never put any money into my pocket when it is empty. If your a greedy person let me know and I will take you off my list of people to have a shot at properties I have managed to get at a very good price so you won't have to worry about me making money you feel should be in your pocket.

Sound harsh, well I don't want to deal with greedy people and have used that exact response about half a dozen times in my life and they continued to buy from me without any more BS. Of course these were investors and not a seller who was about to have a stroke when they saw the amount. In most cases I could see their point and they could use the money and I was not expecting the big windfall and that is what I would tell them. I would say Mr. Seller, I never expected this to happen but I got lucky in this instance, and made $100, I was hoping to make e.g. $10 for my time, money,and effort in this deal so this was totally unexpected and to be fair I think I should get my $10 and then we should split the bonus $90 equally, does that sound fair to you?

The answer was yes except for one time the old lady said well how about you get twice what you were expecting and I get the difference? That cracked me up and I said ok you win, I'll take one third and you take two thirds of the difference. She hung me out to dry for a few minutes and finally said ok I'll take it, but I think it should be 80/20. I really liked this old broad and that is often what I would call her and she would chuckle. So my response was ok you old broad, you win, you know I can't resist your charm, 80/20 it is. We became good friends and about every 3 months she would call and say it is time for you to take this old broad to lunch.

I never liked double closes because I didn't want to be on title for even a few seconds if I didn't have to be, but that is another discussion.

Ed Allen · Answer

Thank you BP Nation. I feel upfront disclosure is best, thanks for the encouragement to stay on the right path. Maybe some big pay days require double closing but I hope to have that problem soon enough. Thanks again for all your post

Mindy Jensen · Answer

I have never worked with a wholesaler, but would not be opposed. I would want to know all the fees upfront, so I could decide if it was a good deal for me. If they know you are a wholesaler, they will also know you need to make money, too so the fee shouldn't scare them.

When should show my investor my assignment fee agreement, at the begining of the transaction or a f ew days before closing

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