First Time Trying To Wholesale A Home And Not Sure What To Do

[Crystal Oneill]

Hello - I am trying to do my first wholesale deal.  The property is in Indianapolis which is where I live and the owner lives in California.  We agreed on a price, so I filled out and sent him the contract and he is pushing back on almost everything.  For example:

1.  He wants me to deposit the whole purchase price at the title company and he wants the terms to say that he gets to keep 50% of it if the deal falls through.

2.  He totally wants me to remove the portion about the property being "free from hazardous substances, and from violation of zoning, environmental, building, health or other govt codes or ordinances and that there is no material or other known defects or facts regarding the property that would adversely affect the value of the property."

3.  He wants me to totally remove the portions that say the "Buyer upon giving notice enter the property and inspect, repair, market and show to third parties prior to closing date."

4..  He wants me to remove the portion about Contingency which says the contract is "contingent upon the buyer having the right to inspect all of the property, engage professional inspectors to determine the structure and condition and that the report must be satisfactory to buyer or all deposit money will be immediately refunded and all contract obligations considered void and the inspection shall be conducted within 30 working days from acceptance of the contract."

5.  He wants the words in the Closing section to actually name a title company (which i have no idea what that is at this point) and to remove "Subject to a 90 day period in which the buyer/seller shall be permitted to clear any title problems"

6.  He wants me to remove "Contract subject to an acceptable appraisal", "Buyer may assign or otherwise transfer any of the buyers' rights, title and interest in and to this agreement to a third party without the seller's consent" (Even though he didn't say for me to remove the line that lists my name as the buyer and then says "and/or assigns as buyer")and "Buyer may place signs and show property immediately upon acceptance of this contract by both parties". 

7.  He wants me to remove the item "Time is of the essence with this agreement" stating that both parties will diligently pursue the completion of the transaction.

 Is this normal for a seller to be this picky about a contract ?  Based on this information, should I just forget about this deal, especially since I have no experience at all yet?  It seems like he wants me to remove some pretty important things plus the fact that I can't put the whole purchase price down as a deposit now.  

I would appreciate anyone's thoughts on this.  Thanks!

[Jerryll Noorden]

OK listen very carefully.

Monkey has the mic.

The Absolute common mistake of wholesalers, especially new ones, they are too desperate/eager (use whatever term you want here) to make a deal. This desperation is very understandable:

Wholesalers feel like they are doing something wrong (they say they will buy their house without ANY intention of buying said house) and that guilt shows clearly (often in the form of taking a defensive stance).

I know you won't want to hear this and I am also admitting I am assuming some things here. But I assume you did not tell the seller you are a wholesaler.

Look seriously, you will NEVER make it as a wholesaler telling sellers "I will buy your house" when you are just not going to buy it. It is wrong, dishonest and poor choice to build a business on.

If you just wanted a new laptop and you just need a quick 3K to buy it and never touch wholesaling again, I would still give you lip about it, but sure I can see logic in that. You will literally make a deal or 2 every year and you will forever struggle, and you will have a life of a LOT of drama, and legal issues. 

This is what you do, seriously. First, don't even think about what anyone said above me, not that they are wrong,  and most have solid advice, but the tips given start of from a completely erroneous perspective. The advice given is how to deal with your current situation (founded on dishonest false promises of buying that house, when you simply are not).  The issue with this is that you do not need to "solve" your current situation. You need to walk away from it period. Undo and start over.

These are the steps I would advise you to take:

1) Tell the seller, to take a hike. Drop this deal, take 3 steps back and reevaluate your business model, strategy and systems.

2) Before you dive into wholesaling, make sure you have a strategy. Have an angle. And for Pete's sake: Be honest

3) NEVER be defensive. Don't bend over for anyone. Keep this in mind, HE/SHE is the one that NEEDS to sell. You do not need to buy anything (from him/her). There are plenty of deals out there. 

4) Do not focus on one specific deal. Focus on constantly having a filled pipeline of deals. If one is too difficult or unreasonable, give him your card and say: "Yo dude, when you come back to earth and are ready to sell that damn house give me a call pumpkin, Good luck Pebbles" and move to the next deal in the pipeline. (For this you need a website).

Honestly I am kind of shocked and disappointed no one above me gave any advice along the lines of "You need to be honest and upfront with sellers". That is the NUMBER ONE rule of successful wholesaling. Seriously NO WONDER everyone SUCKS at wholesaling and then everyone convinces themselves and each other "ohh wholesaling is hard, only 3% make it". What ever!!

Seriously. Stop! Just stop. 

Walk away from this deal. This is already such an elaborate mess it simply is not worth it.

You are a beginner and I applaud you for taking action. But this is not the right way to do it. Confidence is key (in ANY business). YOU are the authority.  YOU are the one that provides the solution to HIS/HER problem.

I know this message was harsh, but you need to take my reply very seriously and take it from someone that knows a thing or 2 about actual wholesaling.

Read this:

https://www.biggerpockets.com/blogs/7786/73445-how-i-got-my-first-paycheck-wholesaling-in-3-months