Dealing with Wholesaler - Should I review contract with lawyer?

[Warren Kong]

Hi BP,

I've been looking doing the BRRRR strategy on my first property in Kansas City, MO with a wholesaler and I am fairly interested in moving forward with it.

Just a quick question, when you're not dealing with a buyer's agent, do you typically hire a lawyer to review the contract documents to make sure that you are covered properly?

The way that I understand the process is:

• wholesaler drafts contract with contingencies such as inspection, title search
• I review and sign - with a lawyer? 
• property goes to title search and if all works out, I wire the money and the deed becomes mine.

[Kim Tucker]

So guys and gals I am here to tell you that a wholesaler is a real estate investor that 100% represents their own interests and they are not a buyers agent in any way shape or form.

I want to make sure everyone following gets this as I get investor buyers who sign up on my list and then wonder why I have not found them a deal right away.  My response is always I wholesale houses.  I market for good deals, get them under contract (in my case buy them) and then market them out to my buyer's list.  Whoever has the best offer price that closes the fastest gets the deal.  That may be you that may be one of 100 or 1000 other people.

So if you are buying from a local wholesaler, by all means, have someone who represents YOU - go look at the house, review the contract to make sure the numbers work and the contract works for you.  That could be you if you know how to read a contract and review a house or you may need to hire an attorney.

If the wholesaler is not buying and then reselling to you but rather assigning their contract, you would be purchasing their position in the contract they already have.  I would advise to review their contract before you sign the assignment as you have to close and follow the terms they negotiated. 

And despite what some brokers will allow in their specific office, in Kansas and Missouri real estate agents and brokers can wholesale if they want to as long as they follow the law and their broker will allow it.