Newbie Wholesale Question

[Sierra Potts]

I have been wanting to get into wholesaling. After looking into it with many youtube videos, etc. I feel like I have a pretty good grasp on the process but one thing is confusing. So lets say I find a motivated seller and a cash buyer. I have the seller's home under contract and the purchase and sale agreement signed. When I present it to the cash buyer, what is stopping them from contacting the seller directly and cutting me out of the deal as the middle man?? Is there anything I can put in place to protect myself from that? Also, is it un ethical to not give the cash buyer the name of the seller or other information to prevent this from happening? 

Any responses appreciated. Have not done any deals yet but still working on the learning process and want to begin very soon. 

Thanks!

[Demetria Sanchez]

Hi @Sierra Potts

Welcome to wholesaling. The information I can provide is based on my personal experience from the deals I have dealt with.

My first question is , what is your exit strategy? Where you assigning the contract or double closing?

If you’re double closing doing a A to B , B to C transaction the cash buyer won’t know anything about the original seller.

If you are assigning a contract , you’re assigning your equitable interest in the property. Really, the cash buyer doesn’t have to know much about the home seller as the transaction will be done through you. However, if you are assigning the contract you it would be best to inform the home seller so they are aware that you won’t be financing the deal. A good way of doing this is to make sure in your purchase agreement you include that your company and/or a financial partner will be purchasing the property.

Also, make sure to include contingencies.

I can understand your concern for not wanting to be cut out the deal , put as long as you strategize your game plan and exit strategy you should be fine.

Hope this information helped.