Co-Wholesaling

[Neomi Riley]

A wholesaler has reached out to me with an offer to co-wholesale...anyone familiar with this kind of offer and should I be skeptical?  Thanks.

Neomi

[Mitch Messer]

Hi Neomi,

No need to be skeptical, necessarily. Depends on what they are suggesting and on who controls the deal. 

When we propose a co-wholesaling arrangement, we typically (as the primary wholesaler) have a contract with the seller. We'll work with another wholesaler (the secondary) who brings us a buyer. If the deal gets done, we'll split the wholesale fee (often 50/50) and everyone is happy. We're in control, so we can ensure things go as expected. 

The problems can arise when you are the secondary and the primary gets greedy and shortsighted and tries to stiff you on the fee. Without the direct relationship with the seller, you're at the mercy of the primary. 

So, if your primary is reputable and other wholesalers can vouch for them honoring the co-wholesaling agreement, you should be fine. If not, I'd pass.

Good luck!