My second wholesale where almost everything that could go wrong, did go wrong. Here are the lessons that I learned that I hope to share with other investors and wholesalers!

From the beginning of this deal to the end, I exercised full transparency with both my Assignee and the Seller about that I intended to make a profit assigning this deal, and I even disclosed how much. Lesson Learned: transparency can be a double edged sword. Some people appreciate it, others will use it against you.

What made you interested in investing in this type of deal?

This fourplex would have made a great buy and hold for me. Four units, $2200 monthly cash flow potential, and less than $10k of rehab work, this deal would have been a slam dunk either way. I chose to wholesale based on the fact I am moving to a different military base all the way across the country, where I'll be buying a primary residence in Tacoma, WA ($$$$). The extra cash on hand definitely made wholesaling this deal the better option!

How did you find this deal and how did you negotiate it?

This fourplex was next door to my own fourplex. I had contacted the owner prior to learn about the neighborhood and see how we could tag team the investment. I got a lawn care company that could cut both our sides at a discount, and that opened a door to negotiations. We exchanged about 3 sets of offer/counter offers until we came to agreement: I would wholesale his property to a cash buyer with no inspections. I believe he was motivated to sell because he was evicting a bad tenant.

How did you finance this deal?

I paid $1000 of personal earnest money to the escrow account with an assignment contingency. If I could not find a suitable assignee, I would have closed all cash for this property and used the delayed financing exemption. It was a great deal both ways!

After several weeks of crazy interest, I found a great assignee who agreed to be the "and/or assigns" for the contract, at listing price. However, once the Seller found out what my assignment fee was, he told me he was going to back out!

How did you add value to the deal?

This fourplex would not have been worth $110,000 if I had not renovated my fourplex to the way it is now. Before, my fourplex was basically a crackhouse and only worth $32,500 in its past condition. Now, it is worth $125,000 appraised, and I rent out to great tenants with 700+ credit scores!

I added value to this wholesale deal through my knowledge and work on the neighborhood and investor targeted advertising. Unfortunately, the Seller did not see it this way, leading to this outcome:

What was the outcome?

After legal negotiation fees, double closing costs, and a month of nerve racking anxiety, we got the Seller to close! We found out the day prior to closing the Seller had a change of heart, and it was a huge surprise because we thought we would have to settle. Because my assignee was abroad and could not wire the money, I ended up closing the transaction myself that very day and then double closed with the assignees a week later once they flew into the US to make the wire.

Lessons learned? Challenges?

Always make sure you get ALL the Owner(s) on the contract. The loophole my Seller cited for trying to back out was that his "business partner" was a 50/50 member of the LLC who owned the property and that his partner had verbally committed, then changed their mind.

Well, this "business partner" was actually his wife (happily married, not divorced). Imagine! Now lesson learned: always check public records to ensure all needed signatures are present on the contract and subsequent closing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

John Peek out of Andalusia, AL was the real estate attorney who I turned to when the deal almost went sour. His legal advice saved the deal, because if I was left to my own remedies of "good faith" negotiations, I would have played all my cards and been forced to fold. That goes into my second lesson learned:

Have a good attorney in your Rolodex. When things turn bad, don't be like me and have to cold call 20+ attorney offices to get legal advice. Take an attorney out to dinner.