How do you wholesale other wholesalers deals

How do you wholesale other wholesalers deals

Hackensack, NJ · Member since 2008 · 49 posts · 1 vote

Hello everyone i have question that i need answered from either an experienced wholesaler or some one who has already figured out this process.

so my question is, how do you wholesale other wholesalers deals and make sure your protected to the point that you get paid if you bring the buyer to the table?

the reason why i ask this question is because i find it alot easier to go into and agreement with another wholesaler who already has the deals then to do all this marketing and etc to attrack the few homeowners that have equity or actually have a good deal for you (doing this just allows me to move more quickly and build up a list of inventory and etc)

because what i find is wholesalers that do have great/awesome deals are still having trouble flipping them, and its not just because of the tuff market we're in either, its because most investors know real estate tactics but don't know marketing, like i've seen wholesalers who couldn't sell a property for say $30K but another wholesaler get a hold of it a re-market it and sell it for $55K without doing anything to the property at all

so once again my question is how do i wholesale other wholesalers deals (because i have a list of the active buyers), like what is the deal structure of how to do this properly to make sure i get paid, because like two days ago me and my partner got beat for like $8K, we brought the buyer to the table and once we did the first wholesaler went around our back and did the deal with our buyer and took our profits

so is the norm just doing a assignment of contract from one wholesaler to the other ((because it one time that me and my partner got beat we didn't do it this way)), if this is how it's normaly done, right i would have to submit like two separate assignment agreements with the purchase and sale to the closing agent just for my buyer to be able to close on it

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Jerry PuckettPro Member
Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
15y

While for more or less I agree with Carlos and Stinson,(and Will for that matter), I can think of a few situations where this partnering is beneficial.

1) There is one local wholesaler I know that has made finding buyers his niche. Instead of marketing for sellers, he markets for buyer's and will send your deals to them for a small fee. If you're a one man show trying to wear all the hats, this will help you get more deals done while getting established.

2)A couple months back, I had a buyer pull out 2 days before closing. I did not have the forethought to have a back up buyer in place. I called one of my mentors who sent the property out to his buyer's list and had another buyer within 2 hours. I paid him a grand at closing.

3) About a month ago an out of state investor I've done business with before contacted me and said he had 300k burning a hole in his pocket. He wants more rentals. I don't keep that much inventory, and he wants them NOW. Wants to buy a house a week. I wish I had the contacts in place to pick up REO's like Will does, but I don't yet. So I'm taking a close look at other wholesalers deals to find the matches I need (while also stepping up marketing AND trying to set up my ducks to wholesale REO).

I think there's a big difference between a vulture and a partner. This IS a people business, and I say the bigger your network the better.

See this reply in the discussion

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  • Real Estate Investor · Katy, TX · Member since 2008 · 430 posts · 22 votes
    18y

    That's a loaded question. I typically stay away from wholesaling a wholesale deal, or having wholesalers try to wholesale my deal. I get many wholesalers who call about my deals saying that they will buy them, then when I dig deeper they are in fact just trying to wholesale them, themselves.

    I stay away completely.

    Now I have helped other wholesalers market their house to my buyers list for a referral fee. There really isnt a way to make sure you get paid on these, really gotta play the trust game. But I know if I provide a seller for someone who will make $5000 on the deal, they probably wont have a problem paying me $500 to make sure they can use my services in the future if they need to. Basically not burn this bridge.

    Not sure if this helped you at all.

  • Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
    18y

    I've bought houses from wholesalers and flipped them, and I've sold houses to wholesalers and they flipped them. There's a couple different components here.

    Control of a transaction comes from a contract. If you think its a good deal, and you think you can wholesale it, put it under contract. Whether its with another wholesaler or with a homeowner, GET A CONTRACT.

    Now as for the actual way to structure the deal, you can have the wholesaler assign you the contract, and you could double close it to your buyer. I've done this several times and have even double closed an assignment that was double closed (triple closed?) to someone else. If the wholesaler wants to double close it to you, you could assign your contract to your buyer. Technically you could also assign the assignment (a double assignment), but I've never done that and you would need to check with your title agent on that one.

    Now whenever I am selling to a wholesaler, I always make sure they understand that I fully expect THEM to close on the property whether they find a buyer or not. There are no contingencies in my contracts, and I always get $1000 earnest money paid to me directly (not to the title company). Worst case scenario, I make a $1000, and I have to remarket the property.

  • Flipper/Rehabber · Tampa, FL · Member since 2008 · 403 posts · 109 votes
    18y

    Admittedly, I did not read the entire opening post, nor any of the others. So, I apologize if my response is redundant, or just appears way off. Here is what I would do.

    I do a lot of handshake deals with local investors. If there is room, mark up the property and bring in a buyer. Have him buy it directly from the wholesaler, at your marked up price, and have the wholesaler cut you a check for the difference at closing.

    If there is insufficient room, tell the wholesaler you'd like a 10% finders fee for bringing in a buyer. In a hot market, that wouldn't fly. In today's market, though, he should be more than happy to do so.

    If those aren't your cup of tea, you can have the buyer buy directly from the wholesaler, but attach an addendum to the contracts for your fee (consulting). You can also attach a lien invoice to the contracts, equivalent to your fee.

  • Real Estate Investor · Baltimore, MD · Member since 2008 · 619 posts · 75 votes
    18y

    I am now attempting to do this. I just found another wholesaler who only wants to make 5k on this deal, but there is definately the potential for another 10k.

    As stated, its as simple as just putting the property under contract with wholesaler #1 and re-assigning your assignment contract?

    I am assuming you would just pass both Contracts of assignment to the title company and two seperate assignment fees would be collected?

  • Real Estate Investor · Tampa, FL · Member since 2010 · 28 posts · 8 votes
    16y

    Bumped !

  • Wholesaler · Bay Shore, NY · Member since 2009 · 359 posts · 199 votes
    16y

    Hi Chris - I would use a JV (joint venture) agreement that details how the fee will be shared with the other wholesaler percentage wise. That would ensure that its on paper and that there is no funny business when the deal is closed. PM me and I will send you one that I use.

  • Real Estate Investor · Baltimore, MD · Member since 2008 · 619 posts · 75 votes
    15y

    Lately I've been marketing other wholesalers deals with great successes.

    I have them sign a disbursement agreement that is forwarded to the title company to authorize a 50/50 split of the assignment fee.

  • Flipper/Rehabber · Seminole, FL · Member since 2010 · 859 posts · 316 votes
    15y

    Anyone ever used a Flex Option? They floated around for quite a while after Tim Mai sold a course way back when.

  • Real Estate Investor · Baltimore, MD · Member since 2008 · 619 posts · 75 votes
    15y

    I've never used a flex option, but have seen alot of wholesalers use them.

    I would like to see some input from some others regarding options, but it seems that they have become quite popular lately.

    Thanks
    -Terry

  • Greenville, SC · Member since 2008 · 8 posts · 7 votes
    15y

    Chris, I have assigned contracts to other wholesalers many times. It all depends on who you trust. I can count on one hand the number of investors that buy 99% of my deals. I trust them and they trust me. I had one deal that I assigned to another wholesaler and he assigned the contract to a buyer and we closed in 2 weeks. I made $7500, he made $5000, the buyer fixed the house up and sold it for a nice property. I got what I wanted as did everyone else. Be sure the person you flip the contract to is one of your core "players." do not assign it to anyone else.

  • CA · Member since 2010 · 11 posts · 0 votes
    15y

    What if the shoe was on the other foot? I've been contacted by other wholesalers wanting bring me end buyers. How would I structure a deal with them that protects me?

  • Altus, OK · Member since 2008 · 2k+ posts · 690 votes
    15y
    Originally posted by Eric Hairston:
    What if the shoe was on the other foot? I've been contacted by other wholesalers wanting bring me end buyers. How would I structure a deal with them that protects me?

    Structure a JV agreement that says you two split the profits if you provide end buyers that close on the other wholesalers deal.

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    15y

    It is tough enough to find a deal with a decent spread in it today, and it gets harder if you want to wholesale that deal as your fee is tacked on. Now, you would have to tack on a second middle person which really bites into the spread and could create problems.

    I personally will not do a deal if my buyer is a wholesaler. I don't believe that such a structure is condusive to me or the ultimate end buyer. (This is just personal preference and opinion)

  • CA · Member since 2010 · 11 posts · 0 votes
    15y
    Originally posted by Mr_Investor:
    Originally posted by Eric Hairston:
    What if the shoe was on the other foot? I've been contacted by other wholesalers wanting bring me end buyers. How would I structure a deal with them that protects me?

    Structure a JV agreement that says you two split the profits if you provide end buyers that close on the other wholesalers deal.

    thanks for the info.

  • Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
    15y

    I put daisy chain wholesaling in the same category as people that try to "wholesale" properties found in MLS. What value do you add? NOTHING!!! Go find your own deals. Sorry, rant over.

  • Wholesaler · Dallas, TX · Member since 2011 · 294 posts · 152 votes
    15y

    Carlos and I recently spoke about this topic. It seems that most of the Dallas "wholesalers" are marketing the same properties. Often times you can find the same "deal" with two ir three different prices. Lol.

    Like Carlos said no value added.

    Too many newbies think wholesaling is fast and easy money that takes no work or money.... thanks to the Gurus that have mastered the "get rich quick investing with no money" sales pitch via Internet marketing.

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    15y

    While for more or less I agree with Carlos and Stinson,(and Will for that matter), I can think of a few situations where this partnering is beneficial.

    1) There is one local wholesaler I know that has made finding buyers his niche. Instead of marketing for sellers, he markets for buyer's and will send your deals to them for a small fee. If you're a one man show trying to wear all the hats, this will help you get more deals done while getting established.

    2)A couple months back, I had a buyer pull out 2 days before closing. I did not have the forethought to have a back up buyer in place. I called one of my mentors who sent the property out to his buyer's list and had another buyer within 2 hours. I paid him a grand at closing.

    3) About a month ago an out of state investor I've done business with before contacted me and said he had 300k burning a hole in his pocket. He wants more rentals. I don't keep that much inventory, and he wants them NOW. Wants to buy a house a week. I wish I had the contacts in place to pick up REO's like Will does, but I don't yet. So I'm taking a close look at other wholesalers deals to find the matches I need (while also stepping up marketing AND trying to set up my ducks to wholesale REO).

    I think there's a big difference between a vulture and a partner. This IS a people business, and I say the bigger your network the better.

  • Wholesaler · Dallas, TX · Member since 2011 · 294 posts · 152 votes
    15y

    Good points Jerry!

  • Real Estate Investor · Baltimore, MD · Member since 2008 · 1k+ posts · 268 votes
    15y

    I figure if the original wholesaler does NOT want his deals to be wholesaled, he needs to put this in writing in his contract with the buyer.

  • Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
    15y

    @Jerry - There's a difference between what you mentioned in your post and what I failed to mention in mine. I fully understand the benefits of working with others in business. My gripe is with those that have little to no intimate knowledge of a deal yet market it like it's their own. These birds suck whatever life might be left out of it -- Vultures indeed!

  • Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    15y

    Carlos-I tried to accept your request to be a colleague, but it doesn't work. Try again with new request if still interested. Sorry. Rich

  • Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
    15y

    Rich - BP won't let me send you a colleague request again. It returns the following: "Could not send request
    Recipient has already received a colleague request." Maybe a Mod will see this and fix it.

  • Member since 2021 · 1 post · 0 votes
    4y
    Quote from @David Darling:

    Chris, I have assigned contracts to other wholesalers many times. It all depends on who you trust. I can count on one hand the number of investors that buy 99% of my deals. I trust them and they trust me. I had one deal that I assigned to another wholesaler and he assigned the contract to a buyer and we closed in 2 weeks. I made $7500, he made $5000, the buyer fixed the house up and sold it for a nice property. I got what I wanted as did everyone else. Be sure the person you flip the contract to is one of your core "players." do not assign it to anyone else.


     Can u provide that assignment contract. 

  • Wholesaler · Member since 2022 · 2 posts · 0 votes
    4y
    Quote from @Terry Royce:

    I am now attempting to do this. I just found another wholesaler who only wants to make 5k on this deal, but there is definately the potential for another 10k.

    As stated, its as simple as just putting the property under contract with wholesaler #1 and re-assigning your assignment contract?

    I am assuming you would just pass both Contracts of assignment to the title company and two seperate assignment fees would be collected?

     Hey @Terry Royce Im new to wholesale and would love to know if this works can i place another wholesale deal under contract and whole sale it myself to my buyer 

  • Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    Wholesalers are typically shady to begin with.. imagine a deal dealing with two separate wholesalers? Yeah, no. 

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