Another Question For Wholesalers

[Aaron Phillips]

I just finished reading the Wholesaling Guide on BP for a second time, just to brush up on my Wholesaling knowledge. Now i'm back here, and seeking a final answer to the big question I know many other Noobies have about wholesaling. 

Wholesaling can be one of the most profitable ways for people who are looking to get into Real Estate to build capital to fund other projects. E.g. I want to do 3+ Wholesale deals a month so that I can build the capital needed to do my own flips, or rentals. 

Now for the big question! Should a wholesaler have the funds to purchase the property themselves, if unable to assign the contract to a Cash Buyer?

If the wholesaler found a property with an ARV of $110,000 (Same as example used in the Wholesaling guide) had $30,000 in repairs, Wholesale Fee of $5,000, and $15,000 for Fixed Costs - and knows the Cash Buyer wants to make a $20,000 so the Wholesaler gets the contract for the MOA of $40,000.

Is the Wholesaler required to have $40,000 to close on the property once it's under contract in the event of the Cash Buyer can't close, or the Wholesaler can't find a Cash Buyer?  

I've heard a lot about Fraud by Inducement where the Wholesaler basically lies to the Seller and gives the Seller the impression that he/she (the Wholesaler) has the funds necessary to close but really doesn't. Which is why I tell each Seller that I will be assigning the Contract to a Cash Buyer. 

The way I want to start my Wholesale Business is by 1.Finding Great Deals
2. Connect the Seller to the Buyer 
3. Collect my 'Finders Fee' 

Without the intent of owning the property myself.

The whole reason to me getting into Wholesaling is so that I can build up enough capital to become a 'Cash Buyer' myself. I want to be able to do Fix & Flips , and own multiple rental properties. Wholesaling just seems like it can open up a window of opportunity for me, and help me find people I can use for future connections that will propel me in my Real Estate career. 

If this isn't possible to Wholesale without the intent of owning the property myself, then I will continue to search for other ways to start my Real Estate career. I want to operate my own Real Estate business, and I want to do it with integrity. 

With all due respect - I want to hear from people who are starting their own Wholesaling business, or people who have been Wholesaling for awhile now. I know there is many people who disagree with Wholesaling, but I am not here for debate. I am here for facts, and advice. 

Thanks in advance BP!

Aaron Phillips