The Wonderful World of Wholesalers

[Will Barnard]

Ah yes, another beautiful day of the "wholesaler".

I just recently contracted a new deal, direct from the bank (never touched the MLS) and the previous homeowners are still occupying the property (this would be a transaction very similar to buying at trustee sale, but with contract time, title insurance, etc.)

I have 5 deals ongoing and just over $2M out into these 5 transactions, as such, my cash and that of my current private investor network is used (with exception of a few small $25k and $50k investors which can not be pooled to complete this deal). As such, I intend to wholesale it unless I can come up with approx $250k in additional private funds from one investor (I won't use hard money so please dont suggest it).

So, as the story goes, I send this deal to someone who had just recently called me wanting deals. As it turns out, somehow, my deal got into the hands of another so called "wholesaler" and my standard $10k wholesale fee which would be tacked onto the contract purchase price of $235k not only had $5k extra tacked on from my guy, but his contact then tacked on an additional $8k for a grand total purchase price to some investor for $258k. I spoke with the investor and that number obviously does not work (I would not pay that, neither should anyone else) so I went back to my guy and said, "to be fair, this deal can only work if you two "middlemen" split the $5k you takced on and forget the additional and ridiculous $8k. He was fine with getting a fre $2500 for just making a phone call (no representation, no risk, no nothing) but apparently the other "wholesaler" wants her $8k so is trying to shop it to more investors. I have made it very clear that this person should be contacted and told that I will NOT sell to anyone with her fee tacked on and thus, she will get $0 from my transaction, or she can get a free $2500, her choice.

What do you think her answer is?

- Will Barnard

[Bill Gulley]

She wants her 8K?

Will, that'sa lot of brain damage. The bank told you that you could buy it (along with others) and you have a buyer and twoothers want to tack on a fee? Any contracts in any of this?
I don't see where They enter the picture...

[Margie Cromwell]

I'm with Finacexaminer, who has the original contract with the bank? If it's your contract and your assignment document, I don't see how they can collect any fee.

[James Hiddle]

Will since this is from the bank how are you going to wholesale this since standard wholesaling doesn't work with banks?

On top of that how did 2 wholesalers get into this deal? If the bank finds about this they might not want to deal with you unless they fully trust you.

[Jimmy C.]

Find out who this lady is and contact her directly. You have to do that to protect your deal, right?

If she has an end buyer, I would bet she takes the 2.5k

[Will Barnard]

Perhaps I did not explain properly or you all are missing the facts here.

I have the purchase contract with the bank. The reason I can wholesale it is because I locked it up under the name of a new trust, of which I have yet to form but did provide the name for it on the contract.

The first party I sent it to was somebody who has cash buyers. He then sent it to someone else who was not the principle buyer, but another wholesaler who wants to tack on an additional $8k onto the price for herself (which is obsurd by the way).

My point is that there are so many "wholesalers" out there who think that making a phone call to introduce one party to another is deserving of $8,000. In my book, you either do it right, or you get eliminated!

As it stands, the actual principle buyer is not (obviously) willing to pay such a high price tag and as such, this greedy (I want to hit a homerun everytime) wholesaler will end up getting nothing from my deal because I wont do business with her or any buyer she brings to the table.

[Account Closed]

will, how long do you have and do you have another option or backup funds in case you can't wholesale it? good luck!

[Will Barnard]

Bryan, I have until next month to close. I am not worried about finding a buyer for it as I have only offered it to two people, it has yet to be blasted out to al my contacts or anyone here on BP.

With that said, I am working on finding an additional private investor to fund it so I wont have to wholesale it. If I do wholesale it, with these numbers, it won't be difficult.

$345k purchase to wholesale buyer, $25k max rehab (could be less if kitchen is good, I am assuming a full gut and redo of kicthen and both baths + all the standard paint, carpet, lipstick stuff) and $359k exit (all day, could be higher).$89k gross spread with only $270k invested will net great return.

[Account Closed]

did you mean 245 for purchase??? seems like you're findin good deals out there..wish a wholesaler here was finding great deals..i've been contacted by several but none have delivered so far..i'd happily pay a wholesaler for a property i didn't know about that was a great deal...good luck with whatever option you go with.

[Will Barnard]

Yes, thanks for correcting my typo Bryan, $245 purchase to buyer (my contract price is for $235k)

[Matt Rosen]

Hi Will,
The $2.5k is very generous, and somehow she has justified $8k? All for a text she will send to her buyers list? Yeah...thats enough to make my skin crawl also.

Good thing for real deal wholesalers is that there is less competition than most think.
Is she firm with marking it up $8k? What # did she pick?:)

[Will Barnard]

I dont even know who she is Matt, but the way I understand it is yes, she is set on $8k, but what she does not realize is she will be getting no check at all! And yes, $8k for sending out a text or email is a pipe dream at best.

[H.D. J.]

1% of something is better than 100% of nothing.I don't understand how she doesn't see that the value of you as contact is more important than $8k.I am a wholesaler myself and I would gladly take the$2500 with ability to close more deals with you.Not real hard to understand

[Steve L.]

PM/Email me the address, I'll take a look at it. The numbers sound good. Have you made contact with the current occupant, are they willing to leave? It sounds like the bank is selling it occupied.

Wholesalers in Southern California are crazy. They do some "funny math" to make deals work.

[Will Barnard]

Steve,

The bank is indeed selling with occupants remaining, I have made contact with occupants and their attorney who was very nice and it appears she is working to get a resolution and agreement to my cash for keys offer. waiting her reply.

As to the property address, I am giving this until next week to see if I can find some more private money before I really send this out to potential wholesale buyers. Are you on my buyers list? If not, go to my website and join so you will get the email if and when it goes out.

Will

[Stan Jackson]

Awww Jeez Will,

I just looked at your video and previously had an image of you as a older judge looking person, lol!

[Rob Gillespie]

I did several transactions with multiple assignments, however there were not banks involved. Since you are in the driver seat, I would just call all parties involved below you, and let them know that it will not fly with the bank to have so many assignments.

With that said, if someone does have an in buyer that is capable of closing the transaction, you may want to even give up a few bucks of your 10,000 to make the deal fly. That is a complete business decision on you're end though. You will just need to collaborate with all the other folks involved to divide up the money through the use of an entity, so there would only be one pay out on the HUD.

[Will Barnard]

Originally posted by RobTheHouseGuy1:

I did several transactions with multiple assignments, however there were not banks involved. Since you are in the driver seat, I would just call all parties involved below you, and let them know that it will not fly with the bank to have so many assignments.

Perhaps you should read the post again, you are missing the key components of this transaction.

1. I am NOT assigning anything to anyone.
2. There are multiple middlemen trying to get a piece of a majical pie that does not exist
3. Many wholesalers are too greedy and think that making a phone call constitutes them receiving thousands of dollars - they are wrong.

Lastly, This transaction will not take place with these people in the middle, I won't allow it, it has nothing to do with the selling bank.