When a Wholesale Deal Falls Apart

[Braden C.]

I’ve been very fortunate to have done several hundred wholesale deals that have gone very smoothly. It’s not uncommon for issues to come up in a deal but I can almost always find a solution. This is one of the few times that there was simply nothing I could do to save the deal.

The story… I received a late night phone call on a Wednesday and let it go to voicemail. The next morning I checked the message and it was from a lady who said she had received my letter and would like to sell her house right away. I called her back and we briefly discussed the house and why she wanted to sell. It was an inherited property that she had owned for over 10 years, the previous tenant had recently moved out and she didn’t want to be a landlord any longer. I asked for her permission to enter the house to get an idea of the condition. It was very close to being a tear down and needed a lot of work. I called her while I was still at the house and asked if I could meet with her to discuss my offer. I met her at her apartment; she was probably in her late 70’s but seemed very organized. Because she was elderly I made sure to go over the contract line by line, just to make sure that she understood everything. We talked for over an hour not only about real estate but about her life, her kids, stories about growing up in the area, ect.

Once we agreed on a price and had gone over the contract I left and called one of my landlord buyers to give him the details. He called me back later that day after seeing the house and said he would take it at my asking price which was a $6,000 profit for me. After I received the assignment agreement back from my buyer I sent everything to my title company so we could close by the following Friday. On Monday the title company called to let me know the title work came back clean and they were preparing the closing docs for Friday.

Tuesday is when the deal fell apart. I received a call from a woman who said she had found my business card and a copy of a real estate contract on her mother’s kitchen table the day before. She told me that her mother suffered from severe Alzheimer’s and had signed a contract with a different buyer two weeks before. I couldn’t believe what I was hearing; I had sat with this woman for over an hour and never had even the slightest impression that something was wrong. I very politely asked the daughter to send me a copy of the contract with the other buyer. I have dealt with dishonest children on deals in the past who were simply waiting for their parents to die so that they could inherit the house. A couple hours later I received a copy of the contract via email. It took me less than a minute to decide to just let this one go. Sure, the daughter might have been lying to me. Another buyer could have come along over the weekend and agreed to write an earlier date on the contract. My gut told me that I was being played, but I didn’t want my gut to be wrong. If everything was true, the last thing that family deserved was to have to deal with a real estate investor who wanted to fight over a crappy old house.

Any other wholesalers ever have something like this happen to them? What was the outcome?