Handling of Wholesale Fee
I am pretty new in this game and have a question. Have been dabbling in acquiring properties from wholesalers primarily for buy and hold. Wholesalers charges fee for their services. Usually when wholesalers have the property under contract the price includes his fees or considerations(or whatever you call) and he reassigns the contract.
But when I directly close with the seller such fees don't show up in HUD. The fee has to be paid outside of closing transaction. To keep my book clean how this transaction is handled.
I asked my lawyer about this. He basically said I would get wholesaler's SSN or EIN # may be in a W-9 form and a Receipt of the payment made and issue him a 1099 at the end of the year. Is this how this is done? Any help would be greatly appreciated.