Wholesalers, Please Provide More Value

Have you ever received an email from a wholesaler, that is marketing a property to their buyers list on behalf of another wholesaler/investor, but has marked the price of the property up by another $5,000.00? If you've been in the RE Business very long, you will inevitably run into this situation. While I don't necessarily have a problem with wholesalers re-marketing deals, I think a few things need to be in place before attempting to do so, which can help prevent creating a potential mess:

1. Before sending out an email, have the original buyer to the contract (Assignor) sign an Assignment to you (Assignee), or Option type agreement, that gives you the option to buy, thereby granting you some sort of beneficial interest in the property. You want this up front, to prevent wasting everyone's time.

2. Make sure you are not re-marketing the property to the same primary set of investors as the original Assignor. The RE Investment "world" is rather small and you don't want to develop a reputation for remarketing deals, that are artificially marked up--unless you have a different network of potential buyers than the original Assignor. Even better, agree that the original Assignor pay you some sort of flat fee on the HUD if you help procure a buyer, without having to mark up the price (everyone seems to want to make 5k per deal for doing nothing, recently)

3. Actually familiarize yourself with the property before you try to remarket it, so if you get an interested buyer on the hook, you can actually know what you are talking about.

4. Disclose to your potential buyer what "beneficial interest" you may have in the property. The more transparent you are, the better for all parties involved.

5. Respect the original assignors wishes--primarily access to the property. Do not have potential buyers showing up to the property unexpected.

While on this subject, I happened to speak with a local investor today that actually purchased a wholesale deal that had 4 Assignors on the HUD. Wow! While I thought it was rather ridiculous, in the end, the deal worked for them.

Lesson: Make it easier for everyone in this business by putting some professional effort into putting deals together, instead of simply re-marketing deals that are artificially marked up 5K via email, with no instinctive value added to the transaction.