using a wholesaler????

Question

Hey guys, I've read alot on here about wholesaling and using that as a way to earn some cash. But what about using a wholesaler to find a good deal. I came across a guy who has a website and does wholesale deals and charges a fee for the properties he finds. If there are any deals on there is it worth paying the fee to purchase the property? Or is it better to keep trying harder to find a better deal.

Account Closed · Answer

I talked to my wholesaler today and told him we were ready to make an offer.  He told me he would fill out the offer for me and present it to the bank.  My offer is $39,000 so I assume he is going to offer less and pocket the difference at closing right?  Like I said, I don't care how much he makes as long as the house fits my criteria and I make money.

There was a red flag though.  I invited him to our REIA meeting in December and he asked if I would provide him with a list of names of the people that are attending because he and a certain investor had some issues and he wanted to make sure he wasn't going to be there.  This guy seemed straight when I met him but my gut is almost telling me to walk.  I'll let ya know how things go....

Account Closed · Answer

I just met some wholesalers a few weeks ago I hope to do business with.  They work their butts off finding properties and dealing with distressed homeowners and in my mind deserve to get paid for the efforts.  I don't care how much they are going to make as long as the property fits my criteria of ME making money.

Robin Vidovich · Answer

Blue,
Not sure how the wholesaler is collecting his fees. When I sell a property, all of the fees are discussed up front and the buyers knows how much they are paying for the property and how much my fee is. On a double close it is a bit different but it sounds like you are dealing directly with the seller.

You may want to ask your wholeseller how he collects his fees because once you have a property with your name on it, the property is yours. Not sure if you have signed any other contracts with the wholeseller regarding fees or not.

Let us know how it works out.

Robin

Account Closed · Answer

Thanks John.   :D

Account Closed · Answer

A property wholesaler will have the deal sown up and they will want to assign or use a double escrow.

If they are working with you to place the offer and you are dealing with an REO situation then you need to figure out a process that is legal, clean and which will let you close the deal.

John Corey

Account Closed · Answer

Thanks again John.  I will definitely fill out the offer and make sure it is legit and in my name.  I'll ask this question again though...  how is the wholesaler going to make any money if I am making the offer to the bank in my name???

Account Closed · Answer

So help me see this rd.  If I fill out the contract and make the offer to the bank in my name and then sign it, how does a wholesaler make any money??  And I am doing this deal myself and my gut says to walk away but I think that only may be because I don't understand this particular deal.

Robin Vidovich · Answer

I agree with John.
When I wholesale a property, the buyer sees the original seller's agreement before I assign the deal so that he/she  knows all of the clauses that might be in the contract. If this guy is signing a contract on your behalf and you don't know what is said in the contract you are setting yourself up for the potential down fall. Also, how is he able to submit an offer with out POA from you????

There are good deals and bad deals as well as people. Look at the deal as if you were doing it yourself, and trust your gut.

rdinvestor

Account Closed · Answer

No comment on wanting to avoid people he has had problems with before. It could happen for lots of reasons and might not reflect on the wholesaler's offerings.

I would be more concerned about the offer to the bank. Many banks will not let a deal be wholesaled. They want the offer made in the name of the buyer. I definitely would not let a wholesaler make an offer in my name. I would make the offer and control the documents so I know what is being communicated.

I have purchased in the past from a wholesaler and see no reason to not do it again when the deal is right. I am just concerned that this person might not know how to do clean and workable deals given what has been reported so far. It could also be incorrect info being presented here. Too hard to tell at this stage.

John Corey

Robin Vidovich · Answer

:D

Let us know how it goes. Maybe your buying experience can help others who are unsure about wholesellers.