Hey guys, I'm new to wholesaling, and I had a question about how working with another wholesaler works. Today I was in the records department in my county doing research, and a guy there noticed I was pulling information on properties and asked if I was a wholesaler. And he introduced himself as a fellow wholesaler and we exchanged information. Now I get a text from him about a property he's got under contract and he's asking if I can get him x dollar amount for the deal.
Like I said, I'm new to this, so I have no idea how working with another wholesaler like this would work. I'm open to shopping the contract around to buyers, but I don't have any idea what sort of agreements need to be signed or what steps need to be taken to ensure I get paid. I wouldn't think I could even legally market the property without some sort of contract. Does anyone have any insight to how I should go about this? Is it something even worth pursuing? I'm wholesaling out of Arizona, if that has any bearing on what is required.
I appreciate any help anyone could give me.
When wholesaling with another wholesaler, you should have a co-wholesaling agreement signed between you and the other party. Usually it is a 50/50 split, and a copy of the co-wholesaling agreement should be delivered to the title company prior to closing so they can disburse the proceeds accordingly.
You also have to be clear how the other wholesaler wants to split the proceeds: does he want you to sell the property for over what he wants or is he willing to disclose to you what he has the property under contract for, so you know the spread to split? If he wants you to sell the property for over what he wants, I would be careful about that. That would most likely price it off the market for a wholesale deal (buy low-sell low) and you would end up spinning your wheels for nothing.
Hey Matt, we partner with other new wholesalers all of the time to help them understand the process and business, and do a 50/50 split with them. Getting started in the process I would have a contract so both of you know what the split is and the title company can know to. I may be worth asking around your local REIA community to see what kind of rep your potential partner may have. If you don’t have the property under contract, you can’t market the property, just use words like “there is a property that I may be getting under contract if you are interested. I suggest being as transparent with buyers as possible.
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