Working with a Wholesaler

[Patrick Hall]

As a real estate investor, I have never encountered a Wholesale deal until now.  So.....I know this is a broad spectrum question but what do I need to consider when working a deal with a real estate deal?  Ins and outs?  Thanks in advance for answering.

Patrick

[Mitch Messer]

Hi @Patrick Hall. We've been engaged in many wholesale transactions. Here are my best three bullets worth of advice:

• Get and review client references - Talk to the last couple of investors they sold a deal. If the entire process was a nightmare, run in the opposite direction. Ditto if the deal was misrepresented or basics were overlooked. Only deal with reputable, experienced wholesalers. Success leaves clues, but so does incompetence.
• Ensure your wholesaler is direct to the seller - Refuse to deal with anyone who is not party to an actual, valid purchase agreement with the seller. No daisy-chains, no exceptions. Just ask, and if you have to, check with the closing attorney.
• Don't rely on their ARV, market rent or repair estimates - Smart wholesalers are in it for the long haul and understand that their success is tied to yours. Sadly, all wholesalers are not so evolved and many will dump crappy non-deals on you if you let them. Do your due diligence and work your numbers using your best data, not theirs.

Hope this helps. Good luck!