The Psychological Challenges that Come with Checks with Commas
I've Done a Ton of "First Deals" with Newbies and I've Observed a HUGE Enemy of Future Success. Greed.
A lot of these "First Deals" are brought to my company by new wholesalers just getting started. Here's how it works:
For newbie wholesalers in one of my markets (Philadelphia, Chicago, & Tampa Bay), we offer assistance with getting started, The newbie is responsible to generate seller leads. One of my partners will guide the newbie through the process of visiting the house, preparing rehab estimates & creating the offer, and negotiating the deal. We then get the deal sold, title cleared, and the check from closing-which we split 50/50 with the newbie.
This works well except for one challenge. The newbie immediately believes that the business is SO EASY and they DON'T NEED ANYONE'S help. They decide that on future deals they want the whole assignment and keep the details of the next leads to themselves.
I know this feeling because I started my career the same way. I closed a bunch of deals, got greedy, and decided I wanted to close all the deals myself. It didn't work out well for me.
I'd close a few deals, but by far I am always more productive when I have partners. It helps me with accountability..
The other challenge comes when you're consistently splitting deals in the $5K-$10K range and then a $30K-$50K profit deal (or more) comes up. I've watched people's minds become very unreasonable when this situation arises and there occurs "a money grab".
I've watched partners flat out steal the whole deal. I've watched other partners attempt to re-negotiate splits. The larger the dollar amount on the table, the greater the temptation to attempt shady business.
I'm aware of this phenomenon now and am able to warn new partners who have not experienced profits this large. If you have big deals in the works, be aware of this challenge and get everything in writing.