Ways to prevent getting cut out of a deal
I am a wholesaler and am trying to find a strategy of preventing myself from getting cut out of deals. Example, I received an email from another wholesaler looking for buyers. I want to send this info to a buyer/investor. I passed along the info (without) the address just to see if he was even interested in the area first. The buyer asked why I didn't include the address. I understand it's hard because the buyer needs to do their due diligence, but at the same time I don't want them to take it and run. Do I send a general JV agreement to the buyer and him or her sign it first and then send the details? Do I include a non-refundable deposit clause in there? I'm not sure about how to do the 'passing along' phase of the deal.
I watch a lot of Steph Davis' videos and she suggested having the wholesaler do an assignment contract with me and assign the property over to me. Then I do an assignment contract with the end buyer. So for example the seller has a purchase & sales contract with the wholesaler for $50,000. The wholesaler is selling it for $55,000, so he wants a $5,000 assignment fee. I find a buyer who is willing to pay $60,000 (which would give me a $5,000 assignment fee). The wholesaler sends me an assignment contract for $5,000. I send an assignment contract to my end buyer for $5,000. All of this paperwork goes to the title company. At closing, the seller gets their $50,000 (paid in cash by the buyer), the wholesaler gets their $5,000 assignment fee, I get my $5,000 assignment fee, and the buyer gets their house (paid cash to the seller $50,000). So basically she does two assignment contracts.
I really don't want to deal with a lot of paperwork, which is why I was just going to do a JV agreement with a flat fee on it.
Thanks,
Bianca Hood
Wholesaler
St. Louis, MO