Sticky Situation with Wholesaler on My Property

Sticky Situation with Wholesaler on My Property

Wholesaler · Miami, FL · Member since 2015 · 202 posts · 149 votes
This is a bit of a sticky situation that I need help with. Sorry for the long post: On April 6, I got a property under contract. A couple of hours later, I sold the contract to an "investor" (who I lowered my sale price by 10k for) in the form of a double contract. Contracts are sent to closing attorney the same day. It was my first property so I thought nothing of the $500 deposit he stated in his contract. A week later, he says his "lending partner" needs to see the property. I agree thinking it was a HML. I call my buyer to see what the results were. No response. I call the attorney who says he hadn't spoken to him in 2 days. I call his "lending partner" who says YES I WANT IT BUT I WANT IT AT $2,500 LESS. Meanwhile, I'm sending my "cash buyer" emails and texts saying "Do you want the property for sure? Have you made an ultimate decision on the closing date? When are we closing?" No response. Finally it's 14 days later, no deposit from my cash buyer has been sent in to attorney, no closing date has been specifically other than the contract expiration of April 30. So I call his "lending partner" and say 'listen, I haven't gotten any response from my buyer and he hasn't sent in a deposit. Let's sign a contract'. So we sign a new p&s contract and I send my then unresponsive " cash buyer" an email stating the cancellation of my contract. He emails back immediately saying "why? You can't do that. We signed a contract." (He still hasn't sent in deposit of $500 or set a closing date) So I say fine I'll cancel the second contract and ours is still intact. Now 5 days later, he sends the deposit and the attorney BEGINS TITLE SEARCH?! (apparently no title search has been going on for like 3 weeks since we sent him all the contracts) WTF??!! Now it's TWO MORE WEEKS to close at a MINIMUM if he even has the cash he claims (I mean it took that long for a small $500 deposit. Imagine over 100k home price) So I google the property because I'm paranoid and it's being sold online by other people at $35k more than our contract price and I realize this "cash buyer" of mine is wholesaling my property! What can I do? What are my choices? What should I do?? And he's even a mentor/coach in my city. I can't believe he would tie up my property like that!! I need help :((.
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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y

Sounds like he's just doing the same thing to you, that you're doing to the owner. WHat's the problem?

See this reply in the discussion

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  • Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
    11y

    @Ana G. It sounds to me like you are now getting the education that you may have balked at paying for earlier.

    Not to worry. Some very good posts. 

    Here's a book to buy, read and study: Robert J Ringer, 'Winning through Intimidation" and it's an intentiinally mistitled book in how not to be intimated by others.

    Whether you salvage something from this deal or not, it ought to motivate you to spend mire time crafting your deals, engineering their structure, drafting the documents and vetting your buyers. Not a criticism, merely an observation.  

  • Investor · Century, FL · Member since 2015 · 950 posts · 603 votes
    11y
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    And we wonder why states are cracking down on wholesaling... LOL.. its amateur however on steroids... this is why most sellers really need to be represented by GOOD RE agents.. not wanna bee wholesaler investors with only guru or bp wholesaling knowledge behind them. may not be an issue to the seller who is getting abused .. 

    @Wayne Brooks   this is truly comical.. I love your statement  " whats the problem"  LOL

  • Rental Property Investor · Durham, NC · Member since 2014 · 1k+ posts · 1k+ votes
    11y
    Originally posted by @Ana G.:

    Randy E. I JUST thought of that idea today. It freaked me out when I thought that they were probably even giving SHOWINGS to the property without me there so I thought of simply telling the seller "look I see you haven't found a new place yet (she hasn't) so why don't we cancel this contract and make a new one to give you a few more weeks to find a place." Genius idea, Mr. Randy E.

    **UPDATE**
    Im going to see my seller on Monday to cancel the original contract. I'll post updates.

     Ana,

    Just to clarify.  My suggestion was not to cancel your deal with the Owner in order for you to then sign a new deal with the Owner.  That would be pouring gasoline on a fire.  My suggestion is to cancel your contract with the Owner so that the Owner might have a better chance at actually selling her property.

    This may be a great learning moment for you, but for the Owner it might be a big problem moment.  She wants to sell her house.  For nearly a month, she has been unable to sell her house because of you.

    I'm not criticizing you.  I just want to put that out there in case you haven't considered it yet.  Sometimes, you have to let go so that someone else might end up in a better situation.

    Good luck to you.

  • Specialist · Clermont, FL · Member since 2015 · 91 posts · 35 votes
    11y

    @Ana G. I'd also like to connect with you too.

    Every time I think I'm ready to take the plunge, I read some horror story.

  • Developer · Saraland, AL · Member since 2013 · 93 posts · 52 votes
    11y

    even with the mistakes and issues, you are learning valuable lessons. The number one thing you got right,'you took action'. You will learn more through doing, than any other way.

  • Investor · Whitttier, CA · Member since 2015 · 405 posts · 110 votes
    11y

    I have faith this will workout for your. 

    I've actually heard of this happening before, but the deal just barely squeaked by and the original wholesaler was non-the wiser. I agree, this was not a good, nor professional move on the part of the other wholesaler.

    keep us posted

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y
    Originally posted by @Brent Coombs:

    @Ana G. So in the first place, how many dollars did YOU give the owner as your deposit? How much skin did you originally sacrifice to the game?...

    Another "wholesaler" simply ignored these same questions. How many of these people are operating in an honest and fair manner? How many mislead homeowners that they will actually buy the property? How many mislead the owners and use bogus "inspection periods" to market the property and then walk away if they fail to find a buyer? Dishonest dealings will earn a reputation that will be hard to overcome. Shame on anyone that plays these games with peoples lives and their homes. They don't care though. They are only concerned with the almighty dollar and will do anything at any cost.

  • Investor · New York, NY · Member since 2014 · 156 posts · 48 votes
    11y

    I'm sorry to hear you went through this! I wish you luck, I hope your second buyer comes through. I'm rooting for you!

  • Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    This reminds me of that old saying, "There's no honor among th...wholesalers."

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