I'm on the hunt for a good nondisclosure agreement. I have a few leads that I'm hoping to wholesale out and in the interest of keeping everybody honest, I'd like to have prospective buyers sign a form before I give them all the info on the properties.
Does anyone have a good one that they swear by?
You should always check the FilePlace first. It took me about 10 seconds to find this one...
Don't know how good it is, but it's more the threat of legal action than the reality.
BUT...why do you need an NDA? If you have the property locked up...under contract...there is no reason not to disclose the information to anyone. If you don't have the property locked up, then you shouldn't be giving anyone the address anyway. You can't wholesale something you don't have a beneficial interest in. Get the property under contract and forget about the NDA, unless you're dealing with commercial properties, then there are other reasons to employ an NDA.
@Hattie Dizmond Thank you for pointing that out for me. I didn't realize that was there.
Also, I was told by a more experienced investor that they always use an NDA and that I should too. It surprised me when she said that because I had never heard of one before; but heeding the advice of someone thats been in the business longer, I went looking for that form. Apparently it's not as common as I was led to believe.
Please also know that even though I'm just starting out, I know better than to give out addresses for homes I have no equitable interest in.
Thank you again for your comment. It hasn't fallen on def ears.
It's interesting timing. I had a conversation with a wholesaler yesterday who wouldn't give me the address, because "the owner doesn't know we're wholesaling it." Really?
Call me crazy, but I don't know what he thought I was going to do with the address...look up the owner and contact him? Instead, this guy wants me to drive to his office to sign an NDA, then go with him and a cadre of other investors to see the property. Again...Really? I don't know who has time to waste on that kind of BS, but I certainly don't. Give me the address. All I'm going to do is run the numbers to see if there's enough meat on the bone to justify me spending my time looking at the property. It will take me < 10 min. Ridiculous.
Also, call me crazy, but I operate with full transparency. My sellers always know what's going on. If it is a current income property, the purpose of the NDA might be to not tell the tenant the property is being sold. That I could understand.
I write all of this just to say...there are a lot of people who do a lot of things to cover the fact that they're not being completely open and transparent with the people they are dealing with. For most SFR wholesale deals, there is no reason to have an NDA. That's my opinion, but I'll stand by it.
Yep, if somebody needs an NDA it means they have no contract on the property.
Investing Rule #213
Believe none of what you hear and only half of what you see. Investing is not unlike many industries...it's monkey see, monkey do. When someone tells you to "always" do something, ask them why? If they can't answer, that should be a good indicator they are part of Investing Rule 213. A seasoned investor should be able to explain exactly why so you can verify it independently on your own.
As others have said, the only reason to need an NDA on a SFR is because the party allegedly selling the property doesn't have it under contract and wants to protect themselves from a smarter investor who will actually get the property under contract so he/she has something to sell.
We have several of those larger "wholesalers" here too...they're spreading like wildfire because there are plenty of young, inexperienced investors who believe what they're told and fail to do their due diligence. I called on one years back and they said I needed to meet them at their office to understand their program. I told them I wasn't buying a program, I was buying real estate. Never heard back from them again. These companies will soon go the way dinosaur once the market corrects and the their are few new investors to take advantage of.
Updated over 3 years ago
meant so say, "when the markets correct"
Funny, please sign my NDA because I don't have a contract, that way, if you buy it without me, I'll sue you, go to court and admit trying to sell real estate without a license or having rights to title......yep, pretty funny! :)
Wow. I had no idea this would evoke such a strong response.
@Hattie Dizmond That makes perfect sense and I'd be a fool to argue with you.
@Guy Gimenez If it's one thing I'm learning about real estate its that there are thousands of rules. Let's face it, there is so much information online you could choke a horse with it. Part of my due diligence as a new investor is to try to figure out what's generally accepted as "the norm" within the industry and conduct myself accordingly. You said that they "believe what they're told and fail to do their due diligence." Does that mean I'm not supposed to believe what you're telling me either and go verify it somewhere else? I thought that was the point of these forums?
It can't be ignored that people within the industry encourage newbies to find a mentor. So, as a newbie, I give weight to the opinions of people that have more experience than I do (which is why we're having this conversation). So when someone that has that valuable experience recommends something to me, I make a note of it. In this case the advice I was given contradicts the general consensus.
To be completely honest, I'm really glad I brought it up because I've learned from it. Thanks again for sharing your collective experience with me.
Absolutely Dan. I will reiterate...don't believe me or anyone else...verify, verify, verify. Lots of folks here on BP can add value to your business, but many more simply appear to have knowledge and are simply misleading you and others. The point of the forums is to learn but how do you know the information you're being given is accurate? How do you know they have more experience than you? Because they have a lot of posts? Because they tell you they have experience?
Use the information provided here as a starting point, not the end point.
You'll find that about every 3rd thing you post here on BP elicits a strong response! Sometimes it's because it's a topic everything thinks they know about. Other times it's because someone...usually a newbie...as been told something as "gospel" that is either wrong or just an opinion. There are a lot of people who don't understand that their perspective is just that...theirs!
Opinions, regardless of how strongly held are just that...an opinion. I explained to my nephew a couple of weeks ago, as he (6-years old) was arguing with me about something that is a scientific fact, that choosing to believe something doesn't make it so. I told him, on a clear day at noon, that he could choose to believe the sky was red at that moment, but that didn't make it true. It's no different with RE. People can choose to believe something, but that doesn't make it true. They can choose to accept their own perspectives and opinions as fact, but that doesn't make them fact.
Most of the things you will hear referred to as "rules" are really only guidelines. The only "rule" you need to worry about - other than those that have legal opinions written about them - is that your reputation is the most valuable asset you will ever have, so never, ever jeapordize it!
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