Has anyone ever had this wholesaling issue?

5 Replies

This question is for anyone who has ever wholesaled a property. Have you ever been in a situation where an investor pulled out of a contract when he/she saw how much you were making on the deal? What did you do?

@Modesta Lopez :

Modesta,

      Did you disclose to the buyer what you took the property under contract for prior to assigning the contract?  I don't agree with the buyer backing out of the deal but if you weren't transparent about the contract itself, and your profit, then I can see how an investor would be less than happy. Transparency is critical in your dealings as a wholesaler.. Now if they are balking at you profiting 5,000 off the deal then they aren't a real investor anyway. If you're making a substantial sum above that you should at least disclose the terms of your wholesale, so as to protect yourself from this type ordeal. Just a thought. I hope you work it out. 

Stuart

Originally posted by @Stuart Birdsong:
@Modesta Lopez:

Modesta,

      Did you disclose to the buyer what you took the property under contract for prior to assigning the contract?  I don't agree with the buyer backing out of the deal but if you weren't transparent about the contract itself, and your profit, then I can see how an investor would be less than happy. Transparency is critical in your dealings as a wholesaler.. Now if they are balking at you profiting 5,000 off the deal then they aren't a real investor anyway. If you're making a substantial sum above that you should at least disclose the terms of your wholesale, so as to protect yourself from this type ordeal. Just a thought. I hope you work it out. 

Stuart

Hi Stuart, 

Thanks for replying. I do not have a property under contract. I am doing my research as of now and was a little confuse on that. Do you tell both the seller and buyer what your profit would be? It's just that I've read stories where some investors earn more than $10k and it seems like that would tick an investor off.  

I've been on both sides of the transaction.

I once made over $28K wholesale fee on a deal. Buyer is OK with that because they're going to make over $60K profit.

I bought a house from a wholesaler once - he made over $16K profit on it. I am ok with that because I would make over $50K profit.

So, generally, real cash buyers should have no issues what the wholesaler is making provided the deal is a GOOD deal.

Originally posted by Account Closed:

I've been on both sides of the transaction.

I once made over $28K wholesale fee on a deal. Buyer is OK with that because they're going to make over $60K profit.

I bought a house from a wholesaler once - he made over $16K profit on it. I am ok with that because I would make over $50K profit.

So, generally, real cash buyers should have no issues what the wholesaler is making provided the deal is a GOOD deal.

 Makes sense Wendell. Thank you for replying!! 

@Modesta Lopez

Modesta,

   As long as there is profit for the investor on the back end of the deal, there is no reason for them to walk. I highly recommend being as transparent as you can be in the process, as this shouldn't backfire on you in the long run, as it is the ethical thing to do. Both sellers and investors appreciate the honesty and are more likely to do business with you again in the future. I hope you are successful in your endeavors.

Stuart