First wholesale deal questions

7 Replies

I was working as a bird dog for an investor who was quite dishonest, but that's another story for another day...While I was calling sellers for him, I connected with an out of state investor who is wanting to buy 4 plexes and asked me to contact him if I came across any and today I did. It's a steal of a deal and I would buy it myself if I could. I was going to contact him and give him the lead and charge a bird dog fee, but I think, I'm going to try to do it as my first wholesale deal instead.

I have several questions. The property doesn't need any repairs. So how do I analyse the deal?  I don't have to worry about figuring out any repair costs. Tenants are all in place with great rental income. Do I have to pay a earnest money deposit on the property when I do my contract and if I do, if the deal falls through for some reason, do I get it back? Secondly, I've been reading lately, that when I do my assignment contract with my buyer, that I should require him to pay an earnest money deposit. It makes perfect sense to me that he should pay one, so I know he's serious and doesn't leave me hanging at the closing table. Have any of you wholesalers done this with your buyers?

When I am talking to my seller, do I just  tell them up front that I am wholesaling the deal? Last question. lol...Where can I go to print up the correct contracts that I'm going to need for this? Sorry for all the questions and I appreciate any help!

Updated almost 6 years ago

I don't think I was clear in my first post. Just wanted everyone to know, that I formally cut ties with the dishonest investor over a month ago, so I'm not doing anything behind his back. Just don't want anyone to think I'm being dishonest.

@Kelly Howard , do you want to be labelled dishonest yourself? If the ONLY reason you made the first call was because you had an arrangement to give your leads to your "quite dishonest" investor, then like it or not, I believe you should give him that lead, and charge him that bird dog fee (I believe NC is fine with such arrangements - but please check).

How do you think it will end if your dishonest investor discovers what you have done behind THEIR back? The "but they were dishonest first" defense will hardly cut the mustard, will it?

Looks like you are not really ready to jump in at the deep end either?

You obviously need to formally end your dealings with said investor, but maybe AFTER this fee is sorted?

Chances are they won't get the deal happening anyway, by which time you should be better prepared when you re-establish communication with the Seller? [Not legal advice]. All the best...

Good points Brent.

Yes, she has some learning to do. You can get a free basic RE education, in 3 days you could be ready to become more active. 

I agree with Brent, don't burn bridges behind you!  :)

I'm sorry Brent and Bill. I guess I didn't give you all of my details. I formally cut ties with the dishonest investor over a month  ago, so I'm not doing anything behind his back...As for the 4 plex investor, I am  going to tell him that I am wanting to wholesale it. I don't think he will have a problem with that as we never discussed fees or any arrangements. He just casually mentioned to me that he is looking for 4 plexes and what he was looking for. 

I am not being dishonest with anyone. I am just trying to figure out how to do everything correctly since this is my first possible wholesale deal.

@Kelly Howard , that puts a bit of a different slant on it! So, instead of a "bird dog fee", you are looking to get a full-blown wholesaling fee - from the same "dishonest investor"!? Well in that case, good luck with your 3 day crash RE education. Starting.... now!

No Brent. The dishonest investor is totally out of the picture.... The investor that I am wanting to do this deal with is a totally different investor. He is just one of many investors that I had made a connection with. 

@Kelly Howard , then might still depend on what formal arrangement you had with your original Investor. Were you using their office space and phone when you first got through to this Seller? Were you receiving ANY remuneration? Did you have ANY written agreement? (Otherwise, why did you mention it at all?)...

I guess I shouldn't have brought up the dishonest investor at all. It was 1:00 in the morning and I'd been on the computer for hours. I'm sorry that I made things confusing. I think I was getting delirious. lol...But in answer to your questions, no, I worked from my home using my own phone, etc. I never received a penny from him...as far as our written agreement, it didn't even say that I had to work exclusively for him. It basically just stated what he agreed to pay me and that I agreed not to share any of his software or training materials.