How to wholesale someone else's wholesale deal

Wholesaling
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How to wholesale someone else's wholesale deal

Jeff Fairchild
Real Estate Investor · Vancouver, WA · Member since 2008 · 387 posts · 8 votes

Ok, I've heard of people doing this before, but I'd like to know the steps I need to take. I have a wholesaler w/ a property under contract for $95k. He is asking $110k for it. From my analysis I can sell it to an investor for $120k or so.

My question is, what are the detailed steps that I will need to take and what forms will I need to fill out to make this happen?

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Richard Lorenzen
Real Estate Investor · Member since 2009 · 53 posts · 1 vote
17y

I do these deals a lot. I've used flex options, but I didn't like them because if the end buyer is using financing to buy the property the amount of cash he has may be limited which limits how much you can charge him to assign the flex to him.

Drawing up a PSA between you and the wholesaler doen't work if the wholesaler is doing an assignment and not a double close so I didn't find that method helpful. There could be another way around it, I don't know.

The method that works best for me is signing a JV (joint venture) agreement between me and the wholesaler. The JV contract specifies how much my fee is. When I get an end buyer, I have the wholesaler send me the assignment contract which I forward to my end buyer and then get my buyer in touch with the wholesaler. When the deal closes the wholesaler sends me a check for the specified fee.

There are probably other ways to do this, but this is what has worked for me.

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  • James Hiddle
    Altus, OK · Member since 2008 · 2k+ posts · 690 votes
    17y

    Use a flex option than market to your end buyers once you get an end buyer that wants the deal turn the flex option to a PSA with the other wholesaler than flip that to your end buyer.

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    17y

    Jeff,

    I have done transactions like this before. You have your buyer sign a contract with you just as they were buying from you and it would help if you used the wholesalers closing attorney and make sure all parties know what is going on. When you go to close the attorney will make sure the money is assigned properly. Thats all I can tell you.

    Curt Davis - KAIZEN Realty538 Reviews
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  • Jeff Fairchild
    OP
    Real Estate Investor · Vancouver, WA · Member since 2008 · 387 posts · 8 votes
    17y

    It seems a little odd to me that the wholesaler would get a purchase agreement and then I would purchase it from him w/ a purchase agreement too even though he doesn't own the property yet. So the title company just figures it out I guess?

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  • Richard Lorenzen
    Real Estate Investor · Member since 2009 · 53 posts · 1 vote
    17y

    I do these deals a lot. I've used flex options, but I didn't like them because if the end buyer is using financing to buy the property the amount of cash he has may be limited which limits how much you can charge him to assign the flex to him.

    Drawing up a PSA between you and the wholesaler doen't work if the wholesaler is doing an assignment and not a double close so I didn't find that method helpful. There could be another way around it, I don't know.

    The method that works best for me is signing a JV (joint venture) agreement between me and the wholesaler. The JV contract specifies how much my fee is. When I get an end buyer, I have the wholesaler send me the assignment contract which I forward to my end buyer and then get my buyer in touch with the wholesaler. When the deal closes the wholesaler sends me a check for the specified fee.

    There are probably other ways to do this, but this is what has worked for me.

    1Reply
  • James Hiddle
    Altus, OK · Member since 2008 · 2k+ posts · 690 votes
    17y
    Originally posted by Richard Lorenzen:
    I do these deals a lot. I've used flex options, but I didn't like them because if the end buyer is using financing to buy the property the amount of cash he has may be limited which limits how much you can charge him to assign the flex to him.

    Drawing up a PSA between you and the wholesaler doen't work if the wholesaler is doing an assignment and not a double close so I didn't find that method helpful. There could be another way around it, I don't know.

    The method that works best for me is signing a JV (joint venture) agreement between me and the wholesaler. The JV contract specifies how much my fee is. When I get an end buyer, I have the wholesaler send me the assignment contract which I forward to my end buyer and then get my buyer in touch with the wholesaler. When the deal closes the wholesaler sends me a check for the specified fee.

    There are probably other ways to do this, but this is what has worked for me.

    I might try that and see if that works better than flex options.

    0Reply
  • Randall Rose
    Real Estate Investor · Tampa, FL · Member since 2010 · 28 posts · 8 votes
    16y

    Bumped !

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