Double Assignment?? assigning another wholesalers PSA?

Question

Hey BP,

This might be confusing, I talked to another wholesaler who said when he co wholesales his deals, he signs the other wholesalers PSA, then sends a new PSA to his end buyer. In return, he still gets an assignment fee but the end buyer doesnt see both wholesalers assignment fees. Does this really work? I co-wholesale a lot of deals for other wholesalers and never heard of that working. I might sound dumb, but please let me know. It would be nice to have a clean PSA with only one assignemnt fee on there ( even though im honest with all my buyers about me co-wholesaling it)

Thanks! ANY HELP IS APPRECIATED!

Joe Villeneuve · Answer

Here are two ways to do this cleaner.  The 2nd one is the one I use:

1)  Have a 2nd agreement with the original wholesaler for the property in question, and here is the most important part,...record it.  This agreement can be in the background, but paid at closing since it is a recorded document.  You can't attach it to the property, but you can attach it to the Original Wholesale Agreement, as long as it is recorded.

2)  The Original Buyer (to be assigned) should be an LLC, then you just add your name as a member to the LLC before closing.  There is no "assignment" here.  What takes place instead is the LLC is sold to the end buyer, for the same amount as the what the wholesale fee would have been.  The new LLC owner, the buyer hasn't changed, it's still the LLC...under new ownership, executes the buy in the name of the LLC.  The Wholesalers then split the sale of the LLC.

If you want 12 eggs, and someone wants to sell you a dozen eggs instead,...don't argue.

Riley Hinshaw · Answer

Can you answer that as well please

Riley Hinshaw · Answer

So if I sent the original wholesaler a PSA of my own stating I'd be purchasing it but it is assignable, then turn around and have an end buyer sign a PSA, how would closing work ? Would the buyer only see my fee? And would a Jv agreement still be needed between me and original wholesaler? I'm just confused on how it would work in the sense of closing and actually getting paid and having a smooth process.

Thanks for your help!

Steven Leigh · Answer

I suppose it would work, but I would probably just sign a JV (joint-venture) agreement with the other wholesaler. It's a much easier way to operate. You basically just agree to split the profit from the deal. It can be a percentage, or "person A gets $1,000 and person B gets the rest of the profit" or just about any scenario you can write out.

This way one wholesaler can bring the buyer or whatever the value is but you don't have to add extra purchase agreements to the mix.

Joe Villeneuve · Answer

Sure it works, but that's like being asked for the time, and explaining how a watch works to answer it.