How to protect my profit in Co wholesaling

Question

Hi everyone, I am trying to do co-wholesaling but the problem is that most wholesalers don't accept to sign a contract with me when they even haven't opened the escrow yet. They have the property under the contract and that's it, they tell me: bring the buyer and if we sell the house will give you a fee, or say: add your fee to the purchase price and get it from the buyer. I feel something doesn't make sense. what if they don't pay me at the end? How can I keep track of which buyer they are going with? or how about if the buyer and them come to an agreement to split  my fee and not paying me ?  I am a newbie in this business and don't want to spend hours and hours behind the computer , finding buyers and not getting paid . I appreciate your advises , Thanks in advance

Scott Schechtel · Answer

Be sure to get a non-circumvent agreement signed by your wholesaler and have an attorney look it over. It might need to have something like .."The parties to this agreement warrant and affirm they may legally, and agree to hold one another harmless in the event they may not legally, pursue the purpose of this agreement."

Venus Moshtagh · Answer

Thanks Mitch, A silly question: how to get the HUD-1 when there is a no opened escrow yet and no specific buyer ?

Mitch Messer · Answer

Hi @Venus Moshtagh. Before agreeing to work with any wholesaler, find out who else they've done co-wholesaling deals with in the past. Get names and numbers and then call these people and find out exactly what happened and how. Be thorough!

Smart and experienced wholesalers understand that cheating folks out of a fee is silly, unproductive, and self-defeating. Still, there are crooks out there, so you need to protect yourself.

When we co-wholesale, the fees are specified right there on the HUD-1 and are paid at closing by the closing attorney. You shouldn't accept anything less!

Good luck! Now, go get yourself paid!