The Jig is Up

[Jake Kucheck]

Ok- so here is a real life example of why wholesalers are, in my opinion, guilty until proven innocent.

I constantly get emails from a guy who from time to time has what sound like very good real estate deals. This particular one could be purchased at $365K and had an ARV of $550K, with about $60K in repairs. Those of you in So-Cal probably already know what property I'm talking about.

What DOESN'T make sense is the following:

1) I clued one of my fix & flip guys into it and he says "yeah, my friend has it under contract and I'm contracted to do the rehab".

2) It is listed in the MLS for well above the $365K, and appears to be in escrow.

3) I mentioned the anecdote in #1 to another investor, and he immediately recognizes the deal, and knows that the buyer didn't perform.

What???

Can one of you wholsesaling experts tell me just what is going on, who actually "controls" this deal and how ANYONE is actually getting paid?

Thanks in advance.

[James Hiddle]

How wholesaling works in simplest form:

1.Wholesaler finds buyers and finds motivated sellers
2.Wholesaler contacts seller gets property under contract after negotiating price for property
3.Wholesaler flips the contract to his end buyer
4.End buyer closes with seller
5.Wholesaler gets paid assignment fee

It gets more involved then that but that's what wholesaling is in a nutshell.

As far as the situation you described either the wholesaler was trying to assign a property from another wholesaler or he was doing something illegal buy trying to sell you a property he didn't have under contract.

Those types make us legit wholesalers look bad and those types should be locked up.