Can you Wholesale a wholesale deal?

Question

If you know of a wholesale deal, can you wholesale it to one of your buyers? 
Like someone put it under contract already and you negotiate the price with them and then sell it a bit higher??

Thank you!

Ned Carey · Answer

Yes you can wholesale a wholesale deal.  As Timothy Rogers said a second wholesale fee can ruin a good deal. While it can and does happen, don't expect to make a business model out of it.

One of my good friends was at a settlement where six people got wholesale fees. I foolishly passed on it early on because I didn't think it was a good enough deal.

Account Closed · Answer

I've been "double flipped" more than once.  I would think I had a killer deal, get it into escrow with an end buyer, and think I had really scored.  Only to find out months later that my buyers did the same thing....sometimes making more than I did on their re-sale.  Thankfully it's been awhile.  I know values WAY better now.  I doubt anyone who has bought from me recently would accuse me of leaving money on the table.

Today's lending environment is incredibly restrictive, even with hard money lenders, so usually every leg of these transactions will require cash.  That being said, there is no shortage of cash in this market.  At least in the markets I work.  The shortage is in available properties.

If you know value and you can buy from a "wholesaler" and bring that to a buyer that will pay more?  I say go for it.

Naga A.  Is this one of those principal things?  Or is this your actual business practice?  Say I have a property and I offer it to you for $150K and you want it for $150K.  In fact you are thrilled with $150K.  Do you really care if I got it from a wholesaler for $130K, who got it from the seller for $100K?

I would stop taking you seriously as a buyer if you worried about my profit.  :)

Ned Carey · Answer

Tim Czarkowski It was on the edge of a very hot area when the market was white hot. This was back in 2004 or 2005 when people could make bad buys and still make money.

Kentha Stephens You should have started a new thread. because you question might get buried here.

It is all what you can negotiate. If your wholesaler doesn't have room to split the deal then you have to try to get something from the buyer.  There is nothing wrong with that if the deal is good enough. But remember , you earn a fee because you are bringing a better than average deal to the table. If it's just an average deal then why do I need to pay you?

Tim Czarkowski · Answer

Ned Carey Wow six people! There really must have been a lot of meat on it or the end buyer way over-payed. Amazing that 5 wholesalers in a row would under-price it. That must have been an interesting closing with all of them there. lol

Kentha Stephens · Answer

Hey guys, need your help.  I came across a wholesale deal that's under contract with another wholesaler. She mentioned that there's no room to share her small profit because of loans, etc. I'm pitching it to a interested buyer for +$5,000. How do or should I get that $5,000 paid to me? Do I tell the buyer that I added an extra $5,000 or does that come from the wholesaler when property is sold? If from the wholesaler, do I get a written agreement from her? Thanks!

Naga A. · Answer

Hey Jeff Smith,

Calm down.  Seem like you have misunderstood my post.   I was only talking about my experience.

My experience was that Wholesaler A and Wholesaler B approached me with the same property at the same time.  Wholesaler B saw Wholesaler A's deal somewhere, added $3000 profit to the price and tried to sell it to me.

I realized that Wholesaler B tried to make a quick buck off somebody else's deal.  Since then, every time Wholesaler approaches me with a "deal", I assume that is not his deal but it is someone else's (and usually, that is the case.).

I do not know where the Wholesaler D talk comes from, and that seems a very different scenario.

Jeff Smith · Answer

Is this some kind of joke or moral victory or something? A deal is a deal. If the numbers work for your business model all you are doing is losing the trust of Wholesaler D who brought you the deal if you try to go around him, yet you say it's a "trust issue". I suppose you don't find it important for your colleagues to trust you, only for you to trust them.

Also, where in this post did you get the idea that you had access to Wholesaler A? Any investor would prefer to get the "goods/item/property" from the "original seller" at the "cheapest price", but at the end of the day that isn't always "realistic" or a "smart idea" if it causes you to burn your bridges. You can't wave your magic wand and have Wholesaler A magically appear infront of you.

I am happy to know there will be more deals out there for other investors due to individuals like you letting your pride get in the way.

Account Closed · Answer

In that situation, wholesaler D at 75k or you walk from the deal.   You would walk?

Naga A. · Answer

Aaron Churnick

In that scenario, I would buy the property from Wholesaler A.  I do not know if it is principal things, but rather, it is more a trust issue to me.

If I find out a wholesaler tries to make a quick buck off other whosaler's property or from MLS listed property, I would try to skip him and buy from the source, i.e. Wholesaler A or MLS.

Account Closed · Answer

For the sake of being silly.   What if the property was worth 130k?    You really going to tell us you won't buy it from wholesale B?   Or wholesale D at 75k.    Or wholesale E at 80k.      Just numbers on a page, get the emotion out of it.

Can you Wholesale a wholesale deal?

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