Aspiring MFR Investor - Kansas City, MO · Member since 2013 · 79 posts · 7 votes
Hi BP,
Can someone explain to me the relationship between the Wholesaler and the Investor?
1. Do they (wholesaler) negotiate on your behalf with the seller for the terms? Or does the wholesaler and seller already have their terms agreed upon prior to marketing to an investor?
2. Do they provide Warranty Deed or do I need to figure that side out (seller finance)?
3. What is a fair “finder’s fee” to pay (%)? For ex. The total selling price was $17k of which $1k “fee” was built in.
4. Or do they simply present an opportunity and I figure the rest out?
I feel as though my ignorance has cost me an opportunity today.
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
13y
Originally posted by Michael Spindler:
1. Do they (wholesaler) negotiate on your behalf with the seller for the terms? Or does the wholesaler and seller already have their terms agreed upon prior to marketing to an investor?
Depends. Sometimes I find a great deal and send it over to my buyer asking what he will pay. Sometimes I send it to him and tell him what I want. In the past, I have done area specific marketing as a buyer for investors looking for certain criteria at a specific price point. Amongst many other things, I am currently marketing for a condo for a friend's daughter.
Originally posted by Michael Spindler:
2. Do they provide Warranty Deed or do I need to figure that side out (seller finance)?
Depends on your state. We don't have warranty deeds in CA because we stole this land from the Mexicans. We can't warranty anything. We use grant deeds. I rarely do double closings. In my deals, the seller closes directly with my buyer. One in fifty ever questions the name on the deed.
Originally posted by Michael Spindler:
3. What is a fair “finder’s fee” to pay (%)? For ex. The total selling price was $17k of which $1k “fee” was built in.
If you listen to the wholesaling presentation I gave at the BP Conference, the correct answer is "as much as you can get." If I paid $100 for a house and could wholesale it to another investor for $100,000 and he can still make a reasonable profit on it, why should I take any less?
Originally posted by Michael Spindler:
4. Or do they simply present an opportunity and I figure the rest out?
If you are the investor, it is up to you to decide if the property meets your criteria and if you think you can make a profit on it, so essentially, yes, the wholesaler presents you with a property, hopefully priced below market with enough meat to cover repairs, holding costs, selling expenses, and a profit for you, but you figure out the rest.
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
13y
1. You and the seller should have an agreed upon price under contract before you start marketing for an end buyer. This will protect your rights and interest in the deal.
2. Your Title Company or Closing Attorney should be able to figure out for you the Warranty Deed. You must give the title company a copy of your agreement between you and the seller.
3. Well what's fair? The answer to that question is, is whatever you think is fair.
Normally on a wholesale deal the wholesaler trys to make a minimum of 5K! I usually pay my bird dogs 1K once I close on it for finding me the deal.
4. Truthfully you will have to be the one to figure out if this an opportunity worth pursuing.