how to wholesale from a wholesaler

What I do is work with the fellow wholesaler in advance. I always try to have my fee come out of the net profit on the wholesalers side. I don't like to tack on my fee. Usually the wholesaler has already advertised his deal at his price. I don't like to be seen as part of a "daisy chain". This is just my personal preference. Another reason is to keep the deal a good deal for my buyer, not to add to the purchase price for MY buyer. If the wholesaler tells me I must add my fee to his price I move on to the next. Again, this is just my personal choice. I never add my "fee" to an existing wholesale deal.
So for an example, my fellow wholesaler is going to net $5000. I ask him how much will he pay me to bring him a buyer? I try and negotiate a 50/50 split.
$2500 to bring in a buyer. How easy is that! I also make sure that the wholesaler does not try and cut me out by going directly to my buyer on the next deal! I talk to my BUYER in advance. There is no benefit to my buyer to go directly to the other wholesaler. After all, I sold it to him for the same price the wholesaler had it listed for, right?
Then I explain to the wholesaler that my buyer works through me only. I don't use a written and signed Non circumvention agreement. Try collecting by going to court!! Again, that is just my personal preference.
As you can see, doing this co-wholesaling stuff is all about clear communication up front. With the idea being to build LONG TERM relationships with trustworthy individuals. Not just this one deal.
One final aspect of co-wholesaling. ALWAYS check out the wholesalers property. NEVER go by the wholesalers numbers. 99% of the time the ARV is high and the rehab/remodel costs are estimated low!! Don't give your trusted buyers a lousy deal to look at. Your fellow wholesalers bad deal can hurt YOUR credibility. There is usually a reason your fellow wholesaler has not been able to sell the property to his own people.

Just my way of doing it, hope this helps,

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

i agree with your thoughts on this. the property hasn't been advertised yet, he let me know he had it BEFORE he had it. he knew me well enough to know i wasn't going to try to snake him, no future in it. they may get me once, but if they are unscrupulous people i won't ever deal with them again. i do know this is a sweet deal though because it has alot of positive cash flow with just the lower unit rented. medium rehab on 2nd floor(their words). waiting to look at that to see how accurate his rehab brain is lol.
i just didn't know whether to do a back to back closing or how to best wholesale it. thanks again for the input michael, i'm trying to pick up the pace.
keep moving forward, rob

It's great to work with legitimate wholesalers. As you know, keeping your pipeline full of good deals is the key to being a successful REI. We look for deals anyway and anywhere we can find them.

Good luck!
Michael

Thank you for sharing those great tips to co-wholesaling!

again thanks for the input and by the way, we look for deals and more importantly buyers in Md., De., NC, and southern In. so if you have a need for our services i'd like the opportunity to learn and grow with you guys.
keep moving forward, rob