Co-Wholesaling issues that are bothersome

i'm with you on that one....it's all about their integrity...and some have none!

hang in there.

Linda

I noticed that as well. It's pretty disheartening

I'm with you completely, and I thought they only did that here in Cleveland. I don't know why most wholesalers don't understand the concept of repeat business.
Hogs get fat, Pigs get slaughtered.

OR THEY TRY TO PAY YOU KIDS FEE,I AGREE 100%.

I have to agree that there are a BUNCH of greedy people in this business and they don't see the big picture "our way." Remember tho, they may be looking for that 1 quick home run for a number of reasons that you don't know. There could be bills to pay or emergencies that need a lot of cash quickly, etc. We just never really know their side of the story.

Having said that tho, here's an idea that may help. Suggest that instead of working on a flat fee, explain to the co-wholesaler that you have a vested interest in your buyer's success because they have committed themselves to multiple properties from you. Explain that your agreement with your buyer is a percentage of the sale price as your fee so if the fee is too high by adding your share, your buyer will walk or will just wait for the next deal. ( Remember what Greg Murphy always says "Leave a lot of meat on the bone."

Now, you can explain that you would like to work with this wholesaler again but there needs to be an equitable agreement between you both that works in both your favors ie. 50/50, 60/40, etc. Explain that by doing this your way, they could make a lot more money because they will be selling a lot more and you know you'd be selling more because you have the buyer already. "This is the new way of doing business." (You could also throw in that "a higher priced house would then make you both a higher fee.") If the wholesaler is better at finding deals than buyers, this will work to your advantage.

If this is not agreeable with the wholesaler, just walk away knowing that you did the right thing not just for you and your integrity but for your customer as well. They (the wholesaler) should know that they've lost a customer unless they change their practices. In any business, losing customers is not a good thing unless they are bad customers. Bad customers can ruin a business. Unless this person changes the terms, I'd consider them a bad customer for you.
My business model has always been to have the customer wanting more of what I have. I've sold a lot of product because of that. Let your buyer's know that you are looking out for them as well as yourself.

That's my 2 cents. I hope it helps.

Andy Sager
DG's AndyS

To take a little many times or a big chunk once and you are out. I agree with you Tammy, but you should be used to it by now. There are a lot of wolves in the trenches...Jan

For all those reading this if your tired of greedy people then your working with the wrong investor come work with us! We will make sure you get paid the right amount for bringing half burger pattie for the buns! We work Nationally and would love to work with you and show you there are some of us Investors out there ready to make you some serious money!!

email me at amurietta at gmail dot com

Lets Create Success and Wealth Together!

Albert M.
Real Estate Investor

As you know, I do this all the time. I have a network of fellow wholesalers that use my buyers list. It's funny, when I have a property I NEVER need their buyers. Go Figure!
They know I do NOT add to their price. Thus creating a daisy chain! I ask them up front, what they will pay me to bring them a buyer. If they say nothing, you have to add your fee, I say no thank you! A lot of times my buyer may have already seen this deal and if I were to put it out there for more money than I lose credibility. I then ask if they are the ones that have the contract. In my area if the property does not move in 5 to 7 days, it is overpriced anyway. Most of the stuff I see from fellow wholesalers are not real wholesale deals. If they have paid to much and have no room to add my fee, I move on to the next one. I just don't waste my time trying to pound round pegs into square holes! haha! This is business! If it won't work it won't work. On to the next one!!

Now, with that said. Which do you think is the most difficult to provide? 1. A true and real wholesale deal that you have under contract. 2.The buyer for a true and real wholesale deal? I feel providing the buyer is NOT on the same level (50/50) as providing the deal, not even close. If a wholesaler offers me 50% of his fee to bring a buyer I say thank you!! But I don't expect or ask that amount. Like I said, I let them tell me what they will pay me before I ever look at their deal.

GREEDY?? They may not be greedy at all, they just paid to much and it is not a deal! That is usually the case. We usually don't know how much work and how long it took them to get the property under contract. If they have closed and actually own the property we do not know their money and holding costs. Their fee might be $20,000 but they have $17,000 in paid expenses.

Most of the REAL wholesalers in my area understand repeat business. If they do not, they won't be around for long. One or two deal newbee wholesalers are the ones to watch. They have no clue. OR they are part of a huge daisy chain
where one investor has a property that a newbee tries to sell to another newbee that has no buyer trying to sell it to another newbee that has no buyer and on and on. That is why with one of my first questions I verify that I am working directly with the wholesaler that has the property under contract or owns it. 75% of the time a "greedy" wholesaler is trying to wholesale a deal that is not even his!! These guys aren't greedy, just dumb!! I will only do a "co-"wholesale if I am putting my buyer directly together with the person that controls the property.

Tammy, congratulations for taking on co-wholesaling. It really is the easiest strategy in RE. Someone provides the deal(the hard part) you supply a buyer (no risk) and you make some easy money. You just have to get the bugs worked out. Remember, this is a business, you MUST deal with people (buyers and sellers) accordingly. Fair and upfront in a friendly manner and don't spend days, weeks and months pounding round pegs into square holes. Say thanks but no thanks if you have to and move on the SAME day!!

Still looking for the right one out here for us to rehab. My last two were listed and sold. One went in 4 hours!!!! Full price offer!!! So I am looking for 2 for myself, 1 for us and 6 to 10 for my buyers!!! Working on doing a scrape of an old duplex I bought. Want to build a 1.2 million attached family duplex and sell them. This has proven to ba a HUGE undertaking!! The permits and plans must be submitted to the city for approval. Zoning must be updated. I was planning on breaking ground on the day of closing. ha ha ha! The city government is involved! My developer says 90 days will be a short wait. The 120 day construction time turned into 6 months, so we are at a minimum of 9 months if we are lucky.! I may just sell this property to my developer. What an education though. It is on a way different level that rehabing houses. I may just stick to rehabbing houses!!

Michael Mangham
MD Home Acquisitions LLC

I agree with Andy-you really don't what's motivating them. I think quality is always better than quantity, no matter what business you're in. Live and Learn!
Jim

if the deal will affect the relationship you have with your buyer, I would walk away, and say thanks, but no thanks!

You're better off looking for other deals for your buyer than giving him this so so deal, for 3K??!! not worth it!

Learning and progressing every day,
Valerie

I see this all the time down here in Florida. The good thing is the network of people I work with are more than happy to share their fee if you have the buyer and they have the prop. i think you hit it home with the title of this thread....GREEDY!!!!! Unfortunately for those that are greedy it will be their demise because you get how you give and you will be treated as you treat others. Thanks for the thread and hopefully people will read this and it will sink in.

Hi everyone,

Wanted to update you on this situation and show how greed stabs you in the arse. After I sent the fee agreement to my buyer he looked at it and told me that he will *NOT* buy this property unless the original fee the wholesaler was charging is split in half between her and the one bringing the buyer and remove the extra $3K. She was shocked, but in the end, the one with the money has control. He was literally going to walk away from the deal if it wasn't changed; he said he can just go on to another one. Love this buyer!!!

Keb, I did my own website via www.Vistaprint.com.

That's great! I'm also doing the wholesaling as well. I have about 100 pending offers in on homes right now.

I don't know if I agree with you on the deal being harder; this wholesaler had this deal for over a month and half under contract, so obviously did not have a buyer for the property and would lose it w/o the buyer. When my buyer saw the fee and then mine added on, he was feeling the same thing I was.

I'm working on 6 co wholesales this past week! I usually only want 1-1.5% of the PP for my fee to bring in a buyer, but when you have a buyer that is purchasing a lot of properties a month, you don't want to see that buyer pay more than s/he should have to. I thank you for your advice and yeah, I learned from this to always ask how much they are already marking it up. I did ask up front if my fee could come out of the markup and was advised there was no room, to add my own. Then the fee agreement was drawn up, and , yeah, no room my butt.

How do you base your fees Michael, I'm wondering? Do you base it off of the PP or the spread in the deal?

I love it! You have wonderful advice for all! Very eloquently put!

He who has the gold makes the rules....he who provides the buyer should be entitled to half of the fee. I f you are thinning out your buyer's resources for part of another deal, he may not have enough resources to take care of one of your own deals. You need to be compensated for that risk. Did you use a non circumvent non disclosure agreement that you are entitled to half the fee on future deals if he uses the buyer you introduced him to? You have just provided him with a huge resource.

Tammy your persistence and integrity and that of your buyers did win out in the end. AND prayer doesn't hurt either.
Judi

Tammy, you did the right thing!

This reminds me of something I listened to on Success CD (from the magazine). Instead of thinking to sell to everyone you know, think about helping others. If you follow that mindset, I believe whatever you do will be the right thing for you and for others. Dean's mentioned this as well, we're trying to create a win-win-win situation, and if you honestly believe everyone comes out ahead (now and in the future), that's all that matters

Yellow letters! Yeaaahhh HA!

I'm making up marketing for my first Rent to own, got my first one under contract specifically for wholesaling (but its looking so good to me I want to keep it so bad! LOL) and have about 30 offers pending at any one time. Not to mention all the other stuff I have going on.

Loans and rentals... Oi vei! LOL

It get's you nowhere, sometimes. I have NO problem partnering with others, and 1/2ing the fee if they have an interested buyer. Or whatever the fee works out to be, I'm flexible. It the others who either aren't flexible, don't understand how to do the due diligence on the numbers or the property seems a little over-priced.

Co-wholesaling can work, if it's done right. Way to go, Tammy! You knowledge gets better with every experience. You will succeed at this! I have faith in you.