The Science of Flipping - Multiple Wholesalers In One Deal: What Do I Do?

Starting point is 00:00:00 Seven times. Seven times that happened in one transaction. And guess what? It closed and everyone got paid right on the HUD. What is up, everybody? Welcome back to the Science of Flipping podcast. I am your host, Justin Colby. And on this episode, we're gonna be talking about what happens when you are put in a scenario where there's multiple wholesalers in one deal. How do you protect yourself from it? And what can you do about it, if anything?

Starting point is 00:00:43 Stay tuned to listen to this video and if you have i don't even know why i said video we're doing a podcast episode but the reason why i said video is because if you have not yet subscribed to my youtube channel you should i'm actually doing these youtube or these uh podcasts also on video so they are just over on youtube so if you are listening to this right now and hearing all my massive mistakes which is all good on itunes then i'd also encourage you to go subscribe to my youtube channel youtube.com forward slash justin colby as i actually do this on video as well and they are there on a playlist that says the science of flipping podcast and then you can see me and engage with me and ask me questions it'll be super awesome so again if you're listening on itunes go to youtube.com forward slash justin

Starting point is 00:01:29 colby subscribe and start watching me give you this information on these episodes so let's jump in here about this not necessarily new but definitely a lot more common situation that comes about as wholesalers are now wholesaling other wholesalers properties. Follow me there? Wholesalers who are now wholesaling other wholesalers properties. In fact, the most assignments that I have had in one of my actual personal deals is seven separate assignments. What does that mean? That means I personally marketed to a seller. I negotiated.

Starting point is 00:02:13 I contracted the deal. I opened up escrow. I sent it to my buyers list. Someone on my buyers list said I will take it. They then sent it out to their buyers. Someone on their buyers list said they would take it. They sent it to their buyers. Someone on their buyers list said they would take it. They sent it to their buyers, someone on their buyers list, seven times.

Starting point is 00:02:30 Seven times that happened in one transaction. And guess what? It closed and everyone got paid right on the HUD. Now, this is a crazy story and not every deal is like that, but I will tell you roughly 10 times a month or more, I'm actually helping co-wholesale someone else's property. And that's because my buyers list is really, really good. I cultivate my buyers. I know my buyers. I know what they're trying to buy, where they're trying to buy the price points. I create the relationship and I'm able to sell properties that many other people aren't able to sell.

Starting point is 00:03:05 And for that reasons, people come to me asking if I'm willing to sell their property. I just got one today in Baltimore, Maryland. And guess what? I actually believe we're going to be able to get it sold pretty darn easily. I'll keep you posted about that. That all being said, it is a much more common to have two or maybe three assignments in your transactions so what can you do to stop this well first of all i'm not sure it's needed that you need to stop this um i at the end of the day as long as the transaction closes it's kind of irrelevant right if you can get the number that you wanted let's say you were trying to sell it for $200,000 and someone comes in and contracts it and submits earnest money at $200,000, do you really care that they resell it? I'm not so sure you should care.

Starting point is 00:03:55 The reality is if someone else can make some money on it and has a buyer that you didn't have that's willing to pay more than you are willing to pay, God bless them. High five. Let's do another deal together. But there are certain things you can do to try and eliminate that if you so feel you need to, and that is to force your buyer to submit their earnest money before anything else happens. Now, again, this is very difficult to stop it completely as they may take their buyer's earnest money and wire it in, etc is that has happened to me several times before but again i'm not certain that it needs to stop because ultimately as long as the transaction closes i'm okay with that now how does the transaction actually happen so if i'm marketing directly to the seller then i have a purchase agreement

Starting point is 00:04:44 with the seller it's a true a purchase agreement with the seller. It's a true purchase agreement, earnest money, the whole nine yards, inspection contingency, purchase price. And what I do is I'm assigning my contract over to my buyer. I make a couple calls, I shoot a couple text messages, I send some emails, and I say, hey, are you interested in buying this assignment? And they say yes. So what they will do is essentially they will go in and sign my assignment, which gives me an assignment fee in the transaction. And then they are taking over all of my terms of my purchase agreement. So there's a purchase agreement between me and the seller. And there's an assignment between me and the buyer. Well,

Starting point is 00:05:21 what happens if there's another buyer involved well the only other thing that needs to happen is to make sure that there is another assignment from your buyer to their buyer so you assigned it to your buyer they now are going to assign it to their buyer and that is it that is the end of the chain of paperwork. You don't need multiple purchase agreements. You don't need anything beyond just assignments to each buyer. And once you do that, then everyone gets paid on the assignment fee

Starting point is 00:05:55 in the HUD or in escrow on the HUD. So don't overthink this. This is actually a question that came up a couple times here in my coaching program. Even this morning, two students had questions about this as they themselves were going to be selling someone else's deal, right? They had a buyer that wanted another wholesaler's deal, and they asked me how to structure it, and I said, it's very simple.

Starting point is 00:06:20 All you need to do is get your buyer to sign your assignment at your price, submit earnest money, and then you sign the original wholesaler's assignment. That's it. So I want you to slow this episode down a little bit because unless you're watching me on YouTube, you might get a little confused as I'm talking. But essentially, it's just adding as many assignments from buyer to buyer as you need. There's only one purchase agreement. Everything else becomes assignments. That's really all. And again, do you need to stop this? No, I would tell you, don't worry about trying to stop it because again, if someone else has a buyer that you don't have, God bless them, let them make some money and go do another deal with them right

Starting point is 00:07:05 that's my perspective now here's what i like to be i like to try to be the last person i like to try to be the guy that has the buyer because the original wholesaler then will start to come to me and say hey you know can you send out my deal because you were the one that actually brought the real buyer so for all you wholesalers out there what i would encourage you to do is really build your buyers list really find buyers that can execute. Because if you do, then you have more opportunity to be able to sell other people's properties. And that's really where you can make some money for free and then turn the whole model into the model that I run. The model is simple.

Starting point is 00:07:41 Wholesale your way to wealth. Wholesale deals from other people, and then take that money, which is free. You're not spending any money on marketing. Take that money, and then reinvest it into marketing. Then go get your own deals, start wholesaling them. There will be no cost to it because you wholesaled some other people's deals that effectively paid for your marketing. Now you're able to take that marketing, get your own deals, which now is also free money. And then you can take that and buy rentals.

Starting point is 00:08:10 And that's exactly the business model I run right now as a moment in time. So hopefully this episode really helps you guys understand that whole thing. It's not the end of the world. It is very common and very, very simple. Everything runs through escrow. So again, if you have not yet,

Starting point is 00:08:25 go to my YouTube channel, youtube.com forward slash Justin Colby subscribe, because you can check out all of these episodes right there on YouTube. Make sure you subscribe so you can watch me rather than listen to me. But if you love iTunes and Spotify, stay tuned, keep listening as I'm dropping multiple episodes each and every week. I'll talk to you guys on the next episode. Peace.

The Science of Flipping - Multiple Wholesalers In One Deal: What Do I Do?

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