Hope you guys are doing well today! Today I’m doing a very RARE post… where I’m just writing a blog post (and not recording a video)… so here goes!
In my short time being involved in the house flipping scene… I have seen the good, the bad and the ugly… when it comes to working with both seller, buyer, other wholesalers and cash buyers.
Coming from a background where I was an associate pastor for most of my twenties in the good, ole-fashioned bible belt of Tulsa, Oklahoma… my natural inclination was to be very trusting of people and always give people who I felt had “good character”… the benefit of the doubt.
But how many of you guys know that losing a few thousand dollars can be a Very QUICK and EFFECTIVE teacher? LOL!
Yes… I’ve been screwed in real estate deals before in the past… and while it didn’t leave a long-lasting bitter taste in my mouth — it did teach me ONE valuable lesson…
“Assume that anybody you deal with in real estate… when given the right opportunity… will screw you”
Now yes — I know some of you right now reading this post right now on your laptop, tablet or phone… while drinking your morning coffee… probably just got shocked, and big-eyed at the NINJA making the very notion that there are people out there that’ll screw you in real estate…
But, that’s the fact Jack!
You see… when money is involved… especially a LARGE sum of money… people who you would expect would act ONE way… can many times shock you… and do QUICK Dr. Jekyll and Mr. Hyde on you!
I decided to write this post.. because the last couple wholesale real estate deals that I have gotten and marketed to other wholesalers… I’ve gotten responses from wholesalers who have “WAY too much trust in their cash buyers”.
Some trusting wholesalers have come to me asking me, “I talked to one of my cash buyers… and they want the motivated seller’s name and number so that they can talk to them or deal directly with them. Is that okay?”
Some wholesalers have wanted me to connect their cash buyers… with my motivated sellers… on deals that I’ve been putting out there for JV (joint venture) deals.
So let me ask you this very IMPORTANT question:
If the cash buyer has contacted your motivated seller… and is building rapport with them and a relationship with them… then WHY on earth do they need you?
Basically to them… you are a middle-man (or middle-woman). If they cut you out of the deal… the cash buyer will be able to pay a little less money on the deal… and they can negotiate with the seller to give them a little more than what you were offering them.
That is why you NEVER… and I repeat, NEVER… allow the cash buyer and the motivated seller to be connected. Even though you have the property under contract… shady things can still happen.
SO HERE’S MY FREE ADVICE TO YOU, YOUNG JEDI WARRIOR…
When you have a good, slamming wholesale real estate deal under contract… it is IMPORTANT to follow these tips and principles.
If you do not follow the principles which I am going to boldly lay out there in plain view for you to read… I swear, I will track you and hunt you down… and do some really bad stuff to you!
Here Goes the NINJA’s 4 TIPS to NOT Getting Your Deal Stolen:
1. Never give the cash buyer or the motivated seller on your wholesaling real estate deal access to each other. This is a recipe for disaster.
2. When doing joint ventures with another wholesaler… where one of you finds the seller… and the other finds the buyer… always have a signed JV agreement between the two of you that specifically states who does what… and how you will split the money.
To be honest with you… at the time of this writing… I have 7 one-on-one students that I coach & mentor on the fine art of flipping houses… and even them, I tell them no matter how much you trust me… ALWAYS get a signed agreement from me on any and every deal we do together.
3. When you are working with extremely LARGE deals where a lot of money is on the table to be made… and you’re working with other wholesalers… make sure they sign NDA’s (non-disclosure agreements) and have them have their cash buyers sign them as well… before they receive any information concerning the property or properties.
4. On deals where their is a TON of money to be made ($10,000+), make sure you file a signed & notarized memorandum of contract down at your county courthouse.
A memorandum of contract basically states that you have an existing agreement to purchase a property… and if the seller reneges on their deal with you… and tries to sell the property to another party… they won’t be able to complete the deal… until they get you taken care of!
Later on… I will come out with a package of all of my real estate investing contracts… and will sell it for only $7.
If you’re interested… make sure you comment on this post below with your name and e-mail…
Have a good and a blessed day, NINJA’S OUT!
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