Can You Float ‘Pre-Contract’ Wholesale Deals to Your Buyers?

contractHey Insiders, JP Moses here…

One of my and Patrick’s favorite things that we get to do for our Insiders are our Insider coaching calls. They are second to none, because anyone who is an Insider can show up and ask us questions about anything REI.

In today’s special audio lesson, I want to spotlight a question we received from one of our Insiders not too long ago about the potential risks and the potential rewards of floating a pre-contract wholesale deal out to your buyers.

This particular coaching call happened to be about a short sale deal so some of our conversation danced around short sale topics. But the gist of it is that this gentleman had experienced a loss of a deal because of a decision he made and he wanted to know how he could prevent it from happening again.

Patrick and I really enjoyed the opportunity to toss a few good solid ideas out to him.

So, I encourage you to dive in and listen to the audio clip ripped right from our live coaching call. What you find here may surprise you.

What Exactly is a Pre-Contract Wholesale Deal?

What is a pre-contract, wholesale deal, you ask? It’s any wholesale deal that you have not signed your purchase agreement on yet. Technically, you do not have equitable interest in the deal. Wholesalers will sometimes toss deals out to their buyers before they have the contract in place.

  • Should you do that?
  • Should you not do that?
  • What are the potential risks and rewards?

Check out our answers to these interesting questions and more…

Hope you enjoyed that. There are a couple of things I want to follow up with that were not covered in the audio.

  1. In my wholesale business (House Guys in Memphis), we do not market property addresses – we market contracts. That’s a decision we made about a year ago. It appears the tide is slowly changing with regard to how safe it is for a wholesaler to market a property for which they do not yet have a contract in place (i.e. Equitable interest.) Some real estate commissions are beginning to change their opinion saying, “If you don’t actually own the property, you cannot publicly offer to sell that property.” That’s why we’ve made the change to market contracts rather than properties. This is a clarification that I want to be sure to make in addition to all that was said on this audio.
  2. Patrick also mentions a document that he uses to protect himself from unscrupulous sellers. We previously gave away that document to our Insiders. Check out this awesome lesson with all the details and the actual document.

contract 2Where Have You Been?

If you’re not making these monthly Q&A coaching calls, where the heck have you been? We do these on the 4th Wednesday of every month at 3pm Eastern/2pm Central. It’s an hour of power and awesomeness.

Make sure to mark the date on your calendar and show up for these things. It’s the only place where Patrick and I have an anything-goes, Q&A coaching session. And it’s reserved exclusively for our Insiders. Don’t miss ‘em!

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Got any more questions about today’s audio lesson? Talk to us in the comments section below.

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