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Hey gang, its Cody Sperber here, back again…
Today, I’m gonna devote an entire lesson to all the super smart co-wholesaling questions I get on a pretty regular basis. And maybe, just maybe, you’ll find the answer to your burning co-wholesaling question right here, right now.
After all, I’ve given you loads of helpful info in previous lessons and my awesome training call, and I’m not gonna let you down now.
Howdy, Partner
Even if you’ve been in this game for a bit and actually grasp the concept of co-wholesaling… it’s good for all of us to have a nice refresher every now and then.
So let’s get to it, shall we?
If you haven’t heard the buzz about co-wholesaling, rest assured it’s just a matter of time. It’s all the buzz, all the rage, or whatever the kids are calling it these days.
Point is, co-wholesaling is increasing in popularity because it’s a great way to do deals. It simply means partnering with another investor to do a joint-venture wholesale deal. Plain and simple.
Co-Wholesaling: You’ve Got 2 Options
Here’s how it works…
Option 1: You can go through other investors to find deals for your cash buyers, which means using your cash buyer’s list.
Option 2: You can go through other investors to find cash buyers for your deals through their cash buyer’s list.
See how these options are the same just reversed? I’ll say it another way…
Do you have a cash buyer ready and go to another investor who has a deal? Or, do you have a deal to bring to another investor who has a cash buyer ready?
See how you and your investor ‘partner’ each bring part of the scenario together? Either way, you’ll reach the same destination.
Here’s Why It’s a Good Way to Go
It’s a legit question… Why co-wholesale when you can just, well, wholesale?
Look, co-wholesaling is great when you don’t have access to vital resources. Plus, it’s a great way to make a name for yourself in the world of investing.
Maybe you don’t have the money, but you’ve got the time. Sound familiar? So why not spend your time uncovering hot deals to co-wholesale with another investor who can handle the financials?
On the contrary, maybe you’ve got an awesome cash buyer’s list and great relationships with those cash buyers but not time to find the deals. This scenario offers the perfect opportunity to ask other investors for deals you can share with your buyers.
The Fork in the Road at Profit Sharing & Co-Wholesaling
When it comes to profit sharing and co-wholesaling, it’s about either the mark-up or the middle split.
If you’re a seller, you’ll want to mark up your investor’s price and pocket the difference. This may be determined entirely by you, but be prepared for your investor to request a certain price.
The other option is for both wholesalers to split the profits 50/50. The right option is what’s right for you and your investor. There’s no one formula or evergreen answer here, so keep that in mind.
Is Co-Wholesaling High Risk?
Well,,,
There is always a chance that your investor could pull a fast one or change pricing. It happens. So, you’ve most definitely gotta protect yourself with paperwork, because spoken words and handshakes (sadly) don’t always mean truth and commitment.
Paperwork is just one of the necessary evils in this biz... and here’s what you need for co-wholesale deals:
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Purchasing/Selling Agreement (Goes without saying, but I’m sayin’ it anyway.)
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Assignment Contract that turns over the rights to another person.
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Option or Flex Contracts that provide flexibility through different options. I highly recommend this contract because it allows for both investors to have equitable rights and flexibility to sell.
One thing you don’t need – a real estate license. You don’t need a license to wholesale, right? Well, you don’t need a license for co-wholesaling either.
One Final, Important Clarification
It’s important for you to know that there is a difference between co-wholesaling the front end of deals and bird dogging.
The co-wholesaler finds the deal and is involved in the paperwork and contracts, but the bird dog has absolutely nothing to do with the actual contract. The bird dog is simply there to give you, the happy investor, the heads up.
Well, we covered a bunch of good stuff about co-wholesaling, and I hope it was all helpful for you. By the way, we have loads more where that came from, especially if you’re just getting started, so I encourage you to check out our amazing 30-day Quick Start program.
I’m All Ears…
If you happen to have any more questions about co-wholesaling, hit me up in the comments section below.
Familiarize yourself with the 2 ways to co-wholesale.
Decide whether you’ve got time to find the deals to bring to another investor or whether you’ve got a solid cash buyer’s list and want other investors to bring you deals for your list.
Protect yourself in co-wholesale deals with the proper paperwork and contracts.
Cody Sperber
is founder and CEO of www.CleverInvestor.com. He's successfully closed many different types of real estate transactions including wholesale deals, short sales, multi-unit, subject to, lease options and my own proprietary investing strategy, the Reverse Short Sale. As a new investor he quickly gained a huge competitive advantage by mastering online lead generation, building one of the most successful real estate investing firms in the Arizona market. His companies have bought and sold hundreds of millions in properties and closed hundreds of real estate transactions. Before real estate, Cody served in the Navy and attended Arizona State, and he is now married to his best friend and has two beautiful children (Hudson and Brynlee).