“Duped on a Double Deal – Don’t Let It Happen to You – Part 2”

This is the second Part of the article entitled ““Duped on a Double Deal – Don’t Let It Happen to You – Part 1” where an investor was gracious enough to tell her account of how she was duped by a professional wholesaling firm who had a reputation of duping new unsuspecting investors. Please don’t let it happen to you!

I spoke with the Realtor? several times and told them that we have a contract and the seller has to sell the property as he was aware of the mortgage balance he had on the property and also aware of the liens.

Normally when I assign contracts the seller has no knowledge of the new buyer until the closing. I like to keep control of the deal so my seller and buyer never speak or meet even at the closing if possible. When I told the wholesaler that the seller was giving me a hard time and that he didn’t want to sell the property anymore the wholesaler got pissed because I know that they already had resold both properties to another end buyer.

The wholesaler kept asking me day after day for the Realtor’s? contact information and I kept telling them that I would take care of it. They said that if the seller didn’t sell they are going to file a lawsuit against me for Breach of Contract. I decided to do a couple of conference call with the wholesaler and the Realtor? and I introduced the wholesaler as my partner. That was a big mistake because the wholesaler proceeded to start pressuring the seller directly.

There was one time that I know that I was in a meeting and the wholesaler texted me saying that "their attorney wanted to speak with the seller". They then called the Realtor? direct. At this point the seller got a local Real Estate Investor involved to help him in the process.

When the wholesaler saw the closing HUD statements, they saw how much I was making on the deal and called to tell us we were making “Too much!” In my opinion I was making peanuts. I believe strongly that the wholesaler basically ended up telling the seller that I was assigning the contract to them for $10,000+ amount and that he can make more money by selling it directly to the wholesaler.

Actually, I know this happened because the seller’s investor friend told me and basically also mentioned in exact words that I was dealing with scumbags and they are really not my partners because they are trying to cut me out of the deal and buy the property directly from the sellers. Both properties were supposed to be closed by the end of last month.

I went and filed a Notice of Interest on both properties. The unfortunate thing was that with all the back and forth I was out of contract by a few days.

When I looked back at the tax records Property #1 was purchased for over $20k and then resold shortly thereafter for a profit of about $5,500 of which I got nothing. Property #2 was sold on for over $30k and resold for a profit of about $8,000 of which I did not get anything.

I forgot to mention the part where the wholesaler yelled at me and said that I was new wholesaler so it’s either I take a total of $2k on both deals or they will never do business with me again and tell other people that I have a bad rep. That’s when I told them that the Release and Cancellation of Contract for both properties were on their way.

I should have called you sooner to explain the situation and do what you later told me to do to get out of the contract. I know that if I was able to get an extension I would’ve been able to find another buyer. I’ll know better to use your clauses and terms in my contracts to better protect myself.

As always, thanks for your priceless help, I just should have asked sooner.

This wholesaler is known for these tactics and gets away with them most of the time. Do not call me and ask who they are and that’s not reasonable as they will say there is two sides to every story and I am sure they have theirs.

Is this incident a rare happening or something more? In this case the wholesaler has a reputation of deal stealing using this same tactic of by passing the investor who is selling the property he has under contract.

What has been increasing disgusting lately has been at least three local investors who get on other investors’ wholesale lists and when the investor puts out a property, these rogue wholesalers immediately go to the seller of the property to try and make a deal – bypassing the investor/seller.

This is where a Notice of Interest can be somewhat effective in clouding the title and saying the sale. Be careful out there!

Once again, many thanks to this investor for talking about what happened in this situation so other investors can be wary of what some wholesalers do to take advantage of less-experienced investors.

To your limitless success,
Dave Dinkel