Wholesaling to a wholesaler

Got a deal under contract as a lease option which I initially intended to assign to a tenant/buyer (ie “cooperative assignment”).

Well a wholesaler contacted me and is interested in wholesaling it for all cash, and the seller would be tickled to death to get this thing sold outright. based on the wholesaler’s offer the numbers make sense and I can make about $5,000.

My question is this: what’s the cleanest, easiest way to get this done so I can make my $5k bucks and be done with it? Should I get it under contract and assign it to the wholesaler, who in turn assigns it to his end buyer? Sound complicated. Or perhaps should I sign the deal up directly between the seller and the wholesaler, and draw up a simple agreement between me and the wholesaler for my cut? I could protect my interest with a recorded affidavit.

If you find a tenent/buyer you can possible make that 5k from Option consideration deposit, which is nonrefundable, then you will make the cashflow every month, then you get get the end $$ when the tenent buys the houses.
If you wholesale it then you only get 5k and thats it, move on to the next house type of things.
So the question is do you want to take the time to find a tenent/buyer so that you get three times the amount you will get with assigning the contract.

If you assign the contract you get get taxed for the 5k. So the better option here is to find a tenent/buyer. That would be what i would do. All depends on what you like doing.

Great point Jeremy. However, I failed to add - the seller would most certainly prefer to just get rid of it altogether, and there’s not much room in the potential payment spread or equity spread to make a sandwich lease option worth my time so I was just gonna assign the lease option anyway. So essentially it works out the same. I hear you on the tax thing though LOL.

Spoke to the wholesaler last night. We decided to both sign the contract as co-buyers then simply assign it and split whatever profits we get.

Why wouldn’t you just wholesale the deal for more money and cut the wholesaler out of the picture? It sounds like there is more money on the table and your selling the deal too cheap.

Good question. In my opinion the deal isn’t priced wholesale to begin with. By my book, anything over 60% of ARV is not a true wholesale deal. This house is somewhere around 80% but it’s in good condition. He claims to have retail buyers lined up and a big-money partner, etc so I say hey, give him a shot on a non-exclusive contract and see what happens. Doesn’t hurt me at all. Besides I don’t have a wholesale buyers list to speak of - 95% of my list are tenant/buyers looking for rent to own homes.