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The Case of the Dead Wholesaler Part 2: The Missing Earnest Money

Updated: Oct 18, 2022

In part one of the case, you met Rea L. Estate and learned why going direct to sellers will kill your business. Because the leads are too expensive and it puts your whole business under sell pressure.

Today, we’re going to follow Detective Jamilock as he goes to Rea L. Estate’s office and finds the next clue.

Let’s rejoin our story already in progress…

As we walked out into the desert night, I got a bad feeling…

Something felt off…

I checked my trusty phone, full battery; I was not going to get got tonight.

“I’ll drive. Tell me how to get to your office,” I said.

As we drove through the Phoenix night, Rea laid her sob story on me.

Phoenix, AZ at night

She didn’t have enough time.

The leads were too expensive.

She had to do everything herself!

She was a one-woman business!

I had heard it all before, so I just shook my head and said “Excuses.”

I didn’t want to be a jerk, but after working with wholesalers for almost a decade, I knew that you could make excuses or you could make money and you had to choose.

We arrived at the crime scene, I mean her office.

It was a small converted guest room at the back of her 2+2 ranch-style home in North Phoenix.

The smell of stale coffee and no deals hung thick in the air like cigarette smoke.

I walked around Rea’s “Office Space.”

Her desk was a mess.

There were post-it notes and crumpled up papers everywhere.

The classic “Hang in there” kitten poster was on one wall and the other had a list of goals that had clearly never been reached.

“Nothing sadder than a list of unrealized goals,” I said to no one in general.

Then I saw it…

The clue I was looking for.

What appeared to be a crumpled assignment contract in the trash can.

I put on my trusty gloves and reached past the takeout boxes and empty diet coke cans.

As I pulled the contract out, it confirmed my suspicion…

Rea had gotten a house under contract alright.

Only she wasn’t able to find a buyer and ended up losing her earnest money deposit.

Over $1,000 GONE just like that…

If I said I’d seen this a thousand times, I know I’d be underestimating.

I shook my head and sighed.

“I’ve seen this before. You get a house under contract and you think you’ve got something. But what do you actually have?”

Rea looked at me puzzled.

“You control the house?” she said, unsure of herself.

“Most people think that,” I replied. “But the problem is that when you get a house under contract, the clock starts. Now you’ve got 10 days or 14 days or whatever the contract says to make the sale.”

Rea nodded. “And if you don’t get funding or find an investor, you lose your earnest money deposit.”

“That’s right," I said. "What most people do wrong is they wait until they have a house under contract to find buyers. Then they’re running around like a chicken with their head cut off trying to find a buyer. ANY buyer.

"And that’s when you start working with wannabe investors or getting scammed…. But this is actually backward. You want to build relationships with investors first so that you have a network of investors ready to fund your deals."

Rea looked confused. “ How do you do that?”

“It’s a complicated situation,” I said. “On one hand, you have your contract. I personally have invested 5 figures into creating the BEST most flexible contracts for wholesaling in the world. I’ll share those with you Rea. But it’s NOT just the contract.

"People think contracts protect you, but a contract is only as good as the person who signs it. My ex-wife taught me that. Have you ever heard that real estate is not about what you know, but who you know?”

Rea nodded.

“Who’s on your team now? Who has your back? Who do you talk to about real estate and deals?” I asked.

Rea started to cry “I don’t have a team," she sobbed. "I try to talk to my husband, but his eyes just glaze over or he wants to know how much I spent that month.”

“I had a feeling. You've seen one dying wholesaling business, ya've seen them all, I tell ya. Bag that contract up and bring it with us.” I said because that seemed like what they do on crime shows.

Rea put the contract in a sandwich bag because that was the only bag in her place; after all this isn’t CSI Phoenix.

“Ok, take a minute to think about your best pitch because I’m about to introduce you to the League Of Extraordinary Wholesalers.”

And we walked off into the night…

P.S. If you’re spending a lot of money on leads or getting houses under contract but can’t find cash buyers then you NEED to come to Phoenix this April 1st-3rd for the Astro Mastermind.

We’re making it even easier to come this year with an Early Bird discount. Get the details here.


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