How do you verify that a wholesaler offering a JV split actually has the closing history they claim

Question

A common situation for anyone crossing from construction into acquisitions is being confident on the rehab side and green on the paperwork side. Say a tired landlord lead comes through an old contact, and a wholesaler offers a JV on dispo with a 50/50 fee split, claiming a long closing history and asking to be trusted on process. Asking for HUD statements or settlement statements from recent closings before signing anything is not rude, it is standard diligence in this business, the same way a GC would expect a sub to show proof of past work before being handed a project. A serious operator will produce them without offense, redacting sensitive figures if needed. Someone who resists that request, or has nothing to show, has answered the underlying question either way.

Rena Guide · Accepted Answer

It's a normal ask. Anyone who does volume gets asked and has the files ready.

What to ask for, in order of how much it tells you. First, two or three closing statements from assignments he's done, sale prices and fee visible, the rest blacked out if he wants. Second, the name and contact of the title company or closing attorney he uses most. Call them and ask whether they close his deals regularly. That call is the single most useful thing you can do and it costs you nothing. Third, a redacted example of a signed assignment agreement with one of his buyers, which shows he has actual buyers rather than a Facebook group.

One thing to keep straight: proof of funds is a letter saying a buyer has money, and transactional funding is short-term money that funds a double close for a day or two. Neither one is evidence he can sell your contract. Closed files are.

Ask him what happens if the deal dies after he's spent time on it and after you've spent money on inspections or an extension. Get the answer in the JV agreement, along with who talks to the seller, who talks to the buyer, and whether your earnest money comes back off the top before the split.

While you're at it, ask which state you're both operating in and whether wholesaling there triggers any licensing or disclosure requirement, since that varies by state and a few have tightened rules specifically around assignments. A real estate attorney in your state is the person to confirm that with.

nicole_adeyemi · Answer

Some of this checks out before ever raising it with him. Pull his name and any entity name he gives at the county recorder and look for deeds and recorded assignments. This works well on land deals in particular. Two cautions: plain assignments often never hit the record at all, and roughly a dozen states don't make sale prices public, so a clean record search isn't proof either way. It's just cheap to run.

bmoreno23 · Answer

I asked a guy like this for a closing statement once and he sent me a screenshot of a $6k Zelle payment. Different thing entirely.

How do you verify that a wholesaler offering a JV split actually has the closing history they claim

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