This type of Daisy Chain transaction is very typical of wholesale deals where more than one party brings a buyer for the property. ![]() The Realtor® who brought the actual end-buyer needs to be compensated and if he isn’t part of the original JV agreement he’ll receive a commission which will likely be a “POC” (Paid Outside of Closing) but shown on the HUD as a debit to the seller who is in this case the original investor – not the homeowner. However, the quirk in this transaction is that the investor who brought the end-buyer actually brought him through another investor or in many cases a Realtor®. He now has an Equitable Interest in the property via the original investor’s contract with the seller. So let’s say that the investor bringing the buyer asks for a JV Agreement and gets one for a price of $120,000. If the investor is willing to split his profit a typical split would be 50/50 but I have seen them be as much as 20/80 with the original investor getting the 80%. Wholesalers will be calling and asking him how much is in his “profit spread” and how much they can get if they bring a buyer. Assume an investor gets a contract on a property for $100,000 and advertises it for $120,000. ![]() Let’s use an example to make it more understandable. ![]() What has been changing in the recent past is how many people are in this chain of JV Partners. This is not a real estate commission in any sense of the word as long as a JV Agreement is in place. In the realm of wholesaling real estate it is very common for another wholesaler to bring a buyer and be compensated through a Joint Venture Partnership Agreement (JV).
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