In my view operating your real estate investing business with integrity is a non-negotiable item.

Almost all contracts have contingency clauses – valid conditions that must be met in order for the agreement to proceed. And the legitimate, appropriate use of contract contingencies I take no issue with. It’s the frequent and free use of these contingencies as a replacement for doing your homework that I find disturbing. As a professional real estate investor, you should always be 100% honest with all parties in a transaction. When you sign your name to a contract, do it with honor.

You should make every offer with the full intent of settling the deal one way or another. If not, don’t ink the deal. If certain circumstances need to fall into place before you can settle on a deal, present the offer, but clearly disclose those circumstances upfront.

There have been times when settling on a deal seemed like it was going to blow up in my face. But every time I was able to find a way to honor my word and put the deals together, even though they weren’t great deals for me.

Yes, I’ve encountered several situations where I couldn’t find a wholesale buyer for a particular deal. Though my intention when I first started flipping houses was to exclusively do wholesale deals, I was forced by my word to honor these contracts and settle on the homes myself. In fact, this is how I started rehabbing houses in the first place. Believe me, anyone and everyone who focuses on wholesale real estate flipping will find him/herself in the same position. When you come to that point, if you’re signing your name with honor, you will find a way to settle the deal with integrity, and either fix and flip the house or hold it until you can find a wholesale buyer (yes, possibly even at a loss).

The Bottom Line…

As an ethical real estate investor, you should sign your name to each and every contract with honor. Anybody can go make an offer, but your name is your name and it has value. If you sign contracts without producing, then in time your name will have little worth. Contingency clauses have their place, but you shouldn’t be using them as a safety net to sign up deals you feel unsure of. You should sign your name with integrity and always do everything within your power to keep your worth. In the long run your reputation as a person of integrity will bring you much more profit and prosperity than any short term gain you may experience by being a weasel.

The article shown above is a condensed version of the article “Flipping Houses Ethics: What’s Your Name Worth” by Steve Cook.  We most gratefully thank the author and Real Estate Investment Club for the courtesy of permitting RentaVenta.com to republish this work.