How to Avoid Getting Cut Out of Your Own Deal When Paper Flipping Real Estate

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🚨 The Risk: Getting Cut Out of Your Own Paper Flipping Real Estate Deal

Imagine this: you’ve found a motivated seller, locked up a great deal, and found a buyer who’s ready to close. But just before payday, your buyer goes behind your back—or the seller suddenly ghosts you.

Your deal falls apart—and so does your profit.

Unfortunately, this can happen if you don’t have the right protections in place when paper flipping real estate. The good news? You can avoid this with the right strategies and contracts.

What Does “Getting Cut Out” Really Mean?

It usually happens when:

• A cash buyer contacts the seller directly and cuts you out of the transaction.

• The seller cancels your contract and sells the house to someone else.

• You make an introduction between seller and buyer, but get skipped when it's time to assign the contract and collect your fee.

Bottom line: you did the work, but didn’t get paid. Let’s fix that.

✅ 7 Ways to Avoid Getting Cut Out of Your Own Paper Flipping (Property Wholesaling) Deal

1. Use a Solid Purchase Agreement

Always get the property under contract before marketing it. This contract legally gives you equitable interest in the deal, meaning no one can bypass you without risking legal action. Check the local wholesaling/paper flipping laws in your state and have your Attorney to provide you with a solid purchase agreement.

Important Tip: Include a clear assignment clause in the agreement that allows you to sell your rights to another buyer.

2. Work Through a Title Company or Real Estate Attorney

Don’t try to manage funds or paperwork yourself. Using a title company adds professionalism and ensures all parties know you're the contract holder.

It also makes it harder for buyers or sellers to sidestep you and close elsewhere.

3. Use a Non-Circumvention Clause

When working with buyers or JV partners, add a non-circumvention agreement. This prevents them from contacting your seller behind your back and doing the deal without you. It can be a standalone agreement or a clause inside your JV or assignment contract.

4. Vet Your Buyers Carefully

Not every cash buyer is ethical. Build relationships with reputable investors who’ve closed deals before—and avoid buyers who:

• Hesitate to put down earnest money

• Want direct seller info too early

• Try to negotiate you out of your own fee

A strong buyer list is worth its weight in gold.

5. Control the Communication

You should always be the point of contact for both the seller and the buyer until the deal is assigned and in escrow. Don't introduce the two parties unless absolutely necessary. And if you do—make sure contracts are already signed and you're protected with written agreements.

6. Collect Earnest Money Quickly

As soon as the assignment contract is signed, collect non-refundable earnest money from your buyer. This locks in their commitment and gives you leverage if they try to back out.

7. Record a Memorandum of Contract (When Appropriate)

In some situations, especially when you're worried the seller may back out, you can record a Memorandum of Contract at the county courthouse. This publicly documents your interest in the property and makes it difficult for the seller to sell to someone else.

Note: This should be done ethically and in consultation with an attorney.

💬 Final Thoughts

Paper flipping real estate is a powerful strategy—but only when you protect your role in every deal. Getting cut out not only hurts your wallet, it can damage your credibility and motivation. The solution? Be professional. Use proper contracts. Work with reliable people. And never skip the details just to rush to a payday. Remember: you did the work—you deserve the check.

The information in this article are of the opinion and experience of the author. Due diligence should always be done before investing in real estate.