Posted by Kristine-CA on April 11, 2011 at 14:13:29:
The investor wants you to sign something to protect himself from
having you go around his offer and directly to the seller. The investor
may already have a contract/deal with the seller and wants to assign it
to you (where you would take over his contract). But since he would
have added his profit to his asking price, he knows that some buyers
will try to cut him out of the deal. Or the investor may have some
other agreement for a fee with the seller if he finds a buyer. He may
be an agent, but likely he would have mentioned that to you (it doesn’t
always happen). Regardless the investor has something to protect and
wants you sign the doc.
I have never required one from any of my buyers when selling but I
have signed a few when I was an interested buyer. Those
investor/sellers didn’t have anything to worry about because they were
crappy deals, even if I had tried to go around them. 
Their asking
price and what they were paying were too much.
One suggestion, though, and take it for what it’s worth from someone
who mostly sells to rehab buyers and landlord buyers: don’t read too
much into what the investor paid and/or his profit margin, or what you
think it is. Do your own numbers and work it against his asking price.
If his price is too high, negotiate. Always ask for a better price and
terms. Buyers who decide that the wholesaler or “middle man” is
making too much are missing the point. I have one rehabber who
always asks what I’m making, and sometimes it’s more than what he’ll
make. He’s gotten used to that. A deal is a deal when it works for
your plan and exit strategy for the property. Obviously, just my
opinions here.