BiggerPockets

Hello all-

I am new to investing, so just wanted to see what you guys thought of this. I looked at this property couple of weeks ago. It's FSBO and the asking price was $18,500. I offered $15,000, the seller countered back with the asking price. I countered back with $16,000 and explained why my $16,000 was a reasonable offer.

I spoke with the seller yesterday and she said she is still considering my offer, but now she's using an agent to sell the property. And the agent told her to not consider my offer, because he will try to get her an offer for more than the asking price. This was all yesterday around 1.30.

So I meet this wholesaler, and he takes me to the exact same property and he's asking $24k for the house. I didn't tell him that I had looked at this house couple of weeks ago and was still negotiating. I wasn't very sure how to deal with this issue, so I stayed quiet. I asked him if he owned the property, and he said yes, the seller just accepted his offer, which I know is a lie. He's trying to do a double close and make quick $5-6k on the property, but that just seems too much.

So I wanted to ask you guys:

1) If you had ever dealt with the similar situation?
2) Should I talk to the wholesaler about it?
3) And is the margin of $5-6k on a $18k property reasonable? Seems too high to me.

Thanks!

So is the wholesaler selling the property in the same exact condition or will repairs be made prior to your purchase? In your eyes, what is the ARV and does the potential profit make it worth your while to purchase?

Max,

Sophisticated investors never focus on how much the wholesaler is making but rather on how much they can make off the deal. I'm a wholesaler and an investor. As a wholesaler, I've wholesaled a house where I brought for 18k and wholesaled to another investor for 30k, but that was a good deal to that investor because it fit his investment criteria. Always focus more on the deal rather than how much the wholesaler is making.

Thanks for all the replies. Being a new investor, I am learning a lot everyday. I understand that I shouldn't focus on the profit margin of wholesaler, but this seemed a little outrageous to me. I have an offer on the same property for $16k, and I called the seller to up my offer to full asking price of $18.5k, but this wholesaler, who doesn't even own the property is offering the exact same house to me for $24k.

Jeffrey, yes I did make a cash offer and will close in two weeks time.

Do you guys think I should talk about this with the wholesaler or let it go?

Thank you guys for great and very insightful responses. I truly appreciate them all.

Brian-what you are saying makes a lot of sense. No good will come out of bringing this up with him. Thanks!

When you guys buy properties from a wholesaler, is there a lot of room for negotiation? Or are wholesalers pretty stubborn about their price for the most part? Thanks!

Hi Jeffrey-

Thanks for the quick reply.By no stretch of imagination, I consider myself a seasoned investor, but I completely see your point about not buying many properties from wholesaler on a regular basis.

I am getting to a point where I am getting my name out there to homeowners and getting calls straight from them. As a matter of fact, an agent called me this evening before listing a house on MLS. Though it didn't fit my criteria, but it still good to know that you have access to some properties before they are listed.

All thanks to BP!

You will find this situation everyday, as a wholesaler its very common some people just don't handle business properly. But there is nothing you can do about it. As far as 5-6k on a 15k house why would you say it's too much? Something you will need to learn if you plan to wholesale is the market decides what the house will sell for not you. If the market says it's worth it then why wouldn't you. If we all set prices for our houses depending on what the price range was we would all be making small money. I have made 40k on a house that retailed for 100k it was a wholesale deal i did no work to and i didn't even own it.

Brian Haskins