Wholesalers who think their deals are great

Ok..so this might be a rant.. But I get so many people pitching me their latest and greatest deal of the century. Seriously most of the deals I hear from wholesalers is nonsense. Not far off then the long lost relative emails you get asking for your bank info.

In all seriousness, I love wholesaling...I am a wholesaler myself. I find that most however have no clue how to put a value onto a property. The ARV is always way too high, costs for rehab are way too low. It just takes away from being a professional, and adding value to your end buyer. Not to mention that some real investors look at wholesalers in general as not being credible resources. Any good investor will put in their due dilligence, but still come on!

Just my thoughts as I just got another call on a deal that I know they dont even have tied up yet they say they do. :lol:

Tod R.

Real Estate Investor · Southlake, Texas

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Apr 08 '11, 08:44 AM

Not having any experience with the wholesale process, I have always considered wholesaling an uphill battle, at least in the beginning. You start out with little to no credibility. If you are pushing your contract on someone you haven't gotten comfortable with, I would assume they question your ARV as well as your rehab costs.

This seems like more of an artform vs. science. I would like to hear how others critique wholesalers.

Tod R., Thompson Realty Corporation
Telephone: 817-781-1942
Website: http://www.thompson-realty.com
radyakllc@gmail.com http://www.thompson-realty.com

Bryan Hancock

Real Estate Investor · Austin, Texas

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Apr 08 '11, 10:22 AM

Wholesaling suffers from the same problem that bulk REO, CRE funding, and several other niche areas suffer from....there are 95% pretenders crowding out the 5% real players.

Bryan Hancock, Bullseye Capital Real Property Opportunity Fund
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I help busy people profit from real estate

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Apr 08 '11, 11:45 AM

Originally posted by Bryan Hancock

Wholesaling suffers from the same problem that bulk REO, CRE funding, and several other niche areas suffer from....there are 95% pretenders crowding out the 5% real players.

And, like those other "areas", gets hyped by gurus as a quick and easy way to make a buck with very little money.

Jon Holdman, Flying Phoenix LLC

Jimmy C.

Real Estate Investor · Clearwater, Florida

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Apr 08 '11, 01:25 PM

Good point guys.

I dont even give repair estimates to prospective buyers. Primarily because I dont know how much they will pay for materials and labor.

Instead I tell them what a place needs to be rent ready, and let them decide how much it will cost. Even then I get people who say a place "needs" a lot more than what I think rent ready is.

And this is just my opinion (take it with a grain of salt lol) but I think the end buyer is going to pull their own comps anyway, so why bother with that?

That being said I know that there are a lot of nOObs that will think they have a deal and it isnt. Persistence, and the ability to learn from mistakes is all it takes. My advice to a newbie wholesaler would be fail forward.

Greg P.

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Apr 08 '11, 01:49 PM

I'm a wholesaler and have a reputation of only sending good deals. I had trouble at first, but started to realize that people respect your opinion on deals if they "know" it's a great deal. Now, when I have a deal, people email me back right away and want to do the deal. I think it's about putting yourself in the others shoe and looking at a lot of properties. Eventually, you'll say to yourself..."should I buy this property and would it make money?" If the answer is YES then most likely someone else will think so too. So I would say experience helps, looking at 100+ properties and being able to think to yourself if you would want to buy it. And yes, I totally get what you are saying about people who act or fake deals or just send not great deals.. that's part of the business.. I used to do it, but soon realized that there is a better way to do it and it's called reputation.

Rob Gillespie

Wholesaler · Valley City, Ohio

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Apr 08 '11, 04:15 PM

the pig gets fat and the hog gets slaughtered! If one is gonna wholesale, they must pass on good deals, or they will need to find new buyers over and over. If I sell one and put a value on the rehab, I will stand by it. If they cant get it done at that price, I will pass them the tradesman to make it happen.
I guess that is why I can sell multiple homes to the same investors.

Rob Gillespie, Rob The House Guy, LLC
E-Mail: rob@robthehouseguy.com
Telephone: 330-800-9043
Website: http://AskTheHouseGuy.com
Rob@RobTheHouseGuy.com 330 800 9043 AskTheHouseGuy.com RobTheHouseGuy.com

James Hiddle

Real Estate Investor · Altus, Oklahoma

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Apr 08 '11, 04:58 PM

I think some wholesalers don't bother telling their end buyers to do their own due diligence even though you present them with values and estimates.

They need to keep in mind that the key word is estimates and not actual costs. They still need to do their own homework.

Jimmy C.

Real Estate Investor · Clearwater, Florida

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Apr 09 '11, 01:07 AM

So true james. Any buyer worth having will do their own dd anyway. plus I have a guy who does rehab for dirt cheap. If I gave them his estimate people would think im shady too.

I have recently learned my lesson on workin with newbie wholesalers but thats for another thread.