Defining a “True” Real Estate Wholesaler

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I know a talented quarterback when I see one even though I’ve never played the position.  A good actor is easy for me to spot and I’ve never taken a drama class.  I also know what a good golf swing looks like, despite my 25 handicap.

I haven’t done any real estate wholesaling since 2003.  However, I do have a pretty good idea what a “true” real estate wholesaler does.  After posting How to Spot a Wholesale Real Estate Pretender last week many of shared your experiences with the so-called wholesalers in your market.  So what is a “true” real estate wholesaler and what do they do?  Fortunately, I didn’t have to come up with the definition on my own.  Our readers did all the work.  See below.

A System and Experience

Most “true” wholesalers (and this may be gross generalization) are usually one man operations that have a great deal of time and experience in their craft and often do not have websites because they don’t need them. They have a list of clients that they work with, but would probably consider working with more as long as they were true buyers. – Chris Clothier

Here in central Indiana, there are a handful of “true wholesalers” that are among some of my sources. They don’t do websites. They know what I like (type house, area of town, price range) and will typically make me one of their first calls when they contract one. And, they make $2,000 to 3,000 per transaction and move on. When they call, if it’s something I like, we often take it off the market within hours. – Charles Bradford

No Phony Deals

It seems that there are far too many of these “wholesale pretenders” as you called them who are just pitching crappy “deals” (retail) out there. Anyone can go and find a deal on the MLS, but to find the diamonds in the rough – that’s a skill.  – Joshua Dorkin

I advise wholesalers I come across to at least show me a deal I haven’t already found myself and turned down. – Don Hines

People trying to play middleman with “dead” real estate are the lowest of the low on the totem pole. The late night TV guys encourage people to sell this way and encourage even more people to take their small bankrolls and buy from these sellers.  – Robert Ely

Keeping it Simple

I agree with the loopholes most wholesalers make you jump through to see current deals are a PAIN. We don’t really see any reason to hide what we have. Yes, some deals may be a steal, some may be mediocre. We have all our wholesale deals listed and we offer people to just in an email to subscribe to our RSS feed via Feedburner in order to have an easy way to stay in the loop. – Andy

I subscribed to a bunch of wholesaler lists and have yet to see a good deal. The comps are cherry picked every time. The one deal that I saw that looked promising had an addendum from the wholesaler a mile long. One of the conditions buried in there was that if the wholesaler was unable to deliver title they could postpone the closing indefinitely all the while holding on to the quite sizable finder’s fee. I mean their terms absolutely sucked. I told them to go jump.  – Robert Steele

So there you have it.  “True” wholesalers have a system and experience.  They don’t advertise phony deals and keep it simple for their buyers.  Thank you BiggerPockets readers.  You saved me hours of time.  Now I can go work on my golf game.

About Author

Marty (G+) is the Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, AZ. His firm purchases homes at the courthouse steps and public REO auctions. They have two exit strategies, either fix and flip or seller financing.


  1. I see in this article where Charles B talks about an assignment fee of $2k-$3k, is that what most are paying? I was told I can expect to pay $10k usually, unless its just someone birddogging for me. I heard that someone new to assigning might start out as low as $5k but then once they turn a few good deals they will bump up to $10k. Thoughts?

    • Jack, assignment fees, like everything in real estate, are negotiable. If the wholesaler finds a great deal they’ll probably want more than 2-3K. Pigs get fed, hogs get slaughtered. The pros know that if they keep too much of the profit for themselves then the buyer will never come back.

  2. Hey Marty,

    I will pay $60k including the assignment fee, needs about $60k in rehab, and should bring in minimun $165k. So I’ll have some closig fees on both ends, realtor fees for the sale, so we stand to make a nice piece of cake here. I need to do some more checking with the REIA to find out what the going rate is around here I guess. The assigner found me on another REI forum and contacted me and I know on that site most talk about how you can make $10k on assignments, so thats what everyone says. I am new to the game so thats why I am out here asking the pros how its handled where they are at. Appreciate your comments!

  3. Ricardo M Rodriguez on

    Great collection of comments from the last post Marty. It’s great to have some kind of guidance from seasoned investors when starting. What stuck with me the most was that it is all about building long-relationships with buyers and win-win situations so they come back time after time.

  4. I am a wholesaler in Dallas, Texas and the first thing I do is ask my buyers what are their criteria. I have buyers that rehab/retail and buy/hold. Each one of them have a different criteria. I don’t do any remarketing of wholesale deals, because it is not deal anymore if I am going to add fees to it. If I work with another wholesaler I will tell them that you paid me from your assignment fee if I bring you a buyer. I have seen the same property email to me from 4 or 5 other people with the price inflated each time. I don’t consider that wholesaling. My assignment fees will always be between $3k to $5k unless it is some huge deal where me asking for $10k will still give the investor a nice size profit of $50k or more. I am going to give my buyers pictures, up to date comps (apples to apples), true repair costs (from contractor), and breakdown of the fix cost to let my buyers know exactly how much money they can truly earn from the property. The property could be better to hold than retail. So I try to give them the entire picture.

    • Allen Singleton on


      Great advice! I am a new to real estate investing working with little capital and no credit (College student). I am interested in starting small and using the strategy of wholesaling.

      1.) What would you advise a new wholesaler about finding legit investor buyers without wasting time?
      2.) As a seasoned wholesaler, what would you recommend to a new investor to find good deals that are not on the MLS?
      3.) You mentioned that you have a contractor to calculate true repair cost, would that be possible for a new investor with low capital?

  5. I am a full time wholesaler in Louisville, KY. Great comments guys. When you do business in an ethical way where everyone wins, you will have folks that buy your deals time and time again. It’s a great day when you finally have other investors ask “if you will please add them to your buyers list

  6. As a wholesaler / rehabber it is good to hear the opinions that are out there about wholesalers. I think part of what is creating this “problem” is that the market is so ripe for wholesaling currently, that there is a such large pool of inexperienced guys looking to make some money. The way many new guys learn is to buy a wholesaling course and put it to work. Those courses, although pertinent, are also a bit more optimistic than they should be. It does take time, dedication, and a willingness to learn and constantly improve to get to a level where you can be a consistent and effective wholesaler. Ultimately you need to have the resources, buyers, and reputation to really be cranking out the wholesale deals.

    A typical wholesale fee for me is around 5k. I have made as much as 15k and as little as couple hundred per deal. I give my buyer all the profit they need to have to get a smoking deal, and I get what is left over. I would rather have that buyers fee of 3-5k over and over, rather than 10-15k once and never see them again. I think a lot of wholesalers are looking for that home-run, instead of collecting modest and consistent “singles”.

    I hate that wholesalers in general seem to be developing this bad rap in so many ways. I can certainly see why in a lot of cases. I know that the negative generalization that is being formed regarding wholesalers will only make the serious professional wholesalers really stand out against the rest.


    This is about Jack’s post on Aug 5 but applies to everyone in this subject category.
    I hate being the devils advocate Jack, but your details above are very tight in this investors opinion. You say you can purchase for $60,000, rehab for $60,000 and you can sell for $165,000.
    It is difficult to believe that anyone would comment that “it sounds like a money maker”. It actually sounds like a big gamble. You would be better off taking your cash to a casino and plopping it down on your favorite color. There just isn’t enough spread in that deal to handle the unforeseen possibilities. First, you better price it right for resale since buyers always try to negotiate it down and if you price it too high, you won’t get any lookers.
    If you buy for $60,000 plus $rehab $60,000 + in closing $2000 + out closing $3000 + RE Commissions of $10,000 +/-, Plus Construction permit fees $500.00 plus Carrying Charges.
    Carry Charges?? There are always carry charges. If you have to take a HELOC to do the deal, there are monthly payments. If the cash in in the bank, you still have to figure in the cost of money at the going rate for at least a 3 yr CD (3% ish).
    If market time in your area is 6 mos. then $125,000 x 3% x 6 mos =$22,500 +/-.
    You better pray your rehab doesn’t go over $60,000, and you better pray your market value doesn’t drop in the months it takes to get the rehab done and market is for sale.
    So, $60,000 + $60,000 =$120,000 plus $50000 (in & out closing), plus sales commission $10,000 = $135,000.
    Then when you sell it, if nothing goes wrong, you make a gross of $30,000. Then you have to deal with the IRS on the profit. Let’s just say another $10,000 in tax. This leaves you $20,000 profit. At this point your ROI is 13.7%. If you figure in the cost of the money at $22,000 (since you don’t have use of the money) your return is zero. If the sales price is not $165,000 in this continuing to decline market, your 13.7% takes a dip.
    If for any reason it doesn’t sell, then you have to Refi Cash out to get the use of 70% of the value back and you can’t Refi Cash out for 12-18 mos after your purchase date (Banks Rules).
    Then you have to hope you qualify for the refi based on your current debt ratio and credit score.
    Bottom line for me, I work all the numbers, take every possibility into consideration. If I don’t end up with a minimum of 25-35% return after everything, and a property that I can rent (if I have to) for enough to give me a 10 cap, I look for something else.
    What ever you decide, be careful.

    • Jason your comment is right except that you have figured the cost of money wrong. Three % of 125k = $3750 / 12 =312.5 * 6= $1875 . Still looks like a thin deal for the amount of time and money invested. Something goes wrong and you could be losing money.

      • Tom, I’m not a big fan of using a cost of money calculation in my deals. Unless, of course, it’s for a HELOC or private money loan. Here’s why – I need immediate access to my cash, which means an ordinary checking or savings account. Those don’t pay 3%.

    • Jason, you’re plugging in your own assumptions into Jack’s deal. He never said that it would take six months to fix and up sell. And he said the “minimum” he could sell it for was 165K. That means he thinks he could probably sell it for more. If I used your math for my deals here in Phoenix I’d never buy anything. Let’s all remember that real estate is a local business. Fix up times, days on market and cost of money vary. It takes me an average of 7-10 days to fix up a house. From acquisition to closing I average 72 days. Based on what’s going on here in Phoenix this deal is a money maker.

      By the way, how did you figure the ROI? If it takes Jack six months to sell this house and he nets a $20,000 after-tax profit, after putting $135,000 into the deal, then that’s a 14.8% return. But you have to multiply 14.8% by two to get the annualized return since it only took him six months to realize this profit. However, Jack’s cost basis was not $135,000, it was $120,000. He doesn’t pay the $10,000 in commission and $5,000 in closing costs until the day it sells – this goes on the books as a “cost of property sold”. So that means his annualized ROI is 33%. That sounds pretty good to me.

      And for what it’s worth I don’t think it’s wise to go into a fix and flip deal thinking that if everything goes wrong I’ll just rent it out. If you’ve made a business decision to fix and flip houses then stick to that model and be ready to lose on a deal from time to time. I recently lost $7,500 on a flip deal but on the very next one I made $30,000.

  8. Jack Holland on

    This is great information everyone! As I’m new to wholesaling, I’m hoping you all can help me when it comes to developing a buyers list. What’s the best way to go about putting together that list?

    • Jack, it’s simple – find a good deal. If you find a good deal the buyers will find you. All you’ll need to do is show up at your local investment club meeting, networking event or real estate class with the information. Someone will want the house, or know someone who does. You may even find buyers for your deal here on Bigger Pockets.

  9. You’re right on Marty. I’ve wholesaled hundreds of houses and everything you (and your readers) shared is right on. I laughed when I read about “true” wholesalers not needing a website. When I started wholesaling my website was how I promoted all my deals. I still have a website, but I’ve only updated it once in the last year. Now I sell most of my deals with a couple phone calls to very serious buyers that I’ve done business with for years.



    What he inferred was that he is buying from a wholesaler which means that none of what you said is cut in stone. The Minimum sell price he mentioned reeks of having come from what the wholesaler told him. All I was trying to point out was that one can’t look at Price A + Price B subtracted from Price C = Profit. I don’t know and he doesn’t say where he got his info on what his repair cost would be and that too looked like something he may have gotten from the wholesaler.

    I may have done my calculations wrong, but I was writing fast to try and make the point that you have to analyze a deal from all aspects and take everything into account.

    Your statement about sticking to your original plan to flip if that was your original intention, I find to be a bit on the fantasy side. One has to have an exit strategy and one has to be prepared to modify that strategy if it becomes necessary to do so. Plan A is Flip it, but there has to be a Plan B if Plan A fails.

    • Jason, if in fact Jack got the numbers (market value, rehab costs, etc.) from the wholesaler, and Jack didn’t verify the information on his own, then shame on him. If Jack is confident that the numbers are accurate then I believe this deal will make him money.

      A fix and flipper’s Plan B should not be to become a buy and holder. It makes no sense to tie up capital on a bad buy because you don’t want to lose money. That’s cash you could use on the next deal that very well could be a home run. There’s no problem price can’t fix. In other words, a fix and flipper’s Plan B should be to drop the price until a buyer is found, take the loss and learn from the mistake. Check out my post titled “Are You Willing to Lose in Order to Win?” from 5/26. When I wrote it my firm had lost over $90,000 on deals gone bad. But, we’d made over $400,000 in profit. Today we’re at $100,000 in losses but almost $500,000 in profit. If I’d decided to convert those bad buys to rentals our fix and flip business would be extinct. That’s no fantasy.

  11. Hey Marty and Jason,

    The rehad figures I got for $60k have come from 2 GC’s, at different times, who don’t know each other. One thinks it will be less then the $60k, but wanted to tell me up to that, the other said $60k but give him 10% fudge factor, meaning could get up to $66k. Both have also told me that $165k is way to low, but I went by comps my good friend/realtor provided me on houses that have sold lately but not as nice as this will be or as big, but I like to think $165k in my head so anything over is icing on the cake. Appreciate all your guys comments and food for thought.

    And as far as the wholesaler, he called me to help him assign it to someone and would split the profit if I showed him how to do it, but I ended up wanting it myself. He came to the table with nothing, absolutely nothing as far as comps or info, just the relationship with the seller. It was more of a birddog but I know he had other investors interested in this so I didn’t argue about his fee.

      • Hey Marty,

        I had lost this post so I hadn’t put an update yet. Went way over budget, took longer then expected, BUT sold for a lot more! Prices increased in the area the same time we were rehabbing. End result was $45k profit after all expenses. Best thing about that is, no taxes either, my wife had carry over loses from some market stuff years ago, so we’ll be claiming those loses on at least one more flip. Life is good!


    Thanks for that clarification, and if the $165,000 is “Way to Low” – Great. My comments were based on the Idea the house resale value would be around $165,000. My whole point is simply that A + B subtracted from C does not always = X Profit. There are multiple things that can crop ugly heads along the way and cause that X Profit to drop into a sink hole. If you were suggesting repair costs at 10% of the homes ultimate value, I wouldn’t worry about it too much. There isn’t much that can go wrong when all your doing is paint, carpet and some minor repairs. On the other hand, when your talking about $60,000 in repair cost or possibly 1/3 of the final value depending on how you define “Way too Low” then you have to plan for contingencies and I don’t care who gives the repair estimates. On another forum, I read about a novice who bought a house from a wholesaler that estimated it would need $30,000 in repair cost and that included the need of a new Oil Burner. After settlement, it was discover the house had an old “Buried” Oil Tank and the soil needed Remediation at a cost of over $80,000. In another, old Knob and tube wiring had been incorrectly joined to new Romex and wasn’t discovered until the sheetrock was removed. Then the entire house needed to be rewired. My point is, you have to plan for contingencies or as some wise person once said, Plan for the worst and hope for the best.

    As for the 3% cost of money I gave in the example. If you folks all have your investment capital sitting in a checking accounts at zero interest, then you have no cost of money. well, actually you do, but that is a topic for another discussion. On the other hand if you have your real estate investment capital waiting for use in a decent money market, or some other fair to midland interest bearing vehicle, then you do – have a cost of money. If you have $120,000 +/- sitting in a Zero Interest savings account, – shame on you.
    I have most of my RE Investment Capital invested in Private Notes that pay an average of 8%. I can take any of the notes down to my local lender and use it for collateral for a secure loan on which I pay roughly 4%. When I buy an investment property, I have to consider what my final return will be and take the 4% I’m not getting on the Note into consideration. I see a lot of novice investors using their Credit Cards to buy material and not subtracting the interest on the card from their returns. Some use Retirement accounts to fund their deals and don’t take what their not earning on that account into consideration of their cost of money. Like I said, if you have $120,000 sitting in a zero interest account, there is no COM, otherwise their is.

    And Finally, Marty on your comment, –

    “A fix and flipper’s Plan B should not be to become a buy and holder. It makes no sense to tie up capital on a bad buy because you don’t want to lose money.”

    I read what you have to say and respect your opinion, but on the subject of back up plans, You and I will have to agree to disagree. Back up plans help to reduce risk.

    If you have a Plan B, then there really should be no situation in which you “loose Money”.
    In the last four years, I have purchased 81 properties and successfully flipped 64 of them in various parts of the country. Of the 17 i could not flip quickly enough to meet my Conservative Goal Return, (CGR), I initially rented them. Then after a short period of time, with the rehab completed, Tenants in Place, Local management arranged, I flipped 9 of the 17 to other investors looking for turnkey investments with good Caps. Of the remaining 8 properties, I was eventually able to flip 3 additional and maintain my minimum CGR. The other 5, I still own with an average Cap of 11.7%. After the 70% cash-out refi which I immediately used to buy more NOTES.

    I Personally always have a plan B. It could be the reason that in 35 years of Investing in Real Estate, I can honestly say, “I have NEVER lost money. My Plan B is very simple. I simply took the idea that you should Plan for the worst and hope for the Best and converted it to Plan for the Rent and Hope for the Sale.

    When determining the Total Investment I will make on a property, I always start with the Average Monthly rental I can expect to get for the house and calculate my return based on it.

    Then if I can purchase the property, do the rehab, cover the contingencies, pay the In and Out fees, and the carry charges with whatever Mortgage Amount 70% of that figure will pay for, I buy the property knowing in advance that unless there is a tornado that carries the house to “Arizona”. I will make my Minimum CGR.

    • Jason, it is remarkable that after 35 years of real estate investing you’ve never lost money on a deal. I commend you. It sounds like you have an unlimited supply of cash and credit that allows you to hang on to properties you can’t flip quickly for your desired return. That’s great. But with a limited amount of capital and no credit it’s difficult to do what you suggest. That’s why I say a good Plan B is to take your losses and move on.


    No Marty, I don’t have an unlimited supply of Cash and Credit. I suspect, but am not sure that you may not be looking at the Big Photo here. I am sure by the way you write and the length of time you have been on BP, that you are an experience investor, But at the same time I know a lot of very experienced investors who can’t see the obvious when it smacks them in the face.

    I am a High School Biology Teacher by profession (not because I need to be, I just love it) and started investing in the late 70s right out of college and with no credit. My first love is and always will be buying low, rehabbing and flipping and I guess I lied a little when I say I Never lost money. I lost me arse on my very first deal and swore that would never happen again and it hasn’t. Over time, I have built a nice portfolio of property, most of it purchased with profits on flips.

    What I noticed early on and what I still see today is that Buy and Hold Investors think from a Cap Rate AND a Cash on Cash standpoint BUT Buy and Flip Investors think from a Profit on Sale or just the cash on cash standpoint.

    The B&F Investors Calculate this Way – ARV less Repair and Carry Charges less Purchase Price = Profit and Profit/Cash Invested = Cash on Cash ROI.

    The Buy and Hold Investors calculate this a way – MONTHLY RENTAL x 12 less Expenses = NOI, then NOI/Total Purchase Price Including repairs = Cap Rate and if the Cap Rate is =/> than what they can get in a different type of investment property, then they make the deal.

    The reason I haven’t lost money since that first deal is because I have two exit strategies instead of one.

    When I look at a deal, On a SFH Flip, I look first at what I can rent the property for – if I have to. From the average rental, I subtract 25% which is what banks will subtract when determining my Front End Debt Ratio to determine if I qualify for a 70% Cash out Refi. (12 mos. from date of purchase for seeding). Then I subtract RE Taxes and Insurance. Then, I add up my Purchase, Carry, Remod and Sale costs and divide that total into the yearly net income before Debt service and If I have a minimum 10 Cap, I do the deal. I’ll drop to 6 or 7 for properties in really nice condition up front or if they are in really high demand areas.

    Then I find out what the average Days on Market is for whatever MSA the property is located in.
    When the rehab is 75% finished, I put it on the market as an exclusive listing with a top notch realtor and specifically request it not be placed in the MLS. (New bank rules require that a refi not have been listed for sale a minimum of 6 mos prior to the refi app being made.

    I leave the house on the market for the average Days on Market plus 1 month. If I have had no activity for 30 days, I lower the price, multiple times if necessary, but never go below my minimum ROI price.

    Two months prior to my planned day to take it off the market, I begin looking for a good qualified tenant. I take their info and tell them the property won’t be available for 60 days.

    Once I have a few WELL QUALIFIED POTENTIAL TENANTS lined up, I raise the price back to the original asking price and in a few cases even higher than the original. I can’t tell you how many times the property has sold after I raised the price.

    I also can’t tell you how many times the properties have sold to a potential tenant who changed their mind and purchased after seeing the house.

    If it doesn’t sell , I rent the mutha, collect the income which is at least 25% of gross, and wait a year to put it back on the market unless, I sell it to an investor who wants a SFH Rental. In the mean time or 12 months from the day I purchased it, I apply for the Refi cash out. Since I did the calculations in advance, I already know I qualify.

    You are right, “with a limited amount of capital and credit it is difficult to do what” I suggest, but that is only on the first few deals. If an investor sticks to the same local MSA and deals with the same bank on the Cash out refi’s and does their own prequal ON DEBT RATIOS before going to the bank, and presents the bank with a good clean package on each of the first few, it won’t be long before the bank begins to trust the investor. Then, everything gets easier.

    If the investor with limited resources does it my way and plans on the potential of a rental up front, he or she will open up the potential to sell the deal to a turnkey type investor, Now besides the normal house buying market, he adds investors to his potential buyers and I’ll tell you, there are a heck of a lot of baby boomers looking for nice clean turn key, no hassle investment properties who would never dream of buying a 10 unit apartment building with $180,000 down, but will gladly write a check from the old 401K for a nice clean single tenant property.

    Once one establishes themselves with these turnkey investor buyers, the process gets even easier still. Many times, I can call one or more of my old Turnkey property buyers, tell them I have a new property with a 10 cap, and If I don’t sell a property after dropping the price several times, they can have it with good tenant in place and I will discount it for them, but I NEVER GO BELOW MY MINIMUM CGR.

    Worst case scenario I have to wait a year or two to sell it, collect a decent monthly income and refi the property to get my 70% of Value which is usually (not always, but usually) more than I have in it so I have all my investment capital back plus some immediate profit.

    If I decide to wholesale the property for what ever reason, I can offer the buyer a 10 cap property as a rental and a good return if they want to flip it.

    One last thing. 2 years ago I gave this strategy to several of my old students from my Biology class who had returned from Afghanistan with varying amounts of beginning cash and various credit scores and they all report that after 30 months of investing, not a single one has lost any money at all. Several have flipped and or held dozens of properties.

  14. Franddy Aguasvivas on

    Even though I always like your articles, I have found this one to be a little unjust due to its generalization. Please allow me to ask you: Did you start in the beginning with all the experience and resources you have now? I am pretty sure that just like every newbie you went through a trial and error period. The so highlighted experience and system in your article come with time, discipline and smart works, which eventually turn into professionalism.

    Wholesaler scammers out there? Many of them! But NOT all of them! Some of the comments on your article, coming from people who sound to be in the arena for some time, are not fair to the real estate wholesaling community. Why? Because while some claim that “true” wholesalers don’t have a website, how is a NEW wholesaler supposed to present its services to motivated home sellers and to investor-buyers? Bandit signs? Someone else in Biggerpockets already trashed and demonized those.

    I am personally starting a NEW wholesaling business in MA, where investors are happily paying a minimum of $7,000 per deal, as long as they are making a minimum of $30K profits. So for those talking about $2K-$3K as assignment fee, you should also mention that it varies from location to location. Isn’t that a little misinformation on the article? Someone else is flashing that “there is no deal on the MLS that he personally haven’t find and turned down” Wow! So that means that he must be the master of Universe deals in his area! Does he understand how many GREAT deals, never hits the MLS? Does he understand that smart working wholesalers, that create networks with home-sellers, investors, real estate agents, attorneys, banks, mortgage brokers, would have access to many great deals before been posted on the MLS. I strongly believe it was a cocky comment.

    Real Estate Wholesalers is NOT the only way to find great investment deals, but it is another resource. One that has put real cash in the pockets of many smart investors, and that will continue to do so.

    Anyways Marty, keep up the good work and keep them coming. This is how we learn, grow and encourage each other in this river of piranhas!

  15. Franndy, I got my start as a wholesaler. I made money without bandit signs or a website. I did it by knocking on the door of a homeowner in foreclosure, 60-80 doors a weekend for 18 months. When I secured a deal the buyers were easy to find because a) I had good deals and b) I was professional. Sometimes I made 1K, other times 30K. It just depended on how good of deal I struck with the distressed seller.

  16. Marty ,

    I appreciate your effort , your article was a big piece of misinformation on wholesalers. I myself have over 400 houses under my belt and I will say THIS, a deal is a deal no matter how much any selling party makes or how they get the deal any other opinion is EGO or lack of understanding. The comment on how wholesale deals should not come from the MLS made me laugh , every true investor on here knows they do not have time to counter to counter analyze hundreds of deals each week and fight tons of competition to get prices reduced to a reasonable level. So Why not pay a wholesaler to do it for you ? why should you care what they make as long as your getting a deal faster and easier. Real Estate has changed and the Dinosaur Philosophy you are writing on this blog is immature at best, it shows your lack of knowledge in Real Estate Investment. A deal is a deal period you put to much personal thought and emotion into where it came from and how much others are making , if investors where getting deals so easy from the MLS why would they even look at a wholesaler website to begin with? You think Donald Trump backs out of a good deal because someone else is making to much on the deal, or because it was not from a source he wanted it to be from ? would he walk away from huge profits based on this?

    I think my point is made I do not want to go any further as it is futile . I suggest to anyone who read this article you keep your eye on your profits not on personal opinions or chatter. Make Money! and get it wherever you can!.

    • Travis, I let the commenters from my previous post – How to Spot a Wholesale Real Estate Pretender – – help me define a “true” wholesaler. Many of them are experienced investors, like Chris Clothier (quoted in the article). I think you may be missing the point. No one has a problem with a wholesaler making a profit, big or small. The issue we all have is with wholesalers that dress up their deals by inflating the comps and/or taking all the meat of the bone for themselves. That’s not what a wholesaler does.

      The fact that you have responded so emotionally be calling me “immature” suggests you may be using these tactics in your business. The truth hurts.

    • Excellent very well said I agree 100% the poster has dinosaur mentality. A deal is a deal regardless of what the wholesaler makes, If I get 100k house under contract and it is really based off of comps and it only needs 10k repairs at most and I giving it away for 50k, and I got it under contract for 10k, he should not care if I am making 40k on the deal. If he doesnt want it , another will buy it and not care what I make.

      • John, no one here has a problem with a wholesaler making money, a little or a lot. The issue most of the commenters have is with wholesalers that over inflate comps and under state repairs. Since you’re so knowledgeable about the Phoenix market and wholesaling perhaps we can connect offline? I’ll buy you coffee, or lunch.

  17. Marty,

    I am new to real estate investment and do not have enough knowledge to be able to add much insight into this discussion, however I want to recognize the professionalism of your responses on this board. It increases your credibility and makes me want to read more about what you have to say.

  18. Melodee Lucido on

    Sometimes things can get a bit messy when reading all the opinions of investors. As stated in this article wholesalers that get “deals” off the mls are bottom scrapers. Other investors I’ve talked with say they don’t care where the deal comes from as long as it’s a deal.

    Busy investors have told me that they don’t have the time to watch the mls every minit and that their agents often miss something. Some of the most successful veteran investors I follow get 95% of their deals off the mls—-through their agents but still off the mls.

    Maybe it’s just a personal/business preference. It doesn’t seem fair imo to say don’t bring me a deal that’s in the mls. Or maybe it is fair . . . for the next investor/buyer on my list.

    Just my thoughts.

    • Melodee, I think why so many seasoned investors say bring me a deal not on the MLS is because they’re already scouring them MLS themselves, or have Realtors that are doing it for them. I work with four Realtors in Phoenix that sift through the MLS for me everyday.

  19. Here are my thoughts on a few of your ‘experienced’ readers:

    “It seems that there are far too many of these “wholesale pretenders” as you called them who are just pitching crappy “deals” (retail) out there. Anyone can go and find a deal on the MLS, but to find the diamonds in the rough – that’s a skill”

    – Can you describe this ‘diamond in the rough’? What is the process of finding this ‘diamond in the rough’? Do we need to find a tiger made out of sand and go into its mouth to find this ‘diamond in the rough’?

    “I advise wholesalers I come across to at least show me a deal I haven’t already found myself and turned down”

    – Amazing! Do you at least give these chump ‘wholesalers’ very specific details of real estate that will make you salivate and see dollar signs all over your office? Or do you just give generic information like “2 beds, 2 baths, good condition in (this) area of town” then write an article or comment about how wholesalers or horrible after they brought you a deal that you have already turned down?

    “People trying to play middleman with “dead” real estate are the lowest of the low on the totem pole. The late night TV guys encourage people to sell this way and encourage even more people to take their small bankrolls and buy from these sellers. ”

    – What is ‘Dead’ real estate? Is that a house that is boarded up and barely kept together with wires? Can you be more specific on this ‘dead’ real estate and not so much on these ‘late night, scam-guru express, EZ real estate’ guys?

    Now as far as the websites go. Having a website IS a very good idea especially if a wholesaler branches out into other real estate ventures.

    It will give the wholesaler great exposure and bring legitimacy to the business cards they hand out to sellers and other investors, etc. (If the website is done right, of course)

    • John M., professional wholesalers and fix and flippers and/or buy and holders can each help each other expand their business and grow successfully if both are honest. That’s where it all starts. If a wholesaler uses a website to market a crummy property by over inflating values and under stating repairs that is bad business. It makes legitimate wholesalers look bad. The intent of this post is to help BiggerPockets readers understand what not to do in wholesaling. In the original post, How to Spot a Wholesale Real Estate Pretender, I wrote about my own experiences with so-called wholesalers in Phoenix. In each example, a slick website with bad comps was used to entice the reader into buying a bad deal.

  20. Melodee Lucido on

    John M

    Thank you for saying what I didn’t have the nerve to say. This has not been a super empowering article/comment thread. It has some good considerations but things were said in a very denigrating way.

    It’s almost as if most of the people involved in this discussion were never new and learning. Education is best received while IN MOTION imo.

    I do thank the few who stated that it’s not fair to judge the whole by the few who are up to shenanigans. Hmmmm, it’s almost like saying that all investors are shysters because a few are.

    I’m still here and happy to be learning from all of you.


    • Melodee and John M.

      Thanks to the both of you for stepping up for some of the wholesalers who are still learning the business. I have stepped away from several deals that were not good deals, just so that I would not offend my buyers list. So to say the least, all wholesalers are not just out to make a profit some are out to offer a service to the public.

      Thanks Biggerpockets for this website and Thanks to everyone for sharing.

    • Hardly any of Marty Boardman’s articles are empowering, or contain solid information. I also wouldn’t even consider this an article. It’s just a compilation of ‘newbies are stupid and wholesalers are the worse of the newbies’ all because of some wholesalers who either didn’t know what they were doing because they didn’t properly research the niche, or were trying to incorporate retail selling, or trying to scam.

      It’s bad enough that people who are new to the business start off with wholesaling in areas that aren’t geared for wholesaling; most of them come here and read these types of articles, feel real bad about themselves and are no longer motivated. Worse yet, they comment and down-talk themselves with “I’m stupid and a newbie and I’m scared of offending the top players in the business so thank you for this article.”

      • John M., from the defensive tone you’ve taken in so many of the comments here, and the fact that you chose to not leave your last name or link in this thread, makes me wonder if you’re using the very tactics that I and others write about here on BiggerPockets.

        I operated a very successful wholesale business. I never had to lie about my deals to sell them because they were good deals. While I agree a website is a good idea for developing a buyer’s list and marketing properties for a beginner it should not be used to grossly exaggerate values, which is exactly what many of the wholesalers in Phoenix are doing right now.

        Yes, we were all new once. But being new doesn’t excuse anyone from being dishonest.

    • Melodee, I was new and learning once and I never marketed any of my wholesale deals in a deceitful way. The frustration for those of us that deal with these wholesalers is evident from the reactions of the various investors that made the replies I chose to use in this post. While I’ll admit some the comments could have been more constructive in nature I thought it was important to document the reactions.

      Unfortunately, there are more than just a few out there using these practices. That’s why I felt it was important to help our readers understand what not to do.

  21. Melodee Lucido on

    Thank you John. Had I not been a two percenter I would have walked away with just that very thought.

    The way I live my life is to always empower people by seeing them as they are in their highest form and living their dreams. From there I can offer skilled instruction—-if they want it—and encouragement to never give up; be UNSTOPPABLE!

    Sad that some think that they can make anything better by squashing others.

    When I lift you up I am lifted. When you succeed everyone around you succeeds. It’s a Law.

    This has been great to participate in! Thanks to all

    • Melodee, how do you instruct, uplift and empower someone that is comfortable misrepresenting themselves and their bad real estate deals?

      Again, the intent of this post was to educate our readers on what to do, and what not to do when wholesaling. Chris, Charles and Andy all offered constructive advice for the aspiring wholesaler. We as an industry should call out the bad apples, regardless if they’re wholesaling, flipping, leasing, or financing.

  22. This is all great info! Love the post and article’s on here.
    I know that once you have the right product at the right price, you will find abuyer. I want to start a major, capture nothing but leads from traditional and new media in a major 1 months push with a large budget in a major market.
    Any advice?

  23. isn’t the main problem about getting “bad deals” from wholesalers usually the fact that the numbers don’t work b/c of one or several factors:

    1. bad comps – not accurate fmv;
    2. mismatched quality of rehab with certain buyer(s) – where one may think a 10k rehab is sufficient, the buyer’s standards of rehab may be higher (i.e., closer to 25k);
    3. aggressive t/a time for rehab and holding period for the property… maybe assuming a 10k rehab with a 2mo t/a (turnaround) (rehab + sale) when it may really need 4-6mo’s – HUGE DIFF in holding costs;
    4. understated costs

    clearly there’s a miscomm of estimates and assumptions… while the wholesaler may truly believe their #s are compatible w/most of their buyer list, maybe just getting on the same page for calculations is all that’s needed. on the other hand, maybe the wholesaler IS a newbie fresh from a guru bootcamp. whatever the disparity, wouldn’t this disagreement in what a deal is be easily resolved by simply spending some time talking with their customer – the buyer?

  24. You emphasized experience. If you are a beginner wholesaler and haven’t done this before but have done your research and avoid these weaknesses how do you establish credibility sellers and buyers?

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