Flippers: You’re the Expert – NOT the Wholesaler!

by | BiggerPockets.com

The conversation…

Wholesaler: “Hey, I have a smokin’ hot deal for you! It will sell for $125,000 and only needs some carpet and paint. Should cost you around $7,500.”

Investor: “Really? Wow! That’s great. I want it!”

Fast forward 3 months…

Investor: “Mr. Wholesaler, I’m in the third month of this rehab and I’m already at $20,000 and still haven’t even gotten to carpet and paint  yet! On top of this, I spoke with a few other people and they looked at me like I was crazy when I told them I planned on selling it for $125,000!”

Wholesaler: “Let me call you right back”

The opening portion of this conversation has happened multiple times with me, and if you are getting into the game on the side of being “the flipper”, buckle up as it is only a matter of time before you get your first phone call or email like this. Now don’t get me wrong, do I think this is a scummy way for a wholesaler to approach another investor? Not at all.

First off, the deal could literally be a “smokin’ hot deal”, so the wholesaler may not be trying to ‘sell you’ at all, just simply telling you how it is. On the other hand, he could be trying to sell you a load of garbage, but even in this case, welcome to the real estate game.

Key point, it is either your money or your investor’s money, so YOU ARE THE EXPERT. This is one of the few areas where I believe being humble and having little arrogance is bad. I don’t mean in the sense of how you present your physical self, but I mean the way you are thinking up in your mind. You can be humble and non-confrontational on the exterior when dealing with a wholesaler, but up in your head internally, your attitude needs to be:

You are trying to screw me. I’m smarter than you. I know this market better than you. I have better resources then you. Bring it!

By no means are 100% of wholesalers trying to ‘screw you’; however, there are plenty of wholesalers out there who try to present themselves as experts but are pushing a slim to none profitable deal to you. Whether it is intentional or genuinely a lack of knowledge on their part and they truly believe it is a good deal, at the end of the day, intentions don’t mean squat, the NUMBERS DO!

The good wholesalers have all these numbers prepared for you (accurately), but YOU ARE THE EXPERT, so you need to do your due diligence and confirm what you are being told. Your method of due diligence can range from checking things out yourself to calling up a few 3rd party agents/contractors and getting their thoughts on things. It doesn’t matter how you confirm the information, what does matter is that YOU DO IT!

Of course all this requires more of your energy at the start. The ideal system would be to have people bring you deals, and for you to be able to simply say, “sounds great, I want it”, but that comes with time. You need to interview wholesalers (via the deals they bring you) and build relationships from there. Once you have done a few deals with someone, your time at the start will begin to decrease more and more as your trust increases more and more due to the solid deals and accurate numbers.

Along with the above, I should make note that if you’ve worked with a wholesaler multiple times, you can back off this attitude as a relationship forms, but if it is your first time dealing with a wholesaler, this is the mindset you need to bring to the table.

I know the real estate gurus love to paint the picture of investing as you sitting on a beach somewhere, sipping your margarita, and then taking a phone call saying “yey or ney”, but real estate is a business, and as is the case with anything in the business world, it all comes down to who is better prepared. Now that you know you don’t get to sit on the beach and sip drinks… REMEMBER…no/none/nada/nip excuses of “well the wholesaler told me this”, or “the wholesaler told me that”… not valid! Neither your wife/husband or your investor wants to hear it! They are trusting you with the money so –  Be prepared. Do your due diligence. YOU ARE THE EXPERT!

Photo: Allison Felus

About Author

Clay Huber

Clay (G+) is a licensed real estate agent and the owner of Huber Property Group, LLC, a real estate investment company located in Grand Rapids, MI. His company purchases distressed properties with the main exit strategy of fixing them up and reselling with owner financing, particularly, land contracts.


  1. Clay,
    Thank you for your article. Sooooo true about Wholesalers & we have encountered so many of them & haven’t found one that knows the importance of true ARV & our due diligence. They expect us to take their word & their feelings get hurt if we want to proceed with our complete due diligence. Maybe Wholesalers will read your article and think twice before unloading properties that don’t reflect their true value. Investors who don’t have any RE background or experience, please be extra careful with Wholesalers!!!!!!

    • Real estate is a business. If people’s feelings are getting hurt, they should probably look for another career. Besides, a “true” wholesaler won’t get their feelings hurt if you want to do due diligence, it’ll cause them to just respect you all the more since it shows you know what you’re doing and not a tire ticker.

  2. Hi Investors’ I am a wholesaler In Los Angeles, CA I always tell my investors that I work with to do there due diligence on any property I have to offer!!! I have no interest in throwing out crappy deals that will only ruin my relationship with my investors and have them not wanting to deal with me anymore that’s not good for business….. I am in no rush to push out a property unless I have true ARV!. I’m new and don’t act as if I know it all about real estate because I feel like with that attitude you miss out on actually learning! It’s ok to be honest and say your new as long as you have the skills to produce accurate information .I would say it doesn’t matter new or experienced!. So with all that said I would like to connect with all investors who like to get accurate ARV and ofcourse you must do your due diligence but I’m sure you will find out I can be trusted!!!

    Rhonda O,

    • Rhonda – I 100% agree that the ARV is an important variable; however, I would also argue that the renovation cost variable is just as important. They both work hand-in-hand and if one is underestimated, it can severely damage the whole equation.

    • Agree 100%.

      Not all deals are what they appear to be, so while many truly good deals ‘are’ obvious, I always make sure I’m not missing anything, no matter how “obvious” things seem.

  3. Melodee Lucido on

    It amazes me that this is such a common issue in rei. It would be like opening a business and serving rotten food!!

    I am preparing to re-enter rei as a wholesaler and will deliver impeccable service. As Rhonda said in her great comment it’s not good to act as if one knows it all. People don’t trust someone with an attitude like that—-when they can feel the fake.

    Fake it til you make it shouldn’t apply to putting deals together for sure! It’s all about building relationships and going for the long term. The tortoise is the one who won the race ; > I will build slow and steady.

    Thanks for the article!

    • Melodee, no doubts the tortoise wins in the long run.

      I should note that there are plenty of “good” wholesalers out there who deliver value, but as is the case with anything, there are always “bad apples” that come with the package too.

  4. Violetta christensen

    I think the responses to your writing spoke for itself.. in regard to wholesalers …the fact is everyone needs to be a professional and do their OWN due diligence! Remember if you are old enough to be in the game you certainly should be old enough to know to check and double check figures to protect your own interest regardless of what business you are in this passing the buck that some the wholesaler misled you is better left out on the playground. Everyone you deal with hopefully is an Expert in their field and many of these fields overlap ..Many of us in our careers have been relators.. contractors….retail sales persons plumbers and roofers etc and some haven’t done any of these things just wet behind the ears out of school . So the word Expert …I would say that is a broad term in this line of work depending on what hat you are wearing that day?

  5. Luz Pagan

    Great article,

    That happen to me with a wholesaler. He told me the repair of the pool was $4,000. He even sent me an email from the pool person showing the amount. When I called the Pool guy to complete the job it was $8,900. He told me that the Wholesaler asked him to sent the breakdown of the pool in two separate email. That is how the Wholesaler fooled me. However, I learned my lesson and now I am counting with my own contacts.

  6. Jason Palmer

    This is exactly why I don’t provide repair estimates. I’m not a contractor, and even if I were, my estimate could be thousands off from their contractor’s estimate and they’ll think I’m trying to scam them. It’s a no win situation. I also don’t provide official “comps”, because those are like tax returns. They’re subject to too many variables, and no two people will provide the same comps for one property. I do provide recent sales data, but never pass it off as an official CMA. I tell everyone to perform their own due diligence and make a decision. I find that doing it this way keeps things above board and ensures that the investor buys based on their own analysis and is confident in the product their buying.

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