Wholesalers Get a Bad Rap — But They’re Essential to Investors for These 3 Reasons

by | BiggerPockets.com

What value have brought to you as an investor?

Recently, I started a forum post here on BP asking that same question, and it got a LOT of action! People seemed to either love wholesalers or hate them passionately — there wasn’t much in between!

In the real estate wholesaling industry, we get a pretty bad rap a lot of the time simply because of the small percentage of people who take actively take advantage of others. Those guys really make it a lot harder for the rest of us out there!

As the saying goes, “One rotten apple will spoil the whole batch,” and I’ve found it rings more true for wholesaling than a lot of other industries.

But today, I want to challenge the notion that ALL wholesalers are a waste of time and highlight the top 3 ways a relationship with a good one could be essential to your business.


Related: The Best (And Most Honest) Way to Wholesale Properties in Any State

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3 Ways Real Estate Investors Can Benefit From Wholesalers

1. Wholesalers can save you money.

The biggest benefit I believe you can find in working with a local wholesaler is in the savings you’ll get not having to do your own direct mail. In my business, we are spending close to $10,000 per month in marketing costs, not including a two full-time salaried employees who handle all the incoming calls!

What if you never had to worry about spending money on marketing? What if you had a connection to someone who knew exactly what you were looking for and then brought you the perfect deals for your business, month after month after month?

That is a POWERFUL relationship to have, and if you establish it correctly and get to the top of that wholesaler’s buyers list, a lot of the time they’ll end up giving you a discount on their inventory simply because they know that they can trust you.

I personally have sold properties up to $5,000 off of my list price simply because a buyer had history working with was interested, and I knew that they’d close on time without any hiccups.

So, as you can see, working with a solid wholesaler is a HUGE advantage.

2. Wholesalers can save you time, energy, and frustration.

You want to know something about me? I absolutely hate mowing my lawn! For years now, I’ve simply hired it out because I feel as though my time is far more valuable than the $30 per mow, and I simply would rather do something like play with my kids or spend time with my wife than take time out of my busy schedule to mow the grass.

You know what a lot of full time investors hate? Handling motivated seller calls — and I can understand that! It’s not easy dealing with people cussing at you and giving you death threats on a weekly basis.

And then there is the time that it takes handling all of that!

In my business, as I mentioned above, we get so many calls that I have two full-time employees solely dedicated to the process of screening people and answering the phones!

What if you could avoid all that headache and hassle, and instead simply go to a nice website or your email inbox and scroll through the inventory and select which properties you like?

Wouldn’t that be awesome?

Establishing a relationship with a good wholesaler in your market can really make finding your deals that easy!


3. Wholesalers can make you money.

Now, I don’t want to be Captain Obvious here, but if you establish a relationship with a wholesaler — who, again, really understands you and your needs — once you guys build rapport, the wholesaler will do all he can to get you the deals you love, over and over again, which means money!

Related: The Top 6 Ways Wholesalers NEED to Change How They Do Business (According to a Wholesaler)

As wholesalers, we love repeat buyers we can count on and typically will really nurse those relationships well.

For example, I sent out Christmas presents to all my top buyers last year. I’ll also send them random gift cards or tickets to events, just to say thank you for their business.

I also, as I mentioned earlier, will normally be pretty comfortable selling to them cheaper than, say, a brand new buyer, simply because I know them.

So you see, though there are some bad apples out there in real estate wholesaling that definitely need to be thrown in the trash, we’re not all bad, and, in fact, we should be an essential part in how you do business.

Investors: Do you do business with wholesalers in your market? Why or why not?

Let me know with a comment!

About Author

Brett Snodgrass

Brett Snodgrass is a licensed real estate broker and wholesaler who hails from the Indianapolis metro. His mission in life is to glorify God by serving as many people as he can through his real estate business. He has a pretty active community growing on Facebook and is also the founder of SimpleWholesaling.com Come check it out now and connect!


  1. I am in metro Chicago and I have tried to work with wholesalers for 15 years. I have bought approximately 100 houses ( still own 40 of them), so I am a serious investor and the real deal. I have bought exactly one house from a wholesaler. He found a nice house, put it under contract, put it on the MLS and I called him and we made a deal. He made a few thousand after putting no money up and maybe 5 to 8 hours of his time. I told him to send me more deals and I never heard from him. I get postcards all the time from so called investors. I call them and they never call me back. I call the guys that put up bandit signs and ask them to call me if they have a deal in my market area. Never hear from them or when I do, it is to flip a piece of junk in Harvey ( ghetto) Gary, IN (ghetto), or the south side. All areas that I specifically told them I don’t want.

    So yeah, in Chicago, we have a bunch of lazy wholesalers that are only interested in buying crap in the hood and flipping it to a moron investor. As soon as they find out I know what I am doing ( licensed Realtor, seasoned landlord and rehabber), they run the other way. They seem to prey on newbies they find at real estate seminars or the local investment clubs.

    It is getting harder and harder to find good deals on the MLS or the HUD list. You are correct, I don’t want to waste time with a large marketing operation. Managing 2 or 3 rehabs at a time and 40 renters is my full time job.

    I have another investor buddy and we both feel the same. There are no real wholesalers in our area.
    Somebody wake up.

    • Philip Ellison on

      I would like to help you find what you are looking for in your area. Although I am not from that Area i have built buyers from around the globe as well as sellers. I can put some marketing things together via the internet to generate interest in your desired area. Full honesty the smaller and more specific your area that limits opportunity.

    • Joseph Mcmahon


      Please message or call me, I’m in the Chicagoland area. Let me know the kind of properties you’re looking for and in what areas and I will keep you in mind as my leads come through. I’m not greedy, I’m working to make sure everyone involved makes money…As you mentioned, there are some people who are just plain lazy, and then there’s those few of us who work hard and make things happen. Some people (me) have mouths to feed at home so there’s no time to waste.


    • Brett Snodgrass

      Gary, Thanks for your response, seems like you have worked with a bunch of a bad apples. There are many lazy wholesalers out there I agree, but just simply was stating there are still decent wholesalers out there that do work with reputable investors. I love to work with reputable investors here in Indy.

      I always love to hear others opinions though, as when there are a lot of bad ones, it just helps make the good ones shine. 🙂 Thanks, Brett

    • Brett Snodgrass

      Hi Gary,

      Thanks so much for your insight and feedback! I’m so sorry that this is your experience 🙁 .

      It’s so said that this is such a common experience and it’s the very reason why my staff and I are coming out with resources to help raise the morale and expertise of the industry.

      If you ever want to branch out into the Indy market, I’ll make sure to do all I can to change your mind about Wholesalers, as there are those out there that are legit -I promise!

    • Corinthus Wilson

      how are you doing Gary I am from Chicago and very interested about wholesaling. I would be honest with you i have never done a deal before but I’m willing to learn. I’ve been reading ,listen to podcast and taken some courses, it’s time for me to take action if you give me a shot and teach me what i need to know i will work hard find killer deals i just need someone to teach me the correct way.

  2. Jared Garfield


    This is a really nice post, and it focuses on the very best of what I think is possible for the most upstanding wholesalers. Like Gary, in my experience, I have bought 5 or 7 properties from wholesalers in 17 years. Three of those at least were people trying to flip in cash flow areas of town. They had way over renovated for what the market would bare and were glad to sell just to break even or take a small loss and get their capital back. For us the cash flow numbers worked really well, and it was a “win-win” deal. Early on in my career I bought from a couple of Atlanta “HomeVestors” franchisees because they had a lot of inventory and wanted to move a couple, and they really knew what they were doing when they bought, they made a profit and I did well also.

    It’s amazing to me that we live in a time where nobody would ever generalize on race, nationality, religion, sexual orientation without being rightfully scolded, yet people are quick to say, “ALL WHOLESALERS ARE ____,” or “ALL TURN KEY PROVIDERS ARE _____.” Of course real estate agents don’t have the best perception, and you could add that to a long list. There are some really bad and good people of all categories, and I’m open minded to believe the same about “Wholesalers” and “Turn Key Providers.” However, I would go in with both eyes wide open.

    Typically though when wholesalers call me they have properties that they have not provided any value on: no renovation but they want a huge profit for tying it up, but they tied it up $10,000 more than I would have paid. So many times they have bought some course or are trying to do things creatively because they don’t have capital. Often they are showing me properties from the MLS that they got under contract, with no intention of closing if they can’t get a newby to pay their market, and usually the ARV that they claim the property is worth is not accurate.

    My business could definitely use talented people who knew the market, provided value, knew how to drive for dollars and negotiate well based upon improvements needed to a property, and who had an true understanding of after repair value. If you or any other wholesalers can live up to the ideals of this blog, please send me a connection request and I will gladly see if there is synergy. Just know that you have one shot to impress.

    • Brett Snodgrass

      Thanks Jared for the comment. I see you are from Atlanta, We just did a Podcast with Ken Corsini from your neck of the woods. Anyhow, This is a chance for Atlanta Wholesalers to reach out to you… and I hope that you are able to find some good ones to work with.

      Honest Truth, I buy properties from wholesalers myself, probably 1-2 per month, and they seem to leave enough meat on the bone for myself to make $ and the end investor. So I know there are decent ones out there, but sometimes it’s like looking for treasure in a junkyard. Thanks, Brett

      • David Begley

        Brett and/or Sean Cole, in reading your blog and subsequent posts, I assume you two are a couple of the “good apples”, rather than the majority I’ve had the displeasure of working with to date; so I’d like to ask a couple of questions regarding your business practices:
        1. Do you ever try to “wholesale” properties that are listed and/or not sourced as “fresh” off-market deals?
        2. Do you request or require a non-refundable deposit?
        3. Do you engage in getting control of the properties through an Assignment and then transfer the property to the end buyer through a double-closing?
        4. If #3 is yes, do you stick the end-buyer with both sets of closing costs and if so do you disclose that both verbally and in writing prior to actually signing the contract?
        5. If #3 is yes, do you have the wherewithal to close on the purchase should the end buyer not close and as a matter of practice, do you purchase in that situation?

        The above five issues are the items that tend to send me and other investors into orbit if not handled properly, and most of the guru seminars and books encourage these deceptive practices. I look forward to your reply.

        • Sean Cole

          David, I’ll do my best to answer your questions with the caveat that I’m answering for my company only.

          1. We don’t make any claims about where we get our deals or whether they are “fresh,” “off-market,” or anything else. The only claim that we make is that our properties are priced such that you’d have been willing to pay the seller that same price whether I was involved in the transaction or not. In other words, you’re not paying extra for my involvement. Of course, by definition, you could have paid what I paid but the customers that buy from us see value at the price we offer AND the other services we provide.

          2. Yes. Having said that, we always make the promise (and have delivered several times) that if you back out and we are able to secure another buyer, we will refund that deposit. We also offer buyers as much time to do their due diligence prior to contract signing as they want or need. Here’s the thing, David, if you back out of our contract the day before closing because you don’t like the way the sun shines on the back yard, why should I be the one to suffer the loss of my earnest money deposit due to your non-performance of the contract terms? You wouldn’t get your deposit back from the bank seller or owner seller either.

          3. This question reads like 2 different questions to me, so I’ll try to decipher. If a customer asks me to assign my interest to him, we will if we can. Otherwise, we will double close (most bank sellers won’t allow assignments).

          4. We’ve chosen to price our assets transparently. Our marketing materials lay out an estimate of all costs associated with the transaction including paying both sets of closing costs (which we cap and eat anything over that amount). The financial analysis we provide our customers includes those costs as well. The other option that we have is to over-estimate those closing costs and provide an out-the-door price. Not only do we disclose those costs on the marketing materials, on our website, and in our emails, it’s in the contract in 2 different places and we won’t allow signing of the contract until they’ve acknowledged reading the section regarding closing costs and the deposit. It’s my opinion that our customers save money in the long run through our present pricing model.

          5. We’re presently wrapping up the rehab of a house that a customer backed out of and we closed on. We didn’t hold his deposit in this case.

          I certainly see how some folks only want to see wholesale offerings from 100% off-market deals (whatever that actually means – does a sheriff sale deal count? how about an auction house not listed on the mls? what about an expired MLS deal?). As I’ve shared in other forum posts, we also hear complaints about how much we make on these truly off-market deals (probate, as an example).

          What I’ve come to realize and am working on accepting is that we’ll never be able to make all investors happy. More importantly to me, we don’t NEED to make all investors happy. Some folks will just never buy from us for a variety of reasons, whether it’s that we sometimes offer MLS deals, or that we make too much on probate deals, or that we are “making money for tying up deals.” The suggestion that I’d make to investors carrying these thoughts is that you shouldn’t let the deal source or how much money the other guys is making prevent you from doing a good deal. We exist because our customers think we provide win/win situations.

        • David Begley

          Sean, thank you for your honest reply.
          1. Anything not “Active” on the MLS would be considered off-market for me. In other words, if a broker/agent has it listed, it isn’t off-market and isn’t a wholesale deal. All others, fair game.
          2. My pet peeve here is, as a real estate agent and investor, why can’t Wholesalers approach this the same as a normal real estate transaction – an Earnest Money Deposit held in escrow with equal protections for the Buyer and Seller? I don’t mind the minimum $5,000 amount, or whatever is requested, but I do object to the one sided nature of a “non-refundable deposit”, especially when those Wholesalers are requesting this on top of the EMD. It seems to me that any Wholesaler operating above board wouldn’t mind using the same language as found in most all real estate contracts.
          3/4. As long as you disclose this up-front, both orally and in the written contract, I have no problem. The Wholesalers that hide this fact in the small, boilerplate caveats or don’t disclose at all are the ones that need to be shot!!
          5. As long as the Wholesaler purchases the property from the Seller if the Buyer walks, I would consider the Wholesaler reputable. Otherwise, not so much.

          Thank you for taking the time to respond and I wish you were in Atlanta!

    • Jacob Anderson

      I like your comments. I also keep both eyes open. I have tried to contact wholesalers also with no luck, I even tried some on craig’s list. When they see that I run numbers I never seem to get a response back. In my first contact I am up front that I rehab houses personally and that scares them away, I suppose. Well I think that is for the better because I haven’t wasted my time with a fake wholesaler.
      Have a great day!

      • Sean Cole

        David, I see what you’re saying regarding the EMD and Deposit. Candidly, it was a blind spot for me because we appear to handle this differently than other people, so I wasn’t sure what the problem you had was. I think I understand now.

        As I’ve come to learn, many wholesalers who are assigning a contract collect a non-refundable deposit and they get a separate reimbursement for the EMD they made to the seller. We don’t operate that way and I’d candidly never considered it.

        I make an EMD to the current owner of the house and generally have very few contingencies that last until the scheduled closing of the transaction. We we do a double closing deal, we collect a deposit from the investor buyer that’s roughly equal to our EMD. There’s a few reasons that I use this amount – first, it helps to create some financial discipline and incentive for me to get the deal closed when I haven’t gotten any profit prior to closing; second, it covers my financial loss if the investor doesn’t come through.

        The deposit that we collect is similar to an EMD where there are no contingencies in the contract for the buyer. It has to be a deposit because we hold it instead of depositing it with my real estate broker (agents in Ohio can’t hold EMD in their own accounts). We appear to also make significantly larger EMD than most wholesalers (I’ve seen $1 or $50 many times) – usually over $2,000.

        As I said earlier, I’m happy to allow all the inspections and due diligence an investor wants to conduct prior to contract signing. Once the contract is signed and if I’m out of contingencies with the seller, we just can’t eat the loss if you change your mind.

        On an assignment deal, by the way, we’d never collect a deposit and a reimbursement for the EMD. It’d still be the same as the EMD.

  3. David Begley

    For the most part I agree with your 3 ways REIs can benefit from Wholesalers. Where I strongly disagree, based on my own experience, is the position that a few bad apples can spoil the batch. My experience is that one has to experience a whole spoiled batch in order to find one or two good apples. I am inundated with “Wholesalers” that are hocking listed properties or recycled properties that are way overpriced and they’re just looking for a sucker; or those wanting a $5,000 “non-refundable deposit” which is ridiculous; inflated ARVs and rehab costs pulled out of thin air are the norm; trying to sneak both closing costs on the end buyer on double-closes; not disclosing double-closes; etc, etc. These types are 90% plus of the Wholesalers I encounter. I’d love to develop a relationship with a good, honest Wholesaler, but that has been as elusive as finding a unicorn. I pay cash, can close quick, but can’t seem to find the right pipeline. I wish it were different.

  4. Art G.

    In my neck of the woods deals are super hard to locate. So my buyers love me. They know that I am saving them time and money but more importantly making them money because deals are so incredibly hard around here. I take the time to learn exactly what my buyers are looking for and then balance the work I pass off so that every one gets some action. I only work with a handful so that I have strong relationships with them.

    People do not realize how difficult it is to be a wholesaler. We earn our fees. For every deal we bring there were a dozen we worked on that didn’t pan out. We work many hours, visit a lot of homes, talk to unrealistic sellers, hash out deals, write up contracts and then get rejections. We get yelled out, chewed out, accused of trying to take advantage of the seller…. and all the while we are trying to help everyone. We help the seller get out of a bad house that no one else would buy, we help local investors beautify our city, we give jobs to the trade workers and suppliers, and most importantly… we help someone realize their dream of owning a beautiful home!

    • Jo Bryant

      I have done deals in Atlanta, Texas, Louisiana and now in Phoenix – flipping and wholesaling and have never had an issue with trust. However I don’t believe in the non-refundable fee situation when I’m in a respected relationship with an investor/end buyer. I believe in contracts and assignments. If we are building a relationship there should be no reason you should not be able to inspect the property or get a deposit back if you change your mind. Trust is EVERYTHING in this business if you plan to stick around. I feel you also have to bring more to the table. Having prior marketing and design experience, I am able to assist in design ideas in the flip rehabs, as well as transparency with my sellers and buyers.

      Being a wholesaler is hard work, and you’re right Art a GOOD wholesaler earns his/her fees. I love the pros that you’ve listed here as well – we also do a lot of good because we’re out there sniffing out homes in the city, helping investors and sellers that otherwise might lose out.

      All wholesalers aren’t the same. You just have to build that relationship and stick with one that has proven to have your best interest and knows what you want.

      • Brett Snodgrass

        Hi Jo thanks so much for your comment, and I really like what you said about all wholesalers aren’t the same! We got a lot of work to change the reputation of the industry, but there are good eggs out there, even though they may be a rare breed, thanks Brett!

        • Jo Bryant

          Thanks Brett and I agree! One of the things that I try to do to change the way wholesalers are looked at (as I’ve been on both sides of the fence) is to recommend they spend time getting their business set up and not be afraid to spend a little money. It pays off in the long run.

          A great presentation to an investor buyer spending their money should be expected. Knowing how to answer basic fundamental questions about the property/deal should be expected and being able to back out if there are issues or things that are not as stated should be expected. Transparency, professionalism and researching your buyer when possible are all just common sense things that build credibility when presenting yourself and a property to a buyer.

          Knowledge, credibility and professionalism will build the trust….and hopefully the confidence in wholesalers again!

  5. Sean Cole

    I think we do ourselves a disservice by not mentioning other ways that a professional and experienced wholesaler helps an investor with their business:

    1. Contractor referrals. We act as a central hub for many of our investors for times when their regular guys are too busy for their job or it’s time to move on to a new contractor. We cultivate relationships with investors all of town so that our customers have someone to call when they need a contractor on short notice. This saves time, money, headaches, etc.

    2. Design assistance. Sure, anyone can turn on HGTV or DIY and see those TV shows. Those aren’t local to your market, however. I literally see pictures of hundreds of houses EVERY SINGLE DAY at all price points in my market. We can not only tell you that it’s time to stop painting every wall beige, we can tell you the exact colors that people are using, where to find quality materials at an affordable price and help you tie it together.

    3. Resale. I’m a licensed real estate agent, as is everyone in a sales function at Craftsman Properties. We get our customer’s houses sold at a fraction of the cost a typical agent charges, and there’s no chance that we don’t know more about that house than every other agent in town. It’s not just saving money – it’s far more efficient when our customers use us to list their house at resale.

    4. New opportunities. Many of our customers want to rehab houses only near where they live. That’s fine, but those areas yield smaller returns as a percentage of investment than other neighborhoods. Because we buy all over our 4 county area, we regularly help our customers uncover areas that they would have never considered, but are safe and far more profitable than staying in the same neighborhood they live in.

    5. Blame. Look, not every deal goes perfectly, no matter what the deal source is. It’s human nature to blame someone else when a deal goes sideways. Maybe the house needed more work than you thought. Maybe it sold for less. Maybe the buyers were jerks. Whatever it is, we make it easier to find someone to blame if you bought the house from us. Even better, you don’t have to give us credit when the rehab gets done cheaper and quicker than you thought PLUS you sold that house for more – that’s all you, buddy!

  6. Philip Ellison on

    @Bob Buroszki
    I am a new wholsaler to the industry and my goal is to change the way business is done. One of the things I have found is GREED is the driving force behind the bad apples. Most wholesalers make money off of charging other people to learn the business. I spent 30 bucks on two books and have started to build my business the right way. I would love to team with you on deals or partner on deals or use your services to provide for real estate investing opportunities.

  7. Frederic Kloman on

    I am new to the profession but the company I work for has been in business for 10 years and since then we have done over 5000 homes from the distressed market in Florida. Because of the sheer volume of deals we average about 40-60 homes per month in the Tampa/Orlando/Jacksonville/Miami markets. Since we focus on volume rather than margin we have gained a lot of loyal investors who do business with us year end year out. A lot of investors I talk with have the frustration that a lot of wholesalers do not have full control of the property they trying to sell. All of our deals are proprietary. We spend significant amounts of money in marketing costs through mass marketing and flyers finding properties “off-market” you normally would not find on MLS. Yes, we do require a non-refundable deposit and have a 0 day inspection period, however if I can not provide a marketable title, or there are monetary fines or liens on the property you are not forced to close and are entitled to your deposit back. Unless we already know there is confirmed sinkhole activity on a property we also do not force our buyers this to close on properties in Pasco, Hernando, and Pinellas counties were there is a sufficient amount of sinkhole activity and the number one worry most of our investors who search in the north Tampa market. With the success we have had in South, Central, and North Florida, we are moving into the Atlanta market next month as we continue to grow as a reliable source of investment properties. I would like to see what our firm can do in helping you find properties throughout Florida.


  8. Donald C. Twitty Sr

    Hello, Bob
    My name is Donald, which part of Florida are you working in. I’m a new wholesaler in the Orlando area. I’m looking for experienced investors to help me do this business the right way. If you would like to talk more please answer back. Thanks for the great post, hope to hear back from you. Donald

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