{"id":145171,"date":"2022-10-14T12:57:00","date_gmt":"2022-10-14T18:57:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=145171"},"modified":"2023-08-08T15:46:53","modified_gmt":"2023-08-08T21:46:53","slug":"buy-deals-from-wholesalers","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/buy-deals-from-wholesalers","title":{"rendered":"How to Buy Great Deals From Wholesalers as the End-Buyer"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC5812961187&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Wholesale real estate has&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/i-will-never-trust-real-estate-wholesalers\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">a controversial reputation<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and has even faced legislative restrictions in various places such as&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/oklahoma.gov\/orec\/resources\/blog\/wholesale-act.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Oklahoma<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/whyy.org\/articles\/wholesaler-or-huckster-philly-council-passes-bill-to-curb-real-estate-scammers\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Philadelphia<\/span><\/a><span data-preserver-spaces=\"true\">. Regardless of the legal and ethical considerations, however, wholesaling can be done in an above-board way. Furthermore, wholesalers can provide some very good deals for end-buyers.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Unfortunately, most of their leads aren\u2019t any good, and it\u2019s rare to get one you can fully \u201c<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/brrrr-method\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BRRRR<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;out of\u201d (i.e., 75%&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/glossary\/after-repair-value-arv\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ARV<\/span><\/a><span data-preserver-spaces=\"true\">), but they do have some good deals, particularly the quality wholesalers. And you\u2019ll quickly discover that&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.investopedia.com\/terms\/p\/paretoprinciple.asp\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Pareto\u2019s Principle<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is doubly true with wholesalers. A small number do the vast majority of the deals.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, to have success buying from quality wholesalers, it\u2019s important to know how to approach buying from them.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Understanding What\u2019s Important to a Wholesaler<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">When your new and learning <a href=\"https:\/\/www.biggerpockets.com\/blog\/find-real-estate-wholesale-deals\" target=\"_blank\" rel=\"noreferrer noopener\">how to find wholesale properties<\/a>, one of the first things a wholesaler does is build their buyers list as big as possible. Then they quickly learn that most of those \u201cbuyers\u201d are unreliable. As I noted in&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/2014-11-12-3-tips-for-wholesalers-from-an-end-buyers-perspective\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">an article way back in 2014<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;on what wholesalers can learn from end buyers, it\u2019s important to \u201cnarrow your buyers list.\u201d This way, \u201cyou know these people can actually close,\u201d and the buyers actually feel like they\u2019re getting \u201ca good deal versus a piece of spam.\u201d<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Just as the large majority of wholesale deals\u2014particularly the good ones\u2014are done by a small number of wholesalers, the large majority of wholesale deals are sold to a handful of end-buyers. Pareto\u2019s Principle applies once again. I have heard this same story from just about every successful wholesaler I know. Wholesaler Sam Craven, for example, noted on the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/2013-08-29-flipping-wholesaling-plan-sam-craven\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets Real Estate Podcast<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;that \u201cWe have a buyers list of 990 people, I think, at this point, but 90% of our properties are sold to the same five or six people.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Another wholesaler&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/batchleads.io\/blog\/how-build-a-successful-buyers-list-as-a-wholesaler\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">puts it like this<\/span><\/a><span data-preserver-spaces=\"true\">,<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u2026[W]ith a smaller list of buyers, it is easier for you to get to know each one, their likes and dislikes, and begin to foster a long-term relationship. Think of yourself as the custom deal locator or seller\u2026 Don\u2019t get caught up in thinking that this numbers game is all about massive lists of buyers. You need to cultivate a quality list of legitimate buyers whom you know are primed to act.\u201d<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">So, what this means is that wholesalers (at least the good ones) are predominantly looking for a handful of high-quality investors that they can sell multiple properties to.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This might be disheartening if you are just getting started or don\u2019t have the capital or desire to close more than one deal a year or something along those lines. That by no means makes it impossible to buy from a wholesaler, though.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">While it will put you at a disadvantage, wholesalers are not dead set on only selling to a handful of investors. And they always want to find that next consistent buyer as there will always be some churn amongst their best customers. And even if you just buy one a year, you can still work your way to the top by providing what they really want: someone who can actually close.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Being Able to Close (Quickly)<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">It\u2019s important to remember that <a href=\"https:\/\/www.biggerpockets.com\/blog\/wholesaling-strategy\" target=\"_blank\" rel=\"noreferrer noopener\">wholesalers<\/a> get a property under contract with the ability to assign that contract to another buyer at a higher price. They then make the spread between the price they have it under contract for and what they can assign it to the end buyer for. Thereby, wholesalers are usually under the gun to close a property, so the ability of an end buyer to close quickly is essential.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The faster you can close, the better, as wholesalers will often want to close within 7-14 days. Furthermore, sometimes they have a hard deadline and need to close by a certain date. From time to time, wholesalers can push that date back with the seller, but many times they can\u2019t. And if they cannot move the close date, they will lose their <a href=\"https:\/\/www.biggerpockets.com\/glossary\/earnest-money\" target=\"_blank\" rel=\"noreferrer noopener\">earnest money<\/a> and any potential money the deal could have made.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This means it\u2019s critical to be able to close reliably.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Wholesale deals are usually not the ones you will want to (or be able to) get a bank loan on with a 30-day close and 15-day inspection period. Therefore, if you want to go after wholesale deals, it\u2019s important to either have cash on hand, find a private lender (or a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/hard-money-loan\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">hard money lender<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;who can close quickly), or use a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/heloc-buy-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">HELOC<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In addition, it\u2019s not only important to be able to close, it\u2019s important to actually close.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Usually, wholesalers won\u2019t give you an inspection period for due diligence. Sure, you can do some, but whatever earnest money you put down is usually hard on day one. (One wholesaler we do a lot of business with demands $5000 earnest money that goes hard on day one.)&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Now, if you find something really bad with the property, you should ask to retrade on the price or back out. After all, everything is negotiable. But generally, that\u2019s a no go and certainly not going to win any points with the wholesaler for the next deal. And \u201cthe next deal\u201d is really important, as we\u2019ll discuss later.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Indeed, there was one deal in which my&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/due-diligence-ultimate-guide\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">due diligence<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;on a property found a broken sewer line. I could have backed out, but the deal still made sense (barely), and I wanted to stay at the top of this wholesaler\u2019s list, so we closed. It\u2019s important to do what you can to maintain your relationships with good wholesalers.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This also means you should add a contingency to your repair estimate that accounts for the fact that your due diligence will usually be limited. Be ready for unexpected repairs. If that means you need to offer less than what the wholesaler lists the price at, do so. And yes, you can offer less than what a wholesaler is asking for. They usually have some room to negotiate.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Speed<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Of course, most wholesale deals suck, so you will have to see a lot of garbage leads in your email inbox. But that\u2019s just part of the job. So, I try to get on as many wholesaler lists as possible by reaching out to them on the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets forums<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;or at our Real Estate Investors Association meetings. They also reach out to you quite often. And then, I check those emails as they come in throughout the day and reach out immediately on any that seem interesting.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">With emailed leads, it\u2019s important to be fast. I don\u2019t recommend blind offers, but you should be ready to get up and go to the ones that look good as soon as possible. Sometimes they\u2019ll have open houses or group showings, in which case it will be hard to get a good deal. But oftentimes, if you\u2019re fast, you can get to the good deals before anyone else and, thereby, actually get a good deal.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">What\u2019s more important here than the deal, though, is that once you can get that first deal, you can build trust and move up that wholesaler\u2019s list of favorite buyers.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Getting to the Top of the List<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Getting to\u2014or near\u2014the top of a wholesaler\u2019s list can be very lucrative. Oftentimes, wholesalers want to get a deal done with someone they know will close, especially when they have a hard close date or an odd deal. They also want to keep their best buyers happy. If they send each one out to their whole list and do an open house, they\u2019re basically just a <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" target=\"_blank\" rel=\"noreferrer noopener\">real estate agent<\/a> trying to get the highest offer possible (which is the biggest criticism of wholesalers). In such cases, you can rarely get a good deal.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Wholesalers become a really good source of deals when you can get near the top of those lists. When wholesalers start calling you with potential deals that you alone have first dibs on as opposed to just having you as one of hundreds on a mass email campaign, that\u2019s when you get the best deals.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Conclusion<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><a class=\"editor-rtfLink\" href=\"https:\/\/www.youtube.com\/watch?v=6aoloijcR3Q\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">To be successful with wholesalers<\/span><\/a><span data-preserver-spaces=\"true\">, the key things are to get yourself in a position where you can close without a bank loan, preferably quite quickly, and be flexible enough to call on and visit interesting properties quickly. Build in a rehab contingency and stick to your word when under contract (unless you find something really bad, of course), and try to work your way up the best wholesaler\u2019s list to be one of their top buyers.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you can do this, wholesalers become less of a means of filling your inbox with spam and more of a means of finding a consistent stream of quality deals.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_64dd5ab97ed79\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-slate-200-background-color has-text-color has-slate-900-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-2\/3 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-large-font-size wp-block-paragraph\"><strong>Analyze Deals Like a Pro<\/strong><\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">Deal analysis is one of the first and most critical steps of real estate investing. Maximize your confidence in each deal with this first-ever ultimate guide to deal analysis. <em>Real Estate by the Numbers<\/em> makes real estate math easy, and makes real estate success inevitable. <\/p>\n\n\n\n<div id=button-custom-event-block_64138224164cd class='button-custom-event'>\n      <a href=\"https:\/\/store.biggerpockets.com\/products\/real-estate-by-the-numbers?utm_source=blog&#038;utm_medium=marketing_block\" x-on:click=\"window.analytics.track(&#039;Blog Block | Publishing: REBTN Book&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/buy-deals-from-wholesalers&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Get Yours Now<\/a>\n  <\/div>\n\n\n\n<div id=button-custom-event-block_641381f7164cc class='button-custom-event'>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/3 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/REBN_cover_mockup_01-e1679000020543.png\" alt=\"real estate by the numbers\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/buy-deals-from-wholesalers&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Wholesale real estate has&nbsp;a controversial reputation&nbsp;and has even faced legislative restrictions in various places such as&nbsp;Oklahoma&nbsp;and&nbsp;Philadelphia. Regardless of the legal and ethical considerations, however, wholesaling can be done in an [&hellip;]<\/p>\n","protected":false},"author":1689,"featured_media":145173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5526,7119],"tags":[],"class_list":["post-145171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-wholesaling","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/145171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1689"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=145171"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/145171\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/145173"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=145171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=145171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=145171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}