Do Wholesalers lie about actually being a Cash Buyer?

33 Replies

I have called a few respondents to a Craigslist ad that I posted a few days ago. Apparently, most of the respondents were "cash buyers", so they say, and not wholesalers. I took their  criteria information down but don't feel too confident. 

My question is, do you ever get the feeling that wholesalers could be posing and saying that they are cash buyers when they are not?


P.S. I introduce myself as a wholesaler.

My question is, do you ever get the feeling that wholesalers could be posing and saying that they are cash buyers when they are not?

Wholesalers who don't have the cash to close pose as cash buyers all the time, so yeah I would assume they're all posing until "POFen" otherwise.

Do wannabe investors lie? That would be a big yes. Usually, by the time they have spoken their third word they have lied at least once.

Haha, the old fake it til you make it scheme. Get proof of funds.

Always get proof of funds upfront first and foremost. There are countless numbers of "buyers" who will only tie up your property and never close.

Hi Keela,

Some wholesalers have a buyers list of investors. Their job is to find the good deals for their investors.  They contract it out to you for a fee.  Meaning, they don't actually buy the property themselves.  This is why you may have had mixed feelings.  The wholesaler wants to make sure that you are qualified to purchase the property before giving you any details.

Wholesalers have access to foreclosures and other properties before they get onto the MLS. Like anyone in this business, it's about building a relationship. Everyone is guarded until they feel they can trust you.

It seems like you have good instincts.  Use them to find a good wholesaler.  Maybe the ones you dealt with are just starting out, and they are not confident in the trade.

Hope that helps you.

Melissa

Ask for proof of funds someone who has the money in their bank account will not object to this . If you have a great deal ask for a high amount non-refundable deposit e.g $10,000 people with money and are willing to do deals will pay.

While I understand the sentiment here I also get the other side. Yes you will have people pose as cash buyers. You will also have people who are using OPM contact you as well. I have a portfolio lender, HML, and private investors I work with. I have never tied up a property and not closed. However I also explain where my money comes from and don't pretend to be a cash buyer.

Some do of course. My partner has developed a good reputation as a wholesaler here in town for one big reason - he buys with cash and closes in 10 days or less. :). That type of reputation brings a lot of good deals our way. 

Originally posted by @Keela C. :

I have called a few respondents to a Craigslist ad that I posted a few days ago. Apparently, most of the respondents were "cash buyers", so they say, and not wholesalers. I took their  criteria information down but don't feel too confident. 

My question is, do you ever get the feeling that wholesalers could be posing and saying that they are cash buyers when they are not?


P.S. I introduce myself as a wholesaler.

 @Keela, This is a great question!

At the risk of sounding too "metaphysical" about it, what is a "real cash buyer"?

My bet is that not a single one of the "real buyers" you are looking for have "real cash".  

Oh sure, some may have money in a 401k, or some sort of Roth... perhaps even a savings account.

However, it is generally accepted that any "real investor" who has cash is actually getting a loan themselves.

If you (not specifically you... but a reader) is getting a conventional loan, or a Hard Money Loan to purchase your investment property because you are a "real investor... using real money" then essentially  they are "BS'ing" about their money situation as well.

The Cold Hard Truth

The reality about financing is that almost everyone borrows the money to buy it. If you are a rehabbing investor who borrows money from FHA, or Conventional loans; I have to ask you one simple question.

If you are borrowing the money to make your transaction close... how are you ANY different than a wholesaler who uses transactional funding?  

The rules between the sources of funding is the only thing that really changes.

So unless your end use buyer literally has the cash (very rare) on their own account, ALL people, regardless of label... "Wholesaler","Rehabber", "Landlord" or "Retail Buyers" can safely be considered as "getting financing in some fashion."

Your job as a wholesaler is to QUALIFY the potential buyers.

"Oh?  You are a cash buyer?  Great!! Just to let you know, when you make an offer on our properties, If I've not done business with you before I require a proof of funds in the form of a bank statement with the account numbers blacked out, or some form of proof that is acceptable at the time of contract."

All these nonsensical arguments about "real buyers" vs. "Real Investors" and "Faking it until you make it" are nothing more than egotistical remnants of people who seldom remember what it was like when they started.

Treat everyone equally.  Treat them fair.  Don't make pre-judgements on someone just because they may be a "wholesaler".  

Trust me... many of the wholesalers that I coach make far more money than most Rehabbers I know because they not only wholesale as a career.... but they also rehab.

Have a Powerful Sales Day!

@Karl Krentzel , I buy with cash. It is my own money and I am happy to document it. When I write an offer on a property I would like to add to my portfolio it usually has NO contingencies. No inspection contingency, no financing contingency. If my offer is accepted I can close that afternoon (or as soon as the seller is able.) For this certainty, I demand a discount to market value and I, almost always, receive it. It is fine to use financing, or to wholesale but if I am offering on the same property--I will usually be the buyer. 

Originally posted by @Jeff Rabinowitz :

@Karl Krentzel, I buy with cash. It is my own money and I am happy to document it. When I write an offer on a property I would like to add to my portfolio it usually has NO contingencies. No inspection contingency, no financing contingency. If my offer is accepted I can close that afternoon (or as soon as the seller is able.) For this certainty, I demand a discount to market value and I, almost always, receive it. It is fine to use financing, or to wholesale but if I am offering on the same property--I will usually be the buyer. 

 I love that!  You are one of the blessed few who do!  One of the most powerful and effective ways to get someone to accept the offer is exactly the way you described! 

Have a powerful selling day! 

Originally posted by @Karl Krentzel :
Originally posted by @Keela Chambers:

I have called a few respondents to a Craigslist ad that I posted a few days ago. Apparently, most of the respondents were "cash buyers", so they say, and not wholesalers. I took their  criteria information down but don't feel too confident. 

My question is, do you ever get the feeling that wholesalers could be posing and saying that they are cash buyers when they are not?


P.S. I introduce myself as a wholesaler.

 @Keela, This is a great question!

At the risk of sounding too "metaphysical" about it, what is a "real cash buyer"?

My bet is that not a single one of the "real buyers" you are looking for have "real cash".  

Oh sure, some may have money in a 401k, or some sort of Roth... perhaps even a savings account.

However, it is generally accepted that any "real investor" who has cash is actually getting a loan themselves.

If you (not specifically you... but a reader) is getting a conventional loan, or a Hard Money Loan to purchase your investment property because you are a "real investor... using real money" then essentially  they are "BS'ing" about their money situation as well.

The Cold Hard Truth

The reality about financing is that almost everyone borrows the money to buy it. If you are a rehabbing investor who borrows money from FHA, or Conventional loans; I have to ask you one simple question.

If you are borrowing the money to make your transaction close... how are you ANY different than a wholesaler who uses transactional funding?  

The rules between the sources of funding is the only thing that really changes.

So unless your end use buyer literally has the cash (very rare) on their own account, ALL people, regardless of label... "Wholesaler","Rehabber", "Landlord" or "Retail Buyers" can safely be considered as "getting financing in some fashion."

Your job as a wholesaler is to QUALIFY the potential buyers.

"Oh?  You are a cash buyer?  Great!! Just to let you know, when you make an offer on our properties, If I've not done business with you before I require a proof of funds in the form of a bank statement with the account numbers blacked out, or some form of proof that is acceptable at the time of contract."

All these nonsensical arguments about "real buyers" vs. "Real Investors" and "Faking it until you make it" are nothing more than egotistical remnants of people who seldom remember what it was like when they started.

Treat everyone equally.  Treat them fair.  Don't make pre-judgements on someone just because they may be a "wholesaler".  

Trust me... many of the wholesalers that I coach make far more money than most Rehabbers I know because they not only wholesale as a career.... but they also rehab.

Have a Powerful Sales Day!

 Wow, what a powerful load of nonsense.  The equivalent of Slick Willie's "It depends on what the meaning of is, is."

I buy for cash.  Actual cash that I have in my account at the time I make the offer.  And there is a profound difference between that and a wholesaler who will use transactional funding if and only if they find an end buyer.

The difference is that when I make a cash offer, the seller knows I will close.  That is what it means to have a cash offer; that no one else's approval is required, that there will be no third-party whose failure to perform screws up the sale.

That is what sellers hear when they hear, "cash offer."  And wholesalers know it, and take advantage of it when they LIE (and yes, that is the right word) about being cash buyers.

I find it incredibly ironic that you speak of qualifying end buyers, and object to people qualifying wholesalers.

Originally posted by @Karl Krentzel :
Originally posted by @Keela Chambers:

I have called a few respondents to a Craigslist ad that I posted a few days ago. Apparently, most of the respondents were "cash buyers", so they say, and not wholesalers. I took their  criteria information down but don't feel too confident. 

My question is, do you ever get the feeling that wholesalers could be posing and saying that they are cash buyers when they are not?


P.S. I introduce myself as a wholesaler.

 @Keela, This is a great question!

At the risk of sounding too "metaphysical" about it, what is a "real cash buyer"?

My bet is that not a single one of the "real buyers" you are looking for have "real cash".  

Oh sure, some may have money in a 401k, or some sort of Roth... perhaps even a savings account.

However, it is generally accepted that any "real investor" who has cash is actually getting a loan themselves.

If you (not specifically you... but a reader) is getting a conventional loan, or a Hard Money Loan to purchase your investment property because you are a "real investor... using real money" then essentially  they are "BS'ing" about their money situation as well.

The Cold Hard Truth

The reality about financing is that almost everyone borrows the money to buy it. If you are a rehabbing investor who borrows money from FHA, or Conventional loans; I have to ask you one simple question.

If you are borrowing the money to make your transaction close... how are you ANY different than a wholesaler who uses transactional funding?  

The rules between the sources of funding is the only thing that really changes.

So unless your end use buyer literally has the cash (very rare) on their own account, ALL people, regardless of label... "Wholesaler","Rehabber", "Landlord" or "Retail Buyers" can safely be considered as "getting financing in some fashion."

Your job as a wholesaler is to QUALIFY the potential buyers.

"Oh?  You are a cash buyer?  Great!! Just to let you know, when you make an offer on our properties, If I've not done business with you before I require a proof of funds in the form of a bank statement with the account numbers blacked out, or some form of proof that is acceptable at the time of contract."

All these nonsensical arguments about "real buyers" vs. "Real Investors" and "Faking it until you make it" are nothing more than egotistical remnants of people who seldom remember what it was like when they started.

Treat everyone equally.  Treat them fair.  Don't make pre-judgements on someone just because they may be a "wholesaler".  

Trust me... many of the wholesalers that I coach make far more money than most Rehabbers I know because they not only wholesale as a career.... but they also rehab.

Have a Powerful Sales Day!

Oh wow, that is an eye opener! The mere fact that you "coach" wholesalers make your post "wholesaler" sided. Yes, you do coach them as you claim, you have a system that works as you claim, you make money on potential wholesalers, that's for sure, perhaps even more money than your wholesale business. Many of those self proclaimed gurus out there claim that they have this and that, but what they are actually doing letting people pay for their leads in a way of "coaching", for sure they will not give you their network list (contractors, buyers, lenders, etc), they sell a system, and what they tell you in reality is basically do all the grunt work, bring them the lead and they will close it for you, then you get 10% of the profit, and oh, by the way, you before we do it, you need to go thru our system and pay us $$$$$.

We are talking about a wholesaler who poses as cash buyer, the fact that they are not up front with you on the first contact, is simply not acceptable. Why not ask the person that you are in the same business and draft a partnership with them if you have something they could not sell? 50% of 5,000 is better than 100% of 0.

Let us reverse the situation, I pose to you that I have 2 Million cold hard cash sitting in the trunk of my car and I want to buy an apartment complex, would you believe me?

I fully remember when I was starting, I never lied, I never cheated, I was up front, I performed, I get more clients, I did hard work. But most of all, I learned not to trust people who can't tell the truth.

This post has been removed.

Originally posted by @Richard C. :

 Wow, what a powerful load of nonsense.  The equivalent of Slick Willie's "It depends on what the meaning of is, is."

I buy for cash.  Actual cash that I have in my account at the time I make the offer.  And there is a profound difference between that and a wholesaler who will use transactional funding if and only if they find an end buyer.

The difference is that when I make a cash offer, the seller knows I will close.  That is what it means to have a cash offer; that no one else's approval is required, that there will be no third-party whose failure to perform screws up the sale.

That is what sellers hear when they hear, "cash offer."  And wholesalers know it, and take advantage of it when they LIE (and yes, that is the right word) about being cash buyers.

I find it incredibly ironic that you speak of qualifying end buyers, and object to people qualifying wholesalers.

 

What I find ironic is that you ACTUALLY think you use REAL money to buy a house.  

Guess what... it's only digits transferred from one account to another..  Get real.  

As to "third party whose failure to perform" arguments... I suppose you never have an inspection contingency..

This is more worthless rabble from those who attempt to demean wholesalers and their true position in the market.

People who hold this opinion of "slick willie" etc. clearly have no comprehension, and are not willing to even entertain the value of wholesalers in the market.  You simply want to try to demean them.

Wholesalers are the beginning, and the end of the process.  Without having great wholesaling skills, you will rarely find a good deal.  As wholesalers need rehabbers and landlords to buy their products, it is equally important that rehabbers understand that wholesalers are most powerful when they are treated as what they really are.

BUYERS.

Never in 18 years of being an Agent/Investor have I ever seen a purchase contract that was between Wholesaler and Seller.  It always says...

BUYER: 

SELLER:

Therefore any attempt by rehabbers or others to diminish the wholesalers role and their "cash buyer" status is nonsense.

Unless you have the cash in your account (rare)... you are getting a loan.

Wholesalers (along with rehabbers and ANYONE in sales) must learn to prequalify.

It is only in real estate where the use of Sales Skills is mocked and routinely ignored.

Have a Powerful Sales Day! 

The answer to the first question is yes they lie and one reason is they think they will get closer to your real price by posing as a cash buyer, or you will be more willing to talk to them. I always used to ask are you the cash buyer or is someone else bringing the money to the table? They got a real surprise once will I got up from the closing table and said the deal is off, you lied to me. They didn't think anything would make me walk that close to closing. Something wrong with telling the truth now days.

I see Karl Krentzel posted. Are you the Tucson real estate agent? 

Could I ask what the purpose of the question is?  Seeing as you're a wholesaler, I'm going to make a guess that you're struggling with whether or not you should say you're a cash buyer.  But you don't have to say you're a cash buyer to be in the same class; you write "cash offers."  In this industry, a cash offer colloquially means without a financing addendum, which is generally how a wholesale offer is written.  Whether you sell to a hard money buyer or a literal cash buyer, a financing addendum is not needed, ergo it's a "cash offer."

Originally posted by @Karl Krentzel :
Originally posted by @Manolo D.:

Oh wow, that is an eye opener! The mere fact that you "coach" wholesalers make your post "wholesaler" sided.... Yes, you do coach them as you claim, you have a system that works as you claim, you make money on potential wholesalers, that's for sure, perhaps even more money than your wholesale business.....

Thank you for your spirited.. if not misinformed response.  

The truth is I have been coaching Realtors® and Investors in the Art of Sales Skills as it relates to wholesaling and residential real estate for free since before you even picked up your first pen to write your first "honest contract."

I would direct you to the over 80 videos I have put out for free on SellMoreHomesNow on YouTube.  You will see ZERO Sales pitches.  Nothing but content.

I would further direct you to the over 400 episodes of The Red Pill Investor Podcast where I carefully explain how to use sales skills to ethically and honestly help homeowners and home investors buy homes.

I would certainly want to point out the over 112k downloads of people who have listened to my podcast, or the 58k views on my channel.

I would of course point out that the Council of Residential Specialists (a highly respected Realtor® organization) has repeatedly hired me to speak on various subjects.

Of course, all of the coaching, buying, and selling that I have done over the past 18 years means absolutely NOTHING in this equation... Why?

Because you... think that I have a "Dog in this fight".

My friend... If not one soul EVER paid me another penny to train them... My videos, and podcasts, (which I did for free) would still be there.

What have YOU contributed to this industry other than bile and nonsensical arguments based upon my professional choice to take my skill set and train others whom you have no compulsion to help.

If you don't like "gurus" or mentors teaching people via the "Internets" then may I respectfully suggest that you either teach others what you know... 

Or please let others who don't mind helping try.

Have a pleasant day.

 I started counting how many pitches there re in this post, I ran out of fingers so that's it. If you help others and don't make a absolute penny on helping (put things together, give them your network contacts, tell them what needs to be done) from start to finish, I salite you, if you did, good luck to them. Thank you for offering your free stuff, but no thanks.

If you haven't got a buyer for your deal (I assume you don't, posting on craigslist) maybe you should look at these other wholesalers as as potential partners and see if they would co-wholesale the deal with you. They just might just have a buyer ready to pull the trigger. I know a few wholesalers that would rather have a piece of the pie rather than nothing at all.

I am networking for cash buyers and sellers at the same time. I have no problem working with wholesalers, if need be, but how can I do that when they are dishonest about who they really are? I think my question has gotten a little mixed up. I do not pose as a cash buyer to other wholesalers. When they ask am I a wholesaler or cash buyer i inform them that I am a wholesaler. I do not mind JVing with wholesalers but how can I do that when they're claiming that THEY will be the ones bringing cash to the table.

@Keela C.  

I've heard of a marketing tactic for deals to pose as a cash buyer. Sometimes property owners look on craigslist for cash buyers because they want to close quick and only want cash. It's another method of building up a sellers list. The word lie can be used in a negative manner with this example. If that was the case, 98% of wholesalers would be considered a lie. We never intend on buying houses with cash, even though we market with that pitch. We know that we will be assigning the property to a true cash buyer.

Its not a lie, its a marketing method. Just that simple.

There's an old saying in real estate:

"All sellers are liars and all buyers are thieves."

I'm not implying that you are lying. However, when you, as a whokesaler act as an intermediary who merely controls a property via contract rather than as record title holder, don't be surprised when other attempt to out maneuver you at your own game.

The solution is to formalize your sales funnel and vetting process so as to minimize your time with unqualified, non-principal buyer prospects. 

You'd do well to have a written flow chart that details your Dealflow and the actions that need to occur at each step. It doesnt have to be fancy; you're the only one that will see it.

Knowing how people found you and from which door they entered will help a lot.

If people come through your Craigslist funnel, be prepared to require them to show proof of funds in the same name as the entity they make offer as. If not, they ain't real. 

Originally posted by @Chaz Reid :

@Keela C.  

I've heard of a marketing tactic for deals to pose as a cash buyer. Sometimes property owners look on craigslist for cash buyers because they want to close quick and only want cash. It's another method of building up a sellers list. The word lie can be used in a negative manner with this example. If that was the case, 98% of wholesalers would be considered a lie. We never intend on buying houses with cash, even though we market with that pitch. We know that we will be assigning the property to a true cash buyer.

Its not a lie, its a marketing method. Just that simple.

 No, it's a lie.

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