Buying from a Wholesaler, is it me?

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Buying from a Wholesaler, is it me?

Greg Grant
Hollywood, FL · Member since 2016 · 57 posts · 20 votes

So I have tried out a couple dozen wholesalers in my area (South Florida) and I can't find a single one that I trust.

A perfect example of this is one guy that posted a property for $160k, said it needed $30k of rehab and its ARV was $185k....seriously?

I'll go through my emails and get some nice looking properties (price, arv, estimated rehab) and I email them and they say its gone, or its being bid up higher than the starting asking price.  I'm extremely suspicious because of all the shady stuff I've already come across with a lot of wholesalers.

I know a lot of wholesalers are inexperienced people looking to make a quick buck, but I am focused on making sure my $$'s are invested wisely.  I'm not going to throw my money at a property on the word of some stranger and then get stuck with a crappy property.

It seems like if I don't just throw my money at it extremely fast, "it's gone".

How is it possible that an email list is sent out in the morning and less than 12 hours later the properties are gone?  Don't people want to do a little due diligence first?  I want to be able to check things and make sure I'm not buying a property that has 3 mortgages being attached to it and I'm 200k upside down in it.

Do properties really go that fast or is that some kind of high pressure sales technique to separate me from my money?

Do I put an offer on something to tie it up and then let my title insurance company check things before the closing?  Do I have contingencies to get out of it if its a bad deal?

My concern is putting up earnest money deposits too.  I don't mind doing it through my real estate agent, but can I even involve my real estate agent in the wholesaler transaction.  There's no way I would put up a "non-refundable" earnest money deposit.  And some wholesalers have said I need to do that to prove I am serious.  No way that's happening.  For all I know I put up $2,000 find out it has $250k in liens, mortgages, etc. on it and I lose my $2,000.

Am I just being too paranoid or am I missing some steps to this process?

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Rashard Alomari
Investor · Memphis, TN · Member since 2016 · 215 posts · 128 votes
8y
Wow. There is so much I would like to say regarding this topic, but I’ll abbreviate. Yes, it is very realistic that a property is sent out to an email list and is gone within hours. Especially if it is a good deal. You need to react quickly and effectively. You don’t need to put an offer on a contract without doing your due diligence, but you do need to respond promptly and look into the purchase and either pull the trigger or accept the fact that a true deal will be gone rather quickly. Regarding earnest money, you should ONLY put a deposit down if you are certain you want to buy the property and that deposit should be entirely non-refundable with the exception of title defect(liens/encumbrances/etc). That will eliminate any worry you have with being upside down(unless purchased at the wrong price point). If anyone tells you your deposit isn’t refundable even with title defect you need to tell them to fly off somewhere. Regarding trusting a wholesaler, or any investor for that matter, you don’t have to! It’s not your job to trust anyone; it is in fact your job to trust yourself and determine if this is a deal or not. Point blank. Perform your own research. View he property. Run your market analysis and analyze true comps. Then move forward or back away. It’s simple :)
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  • Brent Coombs
    Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    8y
    Originally posted by @Greg Grant:

    @Brent Coombs

    Originally posted by Brent Coombs:

    Originally posted by @Greg Grant:

    @Brent Coombs what you said its partially true, but keep in mind - a contract isn't a contract until both parties sign it. Anything can be added or crossed out before its signed.

    The problem is mainly with the arrogance of the wholesaler, not the piece of paper itself.

    Nope. As Judge Judy is fond of saying: "if it's not written down on the contract, it never happened"! Why should "arrogance" have to do with whether it's a deal or not?

    @Brent Coombs

    @Brent Coombs   ?? - Maybe you should re-read what I wrote.   Because that's exactly what I said.  A contract is not a contract until both parties sign it.  Meaning, you can add or remove whatever conditions/terms you want before both people sign it, then once both people sign it - that means both people agree to it.  And in your case, it would make Judge Judy happy.  Changing a contract is very common, it helps make both parties feel they are getting the fairest deal.

    What I meant in regards to "the arrogance of the wholesaler" is that it seems many of them feel that they can ask for whatever they want in regards to terms and investors "have to" agree to it.  

    What I was getting at is: Nothing you wrote after my earlier post looks to support the idea of my response being (only) "partially true"! You as the BUYER can be as "arrogant" as you want!

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  • Kenneth Fetzer
    Flipper · Carlsbad, CA · Member since 2016 · 28 posts · 5 votes
    8y

    Very good Rashard. You are totally correct.

    Great Job

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  • Jarrod Roecker
    Investor · Azle, TX · Member since 2014 · 36 posts · 16 votes
    8y

    Good job!

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