What is the one thing a wholesaler should know before starting?

Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes

I've been sitting on the sidelines way too long and need to take some massive action. I've decided that wholesaling is the path i am going to pursue and want to pick everyones brain about what they wish they knew or would do if they started all over again!

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

@Steve Vaughan I think the reason they do is for some reason they believe what they hear that the way to buy rental real estate when you have no money.. is to wholesale first get some money then buy rentals.

when in fact wholesaling or buying and selling deals quickly in any volume takes a lot of skill.. significant marketing capital.. and most of the time they are breaking the real estate laws.

And you have all sorts of HOW TO trainers selling their boot camps and of course they lead with you too can get rich with NON of your own money..

theoreticaly that's true.. but not really reality in the real world..

not to mention some areas simply do not have enough distressed real estate to make it viable at all.

other areas like urban cores and cities that have seen hard times much easier to at least snag low value assets no one wants.. much of this is done is rough areas.

Granted there are always hoarder houses and other fixer types in the nicer areas but its uber competitive for them.. and generally there is not enough profit in them to feed all the mouths.

the wholesaler the buyer the buyer having to use hard money the contractor sales cost etc.. that in my mind is why you see so many post about HEY wholesalers don't know what they are doing.. In most cases they just are hoping they know what they are doing.. but they just spent 5k on mailers and they are going to throw deal out there and pray someone is not swift enough jumps on it.

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Justin Marshall
Real Estate Agent · Ankeny IA · Member since 2015 · 89 posts · 34 votes
8y
I'm not a whole saler myself but I deal with a couple of them and the biggest issue I always run into is they either don't know the neighborhood, arv, or the cost of estimating rehabs. To many focus on building a buyers list when in all honesty that should be one of the final steps of a whole saler. If you have a deal the money will follow. Also don't build a huge list of buyers as most the time you will have repeat customers. Listen to what your buyers criteria is as well.
4 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Justin Marshall I fell for the hey let me put you on my buyers list.. then I get a e mail
and its highest and best and decide in 30 seconds.. I told him to take me off.
he was kind of shocked.. I said I don't want to have deals come to me that have gone to 50 other people if I want that I can just get on MLS..
or the auction sites.. if you want to send me a deal and only me.. then OK.. well that pretty much ended that. :)
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Originally posted by @Eric Trostle:
I've been sitting on the sidelines way too long and need to take some massive action. I've decided that wholesaling is the path i am going to pursue and want to pick everyones brain about what they wish they knew or would do if they started all over again!
As an agent, you are already doing it pretty much. All it is is a job where you are compensated for bringing a buyer and seller together...
To do it properly took me about 10 years of being in the trenches of buying, selling, landlording, and doing a few bad flips. And that's just to wholesale/tale a few on the side with properties I don't want.
Wholesaling done right is the whole enchilada and requires the most comprehensive knowledge of all strategies. Why people think they can start out with it is a joke to me.
6 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Steve Vaughan I think the reason they do is for some reason they believe what they hear that the way to buy rental real estate when you have no money.. is to wholesale first get some money then buy rentals.
when in fact wholesaling or buying and selling deals quickly in any volume takes a lot of skill.. significant marketing capital.. and most of the time they are breaking the real estate laws.
And you have all sorts of HOW TO trainers selling their boot camps and of course they lead with you too can get rich with NON of your own money..
theoreticaly that's true.. but not really reality in the real world..
not to mention some areas simply do not have enough distressed real estate to make it viable at all.
other areas like urban cores and cities that have seen hard times much easier to at least snag low value assets no one wants.. much of this is done is rough areas.
Granted there are always hoarder houses and other fixer types in the nicer areas but its uber competitive for them.. and generally there is not enough profit in them to feed all the mouths.
the wholesaler the buyer the buyer having to use hard money the contractor sales cost etc.. that in my mind is why you see so many post about HEY wholesalers don't know what they are doing.. In most cases they just are hoping they know what they are doing.. but they just spent 5k on mailers and they are going to throw deal out there and pray someone is not swift enough jumps on it.
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7 Reply
David Rubio
Investor · Miami, FL · Member since 2015 · 27 posts · 14 votes
8y
You can also do the following:
1. Find distressed properties as a buyer's agent for a rehabber/developer
2. List those properties after the rehabber/developer completes the job.
That's what I plan on doing because I love working with investors and I also want to learn how to rehab myself.
2 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Originally posted by @Jay Hinrichs:

@Steve Vaughan I think the reason they do is for some reason they believe what they hear that the way to buy rental real estate when you have no money.. is to wholesale first get some money then buy rentals.
when in fact wholesaling or buying and selling deals quickly in any volume takes a lot of skill.. significant marketing capital.. and most of the time they are breaking the real estate laws.
And you have all sorts of HOW TO trainers selling their boot camps and of course they lead with you too can get rich with NON of your own money..
theoreticaly that's true.. but not really reality in the real world..
not to mention some areas simply do not have enough distressed real estate to make it viable at all.
other areas like urban cores and cities that have seen hard times much easier to at least snag low value assets no one wants.. much of this is done is rough areas.
Granted there are always hoarder houses and other fixer types in the nicer areas but its uber competitive for them.. and generally there is not enough profit in them to feed all the mouths.
the wholesaler the buyer the buyer having to use hard money the contractor sales cost etc.. that in my mind is why you see so many post about HEY wholesalers don't know what they are doing.. In most cases they just are hoping they know what they are doing.. but they just spent 5k on mailers and they are going to throw deal out there and pray someone is not swift enough jumps on it.
Agreed. Lack of capital and gurus with a program pushing wholesaling giving the idea it's easy.
Easier to get the money to just buy than the years of education and experience to know how to wholesale properly.
I always wonder why they don't hold. They do all that work. Get such a great deal. Sell it off for a onetime payday at a high tax rate only to have to do it again to eat again. Waste of time and talent IMO.
3 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
8y
@Eric Trostle Why be a wholesaler , when you are already an agent . If I were an agent I would agressively market to the same sellers the wholesalers are . BUT I would explain the difference between a wholesaler and an agent . I would also have a list of buyers .
Tell the seller the truth , show them how they will see more in their pocket going with you . Have a sample wholesaler contract , then show them yours . If they need to sell fast tell them to price it right and their may be a bidding war .
If 1 or 2 licensed agents in a area marketed to the distressed property market they would make a killing .
When your buyers are investors , you arent dealing with emotions , just numbers . And most other agents dont want to deal with the cheap rough properties . But base hits all day long add up to a lot more than a home run here and there .
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Matthew Paul OREO agents we deal with are so MUCH better than a wholesaler you buying form the bank title is OK.. they give you a shot at the deal.. and they KNOW basically what a deal is .
Good OREO or investor agents most defiantly create a niche for themselves..
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0 Reply
Eric Trostle
OP
Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes
8y
Originally posted by @Steve Vaughan: I don't think that wholesaling seems easy but as you mentioned it seems like more of a natural progression to move towards as an agent since im already doing similar things as a wholesaler as a realtor

In fact after hearing from you and others here it seems like i shouldn't really change much other than perhaps who im marketing to!

Originally posted by @Eric Trostle:

I've been sitting on the sidelines way too long and need to take some massive action. I've decided that wholesaling is the path i am going to pursue and want to pick everyones brain about what they wish they knew or would do if they started all over again!
As an agent, you are already doing it pretty much. All it is is a job where you are compensated for bringing a buyer and seller together...
To do it properly took me about 10 years of being in the trenches of buying, selling, landlording, and doing a few bad flips. And that's just to wholesale/tale a few on the side with properties I don't want.
Wholesaling done right is the whole enchilada and requires the most comprehensive knowledge of all strategies. Why people think they can start out with it is a joke to me.
0 Reply
Eric Trostle
OP
Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes
8y
Originally posted by @Jay Hinrichs: Thanks for all the insight. I can see how that wouldn't work since similar strategies of "highest and best" scenarios puts off many of the clients i represent and can see how treating a cash buyer as a number would yield similar results.

@Justin Marshall I fell for the hey let me put you on my buyers list.. then I get a e mail
and its highest and best and decide in 30 seconds.. I told him to take me off.
he was kind of shocked.. I said I don't want to have deals come to me that have gone to 50 other people if I want that I can just get on MLS..
or the auction sites.. if you want to send me a deal and only me.. then OK.. well that pretty much ended that. :)
0 Reply
Eric Trostle
OP
Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes
8y
0 Reply
Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
8y
Learn your market and learn to market. The sooner you do this, the sooner you will find and acquire deals.
3 Reply
Eric Trostle
OP
Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes
8y
Sounds so simple, I think I get in the way of progress by over analyzing everything. #ProgressNotPerfection
3 Reply
Sean Cole
Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes
8y
Originally posted by @Jay Hinrichs:

@Matthew Paul OREO agents we deal with are so MUCH better than a wholesaler you buying form the bank title is OK.. they give you a shot at the deal.. and they KNOW basically what a deal is .
Good OREO or investor agents most defiantly create a niche for themselves..
We must not have any good OREO agents here where I am, then! Just pushing paper in my neck of the woods.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Sean Cole its regional for sure.. the ones I had in MS and AL feed us the deals..
but lots of deals there ...
its funny as we talk about this.. some parts of the country there are still plenty of deals others its very tight the deal ship has sailed and its basically pre 07 market..
one size does not fit all.
in Oregon we have little to no OREO inventory anymore all those agents that specialized in it are out of business and back to doing regular real estate.. the foreclosures at court house that were 20 to 50 a week are down to 3 or 4.. with MASSIVE competition..
it all cycles that's for sure..
but I bet you can still roll into certain big cities and buy hang over inventory..
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2 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Don't tell people you are a cash buyer unless you actually have the cash. Assigning a contract to someone with cash, isn't the same as being a cash buyer. Be honest with your sellers, so they understand you will reassign the contract to someone else and you are taking an assignment fee.
4 Reply
Stephen Sheppard
Seattle, WA · Member since 2018 · 8 posts · 6 votes
8y
Make sure your assignment contracts are in place.
2 Reply
Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
8y
The first thing a wholesaler should know... the laws of what is legal and what isn't.
1 Reply
Rachel H.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
8y
@Eric Trostle Find your buyers first. Real estate investors who can close and have a track record. They'll tell you their criteria and what neighborhoods to look in. Hope that helps. Good luck!
1 Reply
Eric Trostle
OP
Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes
8y
I don't think I know how to tag you all in one post but thank you Joe, Stephen, Brian, and Rachel for posting and the insights. It seems like a slight shift in mindset is needed from my normal Realtor role but not much :D
0 Reply
Jerryll Noorden
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
8y
aahhh a wholesaler. 1st thing to know. BP has a passion for hating wholesalers. I love it!
2nd.. due to wholesaling did I get that push to now do flips, happy to say I am now about to do 2 flips at the same time. Thank you thank you
3rd. I friggin HATE HATE HATE HATE HATE HATE wholesaling HAAAATE!!!!
4th Do it right, and you make money quite quickly.
5th, I can not STAND wholefriggen gatverdame pampa ka boeler wholesaling!
6th, Be honest, to your sellers, buyers, agents, your dog, kids, especially your neighbor!
7th, Get a WEBSITE, NOW!
I accept thanks, in form of amazon gifts!
1 Reply
Eric Trostle
OP
Real Estate Consultant · Ogden, UT · Member since 2015 · 51 posts · 26 votes
8y
Originally posted by @Jerryll Noorden:

aahhh a wholesaler. 1st thing to know. BP has a passion for hating wholesalers. I love it!
2nd.. due to wholesaling did I get that push to now do flips, happy to say I am now about to do 2 flips at the same time. Thank you thank you
3rd. I friggin HATE HATE HATE HATE HATE HATE wholesaling HAAAATE!!!!
4th Do it right, and you make money quite quickly.
5th, I can not STAND wholefriggen gatverdame pampa ka boeler wholesaling!
6th, Be honest, to your sellers, buyers, agents, your dog, kids, especially your neighbor!
7th, Get a WEBSITE, NOW!
I accept thanks, in form of amazon gifts!
Congrats on your two flips!
0 Reply
Jerryll Noorden
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
8y
Originally posted by @Eric Trostle:

Originally posted by @Jerryll Noorden:
aahhh a wholesaler. 1st thing to know. BP has a passion for hating wholesalers. I love it!
2nd.. due to wholesaling did I get that push to now do flips, happy to say I am now about to do 2 flips at the same time. Thank you thank you
3rd. I friggin HATE HATE HATE HATE HATE HATE wholesaling HAAAATE!!!!
4th Do it right, and you make money quite quickly.
5th, I can not STAND wholefriggen gatverdame pampa ka boeler wholesaling!
6th, Be honest, to your sellers, buyers, agents, your dog, kids, especially your neighbor!
7th, Get a WEBSITE, NOW!
I accept thanks, in form of amazon gifts!
Congrats on your two flips!
heeeey now..
let me first finish and sell them ball busters before you congratulate me!
But danke Jeune!! ^_^
1 Reply
Jerryll Noorden
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
8y
Originally posted by @Eric Trostle:

Originally posted by @Jerryll Noorden:
aahhh a wholesaler. 1st thing to know. BP has a passion for hating wholesalers. I love it!
2nd.. due to wholesaling did I get that push to now do flips, happy to say I am now about to do 2 flips at the same time. Thank you thank you
3rd. I friggin HATE HATE HATE HATE HATE HATE wholesaling HAAAATE!!!!
4th Do it right, and you make money quite quickly.
5th, I can not STAND wholefriggen gatverdame pampa ka boeler wholesaling!
6th, Be honest, to your sellers, buyers, agents, your dog, kids, especially your neighbor!
7th, Get a WEBSITE, NOW!
I accept thanks, in form of amazon gifts!
Congrats on your two flips!
DUDE!!!! You learned how to tag!!
You are D man!!
1 Reply

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