Petition for BP to Discontinue Wholesaling Discussions...
Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votesPetition for BP to Discontinue Wholesaling Discussions...
Most Popular Reply
Residential Real Estate Agent · Orlando, FL · Member since 2015 · 139 posts · 106 votes
11yI'm not sure why I'm even responding to this insulting post but since you've hit a nerve, I'm going to try. Wholesales and wholesalers are an intricate part for many investors. Considering we move 30-50 properties a month to our investors may show that wholesalers play an important role for many investors. We work to provide quality investments and take over all the hard work and time it takes to acquire properties for our investors that don't have the time, desire or knowledge to accomplish. Sure, there are bad seeds out there in the wholesale world, but there are bad seeds in every aspect of business. I find BP to be an incredible resource for me as an investor and a wholesaler. For you to want to begin a petition to rid posts and forums about a particular side of investing seems selfish and a little "one sided". I can only assume you've had a bad experience, but to burn the industry as a whole really doesn't provide much credibility on your part.
311 Replies
- Real Estate Broker · Laval, Québec · Member since 2014 · 183 posts · 59 votes11y
Originally posted by @James DeRoest:
Disclaimer: I am not a lawyer and this is only my personal opinion.
When there is no market for something than there will be no people who will enter into that market. An experienced wholesaler is essentially a free agent who, rather than working for one company performing the due diligence and negotiating will do it on their own, and then assign the negotiated deal to the highest bidder.
The problem is that nobody can legally just be a wholesaler, in order to legally make an offer to purchase a property you need to have the means to execute that offer and the intention to fulfill your offer to purchase. If you are entering into the promise to purchase and you do not have the means nor the intention of purchasing the property if you cannot find an end buyer than you are lying.
If you have the means to execute the offer to purchase (if need be) and you decide to assign your offer to purchase than there should be no real legal blockage for you to sell your contract to somebody who feels that said contract has monetary value. The contract is yours after all.
The problem is that in order to consistently get good deals that you can wholesale you need to have very advanced skills in real estate appraisal, networking, repair estimates and negotiating that most real estate agents don't have.
As far as a petition for BP to censor discussions about wholesaling I vote a wholehearted no.
- Specialist · Youngstown, OH · Member since 2014 · 51 posts · 12 votes11y
W O W, if your goal was to get virtually pummeled, congratulations!
- Wholesaler · Waldorf, MD · Member since 2015 · 459 posts · 245 votes11y
Just piling on without reading all of the post,...but I guess we should also get rid of discussing Lease options ?? After all you don't "really" own the property!
Or maybe we should only have the forum if you close on a wholesale deal with a double close! At least with a double close you own it, ....for a few seconds to hours at least. --said with sarcasm intended.
Last time I checked, Realtors and wholesalers have different objectives. Listing agents want those most for their clients (thus themselves) & buyer's agents want the least for their client (seller's paying their fee anyway). Wholesalers are looking to find deals that some Realtors wont' take (or give their client the time of day to market), in order to "sell" to an end Cash buyer. How much the wholesaler makes is dependent on how good of a deal they get & how good an end buyer can negotiate the price down. Not all wholesalers go around "shaking down little old ladies", BUT sometimes those are the clients that Realtors won't take.
I have buyers that don't want to do some of their own marketing. I have buyers that call me monthly to ask what do I have. For them, they get first dibs in my book, before I email it out to the rest of my list.
- Rental Property Investor · Shawnee Mission, KS · Member since 2014 · 205 posts · 136 votes11y
I like having wholesalers in the market. I don't have the time to find all the off MLS deals and wholesalers provide a useful service to buyers and sellers. Buyer beware, protect yourself.
- Cleveland, OH · Member since 2015 · 42 posts · 13 votes11y
Yikes. As a wholesaler I have found this website to be extremely useful in learning how to evaluate deals, making connections, and gaining information for further investing. I think that when done correctly, wholesaling can be an integral and necessary service for all investors. These discussions have helped keep me informed so that I can improve as a wholesaler. Try to see the bigger picture. One bad wholesaler doesn't diminish the necessity and usefulness of our service.
- Specialist · Sarasota, FL · Member since 2014 · 16 posts · 13 votes11y
I think I can add to this discussion in a way that is not inflammatory to either side of this "debate".
1) There are many flippers out there that love the aspect of flipping where they are transforming a wreck of a house into a nice home for someone and they love getting paid to do so. For many it is almost an art form. Many of these folks are happier doing that part of it and have no interest in the extensive marketing that is required to find deals, especially in a hot market where deals are scarce on the mls.
2) Many buy and hold investors are in the same boat. These folks want to put their money to work to generate a passive income. They have no interest in doing huge direct mail campaigns, building seller websites, and especially dealing with all the responding callers and going through the process to weed out the deals.
So, if deals are hard to come buy on the mls, and investors want deals, but they want to focus on the parts of their business they enjoy, or are best at, who is going to help them?
That would be the wholesaler... an integral part of the REI ecosystem.
Lastly, as far as getting upset about a wholesalers markup... emotion should play no part in business. Real Estate Investing is about numbers (among other things). As a flipper, rehabber, buy and hold, etc, all that matters is that the numbers make sense. If a wholesaler somehow manages to get a house worth $200k for $50k and then offers it to you for $100k, are you losing somehow? I know this is a silly example, but it makes a point. Either the deal is a winner for you or it isn't. If you cannot bear the thought of a wholesaler making money on the deal, then it would be on you to go out and do his or her job in addition to the rest of what you are doing. If you have the time for that, and you feel that is the best use of your time personally to do that, then nobody is stopping you.
- Washington, DC · Member since 2015 · 9 posts · 1 vote11y
As someone starting out and new to BP and REI I see wholesaling as a way to enter into REI, a gateway strategy so-to-speak.
Taking this off the forum would have a detrimental effect on those who are working their way up to becoming buy and hold investors and/or rehabbers.
I think the OP should think about more than just himself. This is a community and the "only one" mentality is not going to get you very far.
Based on all the posts so far, I think it is safe to say that the overwhelming majority of people are completely opposed to your suggestion.
- Real Estate Agent · Tampa, FL · Member since 2015 · 97 posts · 23 votes10y
Originally posted by @Brandon Sturgill:
Given wholesaling is not a form of investing in real estate...perhaps licensee's and true investors should start thinking about a push to do away with related discussions...
Seriously??? If wholesaling is not a true form of investing, as you state, then it certainly is an important part of it, which you can't deny. Many investors I know don't want to deal with the hassle of looking for their own properties because they are too busy land lording or doing fix/flips. I have a suggestion, perhaps you should quit BP and start your own "investor only" blog. Let us know how that works out for you.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes10y
Interesting take @Sherri Southwell Thanks for getting involved in the discussion. Things are really heating up in Florida around this topic to...if the investors you know don't like to look for their own properties, than that's an issue...I would be reluctant to classify them as an investor. And land-lording doesn't take any time if done right...and fix and flips require due diligence beyond the scope of 99% of the wholesalers in the market. If your friends are buying from wholesalers routinely, I seriously doubt they are getting quality deals. It's a sad crowd really...
My whole push in this subject is to challenge wholesalers to get properly educated and eventually do great things without completely taking advantage of folks that aren't educated enough to know better. Pretty simple really.
- Real Estate Agent · Tampa, FL · Member since 2015 · 97 posts · 23 votes10y
Challenge accepted! I have been learning as much as I can since getting into the business so I can be an educated and ethical wholesaler, flipper, and eventually landlord. I view wholesaling as a ground floor opportunity. It teaches investors the basics and gives them a foundation on which to build their business. Yes, I have heard about the unethical dealings of some wholesalers and they give the term "investor" a black eye but not all of them work that way. I have good mentors who encourage continued education and honest dealings because they want me to bring them good deals. Because investors don't want to look for their own properties does not mean they aren't investors. They are working smart. That's my goal. You are familiar with the term OPT? Do you think CEO's of billion dollar companies, like Warren Buffett, go out and get all their own deals? Would you then not classify him as an investor? Being a wholesaler has forced me to really learn this business so I am bringing good deals to my customers and so I am buying good deals from wholesalers for myself in the future. You say wholesalers should get properly educated so THEY don't take advantage of uneducated investors. You can't lay all the blame on them. They only do what they have been allowed to get away with. Investors should also be educated so THEY don't let themselves be victims. You see, if we are all educated and take accountability for our decisions, we keep each other in check and the system works. Eventually, these bad wholesalers will be pushed out of the business or will have to change their business models.
- Bulawayo, Zimbabwe · Member since 2015 · 1k+ posts · 253 votes10y
Originally posted by @Karl Krentzel:
This is clearly the most uninformed, ridiculous post I've ever read on BP.
... And if you want to limit free speech on a blogpost about a topic.. TURN IT OFF.. Don't Read it....
I second that.
- 10yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
I'm compelled to add to this topic, because of a question I was asked recently, and the typical misinformed information that brought that question on.
Here's the question: "Is Wholesaling a good place to start out if you have no money, no time, and not a lot of knowledge (yet)?"
Here's my answer...all the time: I shake my head in disbelief, look up to the Heavens, and say, "NO".
Why?
1 - A Wholesaler is someone that finds properties for other REI's, and thus must know everything a the REI taking the deal knows (and wants). If they lack this knowledge, how can they deliver the right properties to the REI?
2 - A Wholesaler must have an intimate knowledge of Market, Property and Rehab Analysis.
3 - A Wholesaler makes offers, which means he must have some money somewhere for POF most accepted offers require.
4 - All of the above takes time, the same time it would have taken the "end REI" to do all these same things.In short, a good Wholesaler, isn't a shortcut or "mini-REI". To be a good Wholesaler, you must do everything the end REI does (but doesn't have the time, or specific Market knowledge, etc...) to do. A Good Wholesaler is actually a full fledged REI...that does everything...right up to closing.
Maybe this is why there are so many (not all by far) poor, misinformed Wholesalers out there.
- Investor · Cincinnati, OH · Member since 2014 · 538 posts · 432 votes10y
I see wanna be investors try and take the perceived "wholesale" shortcut and fail miserably all the time. BP needs to always keep this topic relevant.
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes10y
FUN thread. Many know my thoughts on MOST of these operators. Any "wholesaler", agent, investor...operating LEGALLY AND HONESTLY is OK in my book. The big problem is there vast majority of these operators (as evidenced on BP) have -0- knowledge, but worse yet, many have no integrity. We recently had a "wholesaler" at our local REIA meeting. The either assign the contract OR close. No shenanigans that I know of. There is really no correlation in my book between "wholesalers" and licensed agents. If licensed agents pulled many of the stuff some of these operators did they would be sued AND lose their license as well. This is no licensing required for "wholesaling". If anyone saw my thread on the top ten reasons agents get sued, one of them was fraud and another misrepresentation of value. There are a LOT of these operators calling themselves "wholesalers" who operate this same way but without the threat of loss of their license. I almost always agree with Jay..and his post here is no exception. Get on title. Once you own it you can do with it as you please. Call yourself a "flipper" or "wholesaler" or "investor". Sleazy operators calling themselves "investors" while misleading sellers, never intending to close, and not having funding, hurts everyone...but in the end the homeowner is the victim! There should never be a victim in a business deal.
- Flipper/Rehabber · Huntington Beach, CA · Member since 2015 · 21 posts · 19 votes10y
I hear you @John Thedford and your concern about the lack of integrity amongst many people who call themselves "wholesalers, investors, etc." is the very reason that my business partner @Jason Fitzgerald Smith and I started our company. We saw an opportunity to adhere to a higher level of professionalism and we've been fortunate to meet and network with some incredibly honorable people both here on BP and in our local SoCal market. We work only with experienced and well funded fix-n-flippers, and we stand behind our offers - willing and able to close on any deal we can't assign. We believe that we can do well in this industry by doing good for others (sellers & buyers) & so far we've been proven right.
- Saint Peters, MO · Member since 2016 · 193 posts · 37 votes10y
Someone sounds butt hurt :(
- Investor · Saline, MI · Member since 2016 · 3 posts · 1 vote10yWholesalers are important. They find deals that would not necessarily make it to a realtor, thus providing opera unities for investors that don't have time to market.
- Property Manager · London, England · Member since 2016 · 19 posts · 12 votes10y
I think any method of getting property deals to private investors is a good thing as long as the commission/mark up isn't crazy. Sometimes it beats spending hours looking through realtor/Tricia/loopnet until the early hours. I'd be interested in Florida wholesale deals.
- Real Estate investor professional · Suwanee, GA · Member since 2016 · 233 posts · 81 votes10y
I do think that we need to disclose the difference between a wholesale and assignment deal.
Wholesaler actually closes, an assignor simply sells the contract...
Who should we be more concerned of?
Thing is the homeowners do not know unless they were keen enough to ask the "buyer" for p.o.f.
If they were to actually do this, it would probably reduce the number of folks that don't know what they're doing and keeps things on more of an ethical level..
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes10y
Agreed. I refer to non-licensed individuals (excluding their drives license of course LOL) as unlicensed brokers. A licensee, offering discounted properties at "wholesale" makes sense. I am meeting a lady this afternoon to file on a fraud and scammer. Some of these guys have been shut down by the State of Florida and promote their garbage on BP. Haven't seen one of them yet posting about being shut down:)
- Real Estate Consultant · Chapmansboro, TN · Member since 2016 · 14 posts · 8 votes10y
when I first got started as a Real Estate Broker in NY many years ago, the #1 term that was the "buzz" in the education was:
Caveat emptor /ˌkævɛɑːt ˈɛmptɔːr/ is Latin for "Let the buyer beware"[1] (from caveat, "may he beware", a subjunctive form of cavēre, "to beware" + ēmptor, "buyer"). Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. The phrase caveat emptor and its use as a disclaimer of warranties arise from the fact that buyers typically have less information about the good or service they are purchasing, while the seller has more information. The quality of this situation is known as 'information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller.
A common way that information asymmetry between seller and buyer has been addressed is through a legally-binding warranty, such as a guarantee of satisfaction. But without such a safeguard in place the ancient rule applies, and the buyer should beware.
It is ALWAYS the buyer's responsibility to perform due diligence on ANY & ALL perspective deals or transactions. I can understand concerns voiced here, however IMO rather than censoring terms the discussions would be better served by explaining to the unsuspecting some of the due diligence steps to take. Education & Knowledge are the keys to avoid being "cheated" or being taken advantage of. - Louisville, KY · Member since 2015 · 209 posts · 58 votes10y
I dont think its a problem to be an un licensed wholesaler as long as there is full disclosure. I like to tell the owner who I am, what my business does, I let them know I make no promises, I wont put a property under contract until i know I have a buyer, but i do have full permission to market their property. Wholesalers are needed as well to find those good deals that aren't on the mls and to minimize the time with dealing with the owner.
- Real Estate Investor/Wholesaler · Philadelphia, PA · Member since 2015 · 757 posts · 318 votes10y
Just like any other profession....there are good ones and bad ones. I've spent over 20+ years in corporate america on the sales and marketing side....and let me tell you the turnover is out of the control! There are just as many horrible sales people as there are good. Same thing with real estate agents.....some are good, bad and ugly and all in between! And guess what...same thing with wholesalers! A good wholesaler is just as valuable to investors as there GC is or there lender.
Maybe instead of attacking wholesalers.....why don't you spend your time attacking the people who claim to be "guru's" telling people that you can invest in real estate with no money! Go after the guys who are putting that idea out and not the little guys who are trying to make a living or break into a new industry. We all have to start somewhere......
Just keeping it real!
- Brooklyn, NY · Member since 2016 · 152 posts · 44 votes9y
I agree with @Lee S. If wholesaling is not your cup of tea, then ignore it... Whether or not its discussed on BP, wholesaling will still exist and be practiced by many looking to break into real estate with limited funds.
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