I know wholesalers that invest more in their business than many rehaber and flippers or buyers and they do their job very very professionally. Do you think because you bought one property you have answered the needs of the many thousands of people who are in a financially situation or holding distressed properties that they need help in selling them?
A wholesaler ties up a property through contract and then offers them to those that can fund the next step in making the property marketable at retail by adding value and improving the neighborhood revitalizing the area.
If you invest your time you are investing money because you are not getting paid by the hour you get paid when someone buys your contract. All the time it takes to properly evaluate a property, such as zoning, tax record and lien research, knowing the current mortgage amount if any, properly, adequately and accurately determine repair costs, properly and accurately determine ARV. All this work in an investment and a cost.
If you are busy on one of your projects and someone needs to be saved from foreclosure you cannot be there to talk with that person and take any action that will help them. Some one has to start the ball rolling in getting that property to those that have the resources to help more completely. Some also needs to provide a way to market that property to those that can and are willing to fund an amount more adequate in line with a seller's needs.
Why do you invest? Isn't it to make a profit? someone needs to be making sure there is an adequate supply of deals for you to work on and profit from otherwise as you propose let the real estate agents do it all. How would your business do if the only properties that you could be had to be purchased at 95% of ARV?
Read almost any real estate listing. example: "A warehouse for sale advertised and listed as multi-residential good for condos or townhouses" for only $400K, then followed by a disclaimer that the property is zoned light industrial and the buyer is responsible for verifying with the city planning and building department as to the ability to build condos or townhouses. So many times properties are listed and advertised for a use which they will never be approved. You will have to do all of your own due diligence and possibly waste allot of your time.
A good wholesaler does his or her due diligence and that is part of the service they provide aside from getting the property to you at a good price that creates the opportunity for you to profit sufficiently enough to make it worth your while.
By being able to post on here about wholesaling you have an opportunity to tell the wholesalers what you need from them, meaning provide some training and education and encouragement because we really need them. Wholesalers as whole are investor friendly and real estate agents will typically not be.
You say wholesalers inflate prices. They work very hard and both need to and deserve to get paid. They typically work allot harder at getting you a property and provide you information about that property that agents will just never typically do.
Do you think a real estate agent is going to take the time to do all the due diligence on a property that you will require? typically almost never if ever !
Do you think a real estate agent is going to go through the process of obtaining accurate and reliable repair figures? Typically almost never if ever.
Do you think a real estate agent is concerned about getting you a property at a price that will leave enough meat on the deal for you? hahahah that is laughable.
To say that Wholesaling is not a part of the real estate investment process is like saying a builder can do just fine without building permits on every project. If someone has primed the project by doing everything required to obtain the building permits the builder can buy a property and go to work the next day otherwise they will be waiting in limbo anywhere from 3 months to 2 years without working on every single project.
Wholesalers make the investment process far more efficient than it would be without them.
I think you are being extremely naive. To take your thinking further we can say retail buyers do not need investors and renters do not need landlords and investor/owners do not need property managers and so on and so on. Your thinking proposes a line of thinking which will create a system that just will never work.
You seem to think every investor is in your very same situation and that they all do deals at the same level as you. From you making the statement that wholesalers should be excluded from the process suggest to me that you are not a professional investor and truly lack the sophistication to understand the value and good use of wholesalers.
Generally there is room for improvement, a need for further education, exposure to unknown and un-thought of problems, and training at all levels of real restate investing that is the reason BiggerPockets is so popular and appreciated so much by so many people.
Rather than bash you I would suggest you become more open minded and listen and question why others do see the great benefit of having real estate wholesalers as an integral part of our business. Give yourself more years to develop into a more professional investor and generally as a business person.
What wholesalers do and can provide is a much needed service so it is to our benefit to provide encouragement to them, education, updating news, warnings, training, and comment as well as support by using and paying them for their service when we need them.
Its up to us to do our best to protect, refine, and promote our business exactly as we are doing and have the opportunity to do right here on BiggerPockets because if not then the government is ever ready to regulate us all right out of business.
By advocating the exclusion of wholesaling and wholesalers from our business and discussion is like advocating that the typical car be run on 3 wheels instead of 4 when it in fact has been designed to fun on 4 wheels. Wholesaling as a whole fits just fine in our overall world of real estate investing.
