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 · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes11y
IMO...............nah, nvm.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
@Bill Gulley LMAO...too good.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
Much obliged @Ben Leybovich I learned from the best! Thanks for responding.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
From my perspective wholesaling is a very big business, just not in the type of properties your trying to buy... when you move up into the commercial realm or Multi family sellers by and large are more educated ( IE they somehow own a 1 to 20 million dollar property) so they are less likely to let some one with no means to close other than assigning a deal tie up their property.. IE they want REAL proof of Funds not just paid for or free letters from some HML... ( like I have done for my clients LOL)
However from a real world and practical matter I can attest that wholesaling is a very large industry on the sub 100k markets in most mid west and deep south areas that I work. My average deal flow is right at 200 files active at anyone time. out of those 200 I would say that about 30% of what my folks have bought has been brought to them by a wholesaler.. And I see fee's from 1k to 10k with 3 to 5k being fairly common. And I am just one little guy sitting in his home office in Orygun. Being the one who funds all these deals I am privy to the HUDs so In essence I am the one paying the wholesale fee's since its our money.
There was a link to a video done by an attorney in OHIO that interviewed the Actual head of the Department of Real Estate in Ohio... this is an invaluable video and should be in the BP archives this is what anyone who wants to be a so called Wholesaler in the State of Ohio should watch.. Its very clear that Ohio will take it very seriously if someone is turned in for wholesaling.. IE tying up property with no means to close and then advertising said property either on the internet , website craigslist what have you...
This attorney ( did the interview) was affiliated with the OHIO RIA association and it would be great if each state did the same interview.. then post it.. then anyone considering wholesaling could get the straight scoop instead of the hearsay that is bandied about on BP..
And in reality BP should take it upon them selves to have pod casts that interview state regulators.. instead of for profit middle men who have other agendas as they do now.. Its nice and all to hear how others have done things. but it would also be nice if BP would get the straight scoop out on this hot topic they could take the lead.. that would be some credible help for the average BP person trying to break into the business and thinks the quickest and easiest way is through wholesaling because that is what they are taught here and with other guru courses. So that's one thought.. !
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
@Account Closed Agreed. However, I do take issue with brokering deals in an industry that relies on licensing standards and regulation...That said, I think that wholesalers are real scrappers that are only permitted to exist because there are too many dipshit agents that can't meet the needs of investors...
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
Thanks for the perspective @Mike Nickles
- Licensed Ohio Realtor · Grove City, OH · Member since 2015 · 77 posts · 30 votes11y
Love this reply! Im a licensed agent as well. Seeing some of the "deals" these "sellers" have for me, I literally laugh out loud. They must not have the ability to remember as an agent I have acess to the MLS throughout the state and do thorough homework and research on each home I might be looking at for any of my investors or for myself! Numbers all OVER the place. But, real estate 101 says market value is determined by what a Buyer is willing to pay. Sadly, many don't do their homework, or don't have the acess to do it thoroughly. But look at Facebook. There are now thousands of pages for "buy and sell". I might find an item at a garage sale, negotiate the price down from $10.00 to just $1.00, and then turn around and brag about how great it is on a Fb selling site, and end up selling it for $50.00! Its a free world and free market. If I negotiate anything down in price, good for me for getting a deal. It's a deal to ME and that's what matters to me. If I can mark it up and sell it at a higher price, good for me! I sold at a price that I agreed to. No one made me buy at the price I did, and no one made the next guy pay my price. It's the price he felt was fair to pay. Supply and demand, Econ 101. And you're exactly right. What really is the real difference in wholesaling vs flipping? Taking title? Maybe. But in Ohio, many smart "wholesalers" do a double close, take title, even if only for 24-48 hours. So are they a wholesaler or flipper? This thread is quite entertaining!!
Originally posted by @John Thedford:
I got two calls last week. They had a house they wanted to "sell" me. One was a local guy. The other "seller" was out of state. It was the same house but priced $18,000 higher by the out of state "seller". It is on McGregor Blvd in Ft Myers. I chose not to deal with either "seller". Not long ago I was getting texts from some nutty guy calling himself "Thomas super bird dog". He texted me at least 3 times with real "deals". Buy this one for 300K..and ARV is 600K! WOW! It was listed in the MLS in the low 200's. He gave me other bulloney with other properties that were listed claiming outrageous ARV's that were totally bogus. Why do I need anyone like these guys? I am an investor and agent. What are these guys providing in the form of valuable services?
What is the difference between a flipper and wholesaler? The flipper actually owns the property. Can he be called a "wholesaler" if he delivers properties at a reduced price? Can you actually sell something you don't own? If I want to buy gold chains from a wholesaler, I go to 47th Street in NY or S. Hill Street in LA, show my business card and resale tax number, and buy tax exempt. That is true wholesaling.
How many "wholesalers" use BS weasel clauses to trick sellers? Read the forums. Many of them actually admit it. They unintentionally reveal they are dishonest hucksters lying to homeowners. They don't have funds to close and never had any intention of closing. These people are exemplary of people I don't want to do business with in ANY profession.
Are there honest wholesalers? I am sure there are some. This has been an interesting thread. I would disagree that "wholesalers" provide services an agent could not provide. I would disagree they drive up prices any more than licensed agents. Markets determine pricing. I find it easier to ignore most of these ""wholesalers". When I responded to their posts asking if they intended to close on deals, asking if they were using BS weasel clauses to dupe sellers, etc...there was total silence. They didn't need to answer...their posts revealed their true intentions. One of these huckster "wholesalers" is affiliated with one of the other posters in this thread that defends wholesalers. Each poster has to be considered on an individual basis to determine if you want to deal with them.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
Hey @Wendell De Guzman..you are an exception, man...you already made it to the level of a BP podcast. :)
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes11y
Originally posted by @Jay Hinrichs:
And in reality BP should take it upon them selves to have pod casts that interview state regulators.. instead of for profit middle men who have other agendas as they do now.. Its nice and all to hear how others have done things. but it would also be nice if BP would get the straight scoop out on this hot topic they could take the lead.. that would be some credible help for the average BP person trying to break into the business and thinks the quickest and easiest way is through wholesaling because that is what they are taught here and with other guru courses. So that's one thought.. !
I agree. This, however, may relinquish plausible deniability that BP enjoyes, and this might be one reason BP doesn't do it. Another reason is that it ain't sexy - we wanna hear how easy it is to buy 100 pigs in Ohio, even if this message is coupled with the statement that there's no cash flow to be had from them, and the money is made in servicing...lol
All said, I agree that if BP bills itself as an education platform, there should be some actual, real education here - there's very little of that - mostly hype, either on the podcast or the blog. I try to write reality on the blog, Jay, but there is only so much I can do. Bill G is right. You are right. And in his intention, Brandon is right as well.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
@Jay Hinrichs interesting perspective...
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
I agree with you. but one can try... I wonder how many folks actually took the time to watch that video... LOL... probably not many because reality is a *****.
My larger Venders who make some pretty serious dough at this game. Dough that the average wanna be Bper wants to somehow start to make, the whole reason I exist to them is to keep them compliant with state regs.. they don't want to take the chance of getting shut down.. just takes one complaint.. But I can certainly see the little wholesaler who is making decent money just continue to do it until they are told by an authority they cannot.
Its very much like here in Orygun, you cannot buy and rehab and sell a property for profit as an individual... many think they just need to hire a licensed GC.. but that is illegal in Orygun you need to be a licensed bonded and insured Developer with the appropriate license to even do one a year... This law is violated each and every day and 10 times on Sunday.. I have never seen a local RE club or REIA here in Orygun even address it.. Why because it would cause half of their members to go home.. as it cost about 5k to get legally set up. So not only do wholesalers need this additional license even if they never touch the property.. but the state DRE would take the same tac as OHIO has.. and the larger for real Wholesalers in this state are licensed.
- Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes11y
Originally posted by @Jay Hinrichs:
And in reality BP should take it upon them selves to have pod casts that interview state regulators.. instead of for profit middle men who have other agendas as they do now.. Its nice and all to hear how others have done things. but it would also be nice if BP would get the straight scoop out on this hot topic they could take the lead.. that would be some credible help for the average BP person trying to break into the business and thinks the quickest and easiest way is through wholesaling because that is what they are taught here and with other guru courses. So that's one thought.. !
This is a fantastic idea. In fact, I would extend it a bit, to cover other aspects of real estate law. It drives me nuts when some poster in Texas or Tennessee gives advice to a landlord in California or Massachusetts that will result in that landlord having a very, very rough year.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
So, I gained some insight here (which was the point of this post...I think)
1) The majority agrees that wholesaling is a necessary evil (except for those that claim to be "professional wholesalers")...
2) The only reason wholesaling exists is because there is a lack of licensed agents in the overall RE market to adequately meet the needs of investors (agreed and agreed)...
3) Individuals ("investors") would rather educate folks to become good wholesalers through continued discussion of what not to do as a wholesaler so they can profit more in the future when they buy from them...?
Right?...
@Will Barnard @Al Bunch @Richard C. @Micah Copeland @James DeRoest @Hattie Dizmond @Gilbert Dominguez @Manolo D. @Scott Gray @Scott Gray @Gregory Guillet @Bill Gulley @Anthony Henderson @Dev Horn @Frank Iglesias @Daniel I. @Karl Krentzel @Ben Leybovich @Steve McGovern @Bryant Moran @Mike Nickles @Dan Oliver @Joel Owens @Account Closed @Engelo Rumora @Paul Santos @Lee S. @Aimee Sowards-Mounts @John Thedford @Jesse T. @Joe Villeneuve @Esaul Viramontes @David Wurzel @James Wise
- Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes11y
Almost. But I won't buy from one. In part for ethical reasons and in part for practical reasons. I work in a very small area. I live here. I don't want a reputation for being part of taking advantage of desperate people.
- Chattanooga, TN · Member since 2015 · 24 posts · 24 votes11y
Wholesaling is one of many market channels an investor can use to obtain assets. Nothing more, nothing less.
- Herndon, VA · Member since 2014 · 1k+ posts · 324 votes11y
Originally posted by @Jay Hinrichs:
However from a real world and practical matter I can attest that wholesaling is a very large industry on the sub 100k markets in most mid west and deep south areas that I work. My average deal flow is right at 200 files active at anyone time. out of those 200 I would say that about 30% of what my folks have bought has been brought to them by a wholesaler.. And I see fee's from 1k to 10k with 3 to 5k being fairly common. And I am just one little guy sitting in his home office in Orygun. Being the one who funds all these deals I am privy to the HUDs so In essence I am the one paying the wholesale fee's since its our money.
How do the fees compare with typical real estate agent commissions at those price points?
It seems if they are generally in line with agent/broker commissions - the argument that wholesaling as a primary strategy is anything other than unlicensed brokering gets even weaker.
- Centre Hall, PA · Member since 2015 · 48 posts · 20 votes11yHey toots, (The original poster) you've obviously been had by a wholesaler. You want us rational and intelligent investors to stop discussing a certain method of investing because you don't like it? Oh, poor baby. If you got burned by a wholesaler, that's YOUR fault, not his or ours. You were beat by someone smarter and more determined than you. Had you got off the couch and put the work in yourself, you would have found the deals yourself and make lots of money. Don't blame others for your downfalls in life, that won't get you anywhere.
- 11yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Originally posted by @Brandon Sturgill:
So, I gained some insight here (which was the point of this post...I think)
1) The majority agrees that wholesaling is a necessary evil (except for those that claim to be "professional wholesalers")...
2) The only reason wholesaling exists is because there is a lack of licensed agents in the overall RE market to adequately meet the needs of investors (agreed and agreed)...
3) Individuals ("investors") would rather educate folks to become good wholesalers through continued discussion of what not to do as a wholesaler so they can profit more in the future when they buy from them...?
Right?...
@Will Barnard @Al Bunch @Richard C. @Micah Copeland @James DeRoest @Hattie Dizmond @Gilbert Dominguez @Manolo D. @Scott Gray @Scott Gray @Gregory Guillet @Bill Gulley @Anthony Henderson @Dev Horn @Frank Iglesias @Daniel I. @Karl Krentzel @Ben Leybovich @Steve McGovern @Bryant Moran @Mike Nickles @Dan Oliver @Joel Owens @Account Closed @Engelo Rumora @Paul Santos @Lee S. @Aimee Sowards-Mounts @John Thedford @Jesse T. @Joe Villeneuve @Esaul Viramontes @David Wurzel @James Wise
I agree with number 3, but not the other two:
1) Wholesaling is not an evil. Bad wholesalers are.
2) Wholesaling exist as an opportunity. There may be a lack of REA in markets, but wholesaling exist in markets where there are plenty of REA as well.
3) Correct.
- 11yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Originally posted by @Matthew Fragassi:
Hey toots, (The original poster) you've obviously been had by a wholesaler.You want us rational and intelligent investors to stop discussing a certain method of investing because you don't like it? Oh, poor baby.
If you got burned by a wholesaler, that's YOUR fault, not his or ours. You were beat by someone smarter and more determined than you.
Had you got off the couch and put the work in yourself, you would have found the deals yourself and make lots of money.
Don't blame others for your downfalls in life, that won't get you anywhere.
@Matthew Fragassi
Obviously you don't know Brandon. Maybe you should have read more than just the headline.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
the REA fee's I see on huds especially the lower value assets are usually flat fee's 1k to 3k...really depends on the broker and seller arrangement.
There is no question that wholesaling in this manner is a brokerage activity .. one is making a fee for bringing two parties together.. its just whether a state see's it as needing a license or if the state does not care.. that's what it boils down to ... and in Ohio the state CARES.
The fact that the sheer volume of wholesaling is so great as to be pretty tough to enforce the laws.. so that's basically why it comes down to consumer complaints.. if no consumers complain then nothing happens. apparently there were lots of consumer complaints in Ohio and they just decided to enforce the laws that have been on the books for many years.
I really don't care personally.. I make money on both sides of this deal.. I make it when I fund high volume wholesalers because they want to be complaint with the law.. And I fund HIgh volume flippers who buy from said wholesalers... makes no matter to me personally. I just comment on what my personal interpretations of the Real Estate licensing laws are.
Mississippi is another state that if your not in title they will shut you down. ONe of my larger TK providers back in the day got a cease and desist.. so I ended up not only funding his buyers like normal but I got to make a fee for transactional funding him so he did not violate the law. And just to be clear, this guy got in trouble again and they picked him up on a Friday night him and his wife and put them in Jail in Mississippi.. he bailed out on a Monday and spent many thousands of dollars keeping himself from going to prison.. so if the authorities want to take you on.. they will win.
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes11y
Originally posted by @Matthew Fragassi:
Hey toots, (The original poster) you've obviously been had by a wholesaler.You want us rational and intelligent investors to stop discussing a certain method of investing because you don't like it? Oh, poor baby.
If you got burned by a wholesaler, that's YOUR fault, not his or ours. You were beat by someone smarter and more determined than you.
Had you got off the couch and put the work in yourself, you would have found the deals yourself and make lots of money.
Don't blame others for your downfalls in life, that won't get you anywhere.
Hahaha - hey, Matt - did you just fall out of a tree, or has it been a month? This is like a little pocket dog barking at an elephant. How's it working out for you? lol
- Investor · Atlanta, GA · Member since 2011 · 79 posts · 38 votes11y
I'll bite and chime in again...
1) I have never found anything about wholesaling evil any more than Best Buy marking up that $1.00 cable and selling it for $10 to us. That's a huge mark up. Imagine getting that on a piece of property. :-D On a bigger level, maybe the TV they sell us. Or how about banks getting paid to sell our mortgage to someone else? A new bank that maybe we didn't like as much as the last mortgagee as an example. We don't cry about that. Wholesaling exists in lots of industries. It will be evil when Buy Low, Sell High is dubbed evil.
2) Atlanta has 20k agents or more so we certainly are not lacking in agents here. Every market is different true but I find there are not many wholesalers in smaller markets (under 5000) anyway. Then again, there are thousands of markets in this country so I can't really speak to that with accuracy.
3) I love educating newer wholesalers that are willing to grow. I have made money with them. I congratulate them when they get a good deal. I also sometimes need to sell stuff off as well that I buy because maybe a better opportunity comes along and the current one works for others.
The wholesaling concept isn't going anywhere and there is no reason for it to go anywhere. There is a lot of value. We simply have to put in the effort to find the people to get it with. If one doesn't want to put it in, that's fine too. But let's respect the people making it happen with integrity and quality. I think every investor trying to do the right thing is due that. Nobody's perfect. Let's continue to assist each other instead of shooting each other down. Simply no need for it.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
well I know I am nearly perfect !.. but as wholesaling goes... there is no comparison with a lender assigning their mortgage to a servicing company... the Servicing company MUST be licensed and the Mortgage originator must BE LICENSED> wholesalers are free agents no license, no rules , no ethics , other than their own personal moral beliefs... And the industry of wholesaling is just rife with newbie wanna be investors who think its the quickest way to RE richs and the reality is many of them bugger up sellers and transactions.. that's the reality of it... are there good and great wholesalers.. for sure there are. I am thinking personally since this is RE related and we saw what happened with Dodd Frank and sub prime etc.. The state agencies if they start getting complaints will do as Ohio did and just enforce their laws that are already on the books.. And as I said on page one of this thread. good wholesalers or those that are high volume and want to stay in the game will just adapt by lining up their money sources so they can actually close on the deals. even if its transactional and a flip flop escrow.. but it will keep them compliant for now.
- Investor · Atlanta, GA · Member since 2011 · 79 posts · 38 votes11y
@Jay Hinrichs
Love it. I am with you that the amount of new people diving in without direction expecting to be living on the beach in the next 30 days is pretty high right now and seems to be climbing but that's a testament to the quality of marketing sometimes for better and sadly for worse. That's an entirely different conversation I think we can agree. You are right, a lot of new people that go at it recklessly much things up for the legitimate people. I have to have that same battle seems like everyday when deals cross my desk that don't make sense which is easily the majority.
Also I used the mortgage assignment as merely an example stating that people sell things to others for a price that is slightly higher. I am not trying to start a licensing conversation. I have licensed team members on my team so I am fully aware of those ideas.
I think we are in agreement though although if you are nearly perfect, then I need to come hang out with you one day. :-)
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