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
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes11y
Originally posted by @Richard C.:
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.
Oh the desperation. That old chestnut. Do you have some examples of these desperate sellers?
If I contract to buy a property for $200K directly with a seller and then assign the contract for $10K, where's this desperation you speak of?
If the same seller lists the property for $200K and gets a full price offer, that same seller nets more from my offer. Like $12K more. If they list and sell at $210K my offer of $200K still nets them more. If the seller has a complicating factor, I might be the only offer in town. That offer might be $190K
One of the problems on BP is we have so many people with opinions, but not so much with experience. The bulk of people on this site have never purchased directly from a seller. Most here know nothing about seller motivations. Very few agents here have any experience solving seller problems. Opinions create more clicks/content and advertising income for the site owner. But opinions make it difficult to have a fact based discussion, hence making it hard to learn anything new.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
@Frank Iglesias I wanted to respond but @Jay Hinrichs said it better anyway.
- 11yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Originally posted by @Jesse T.:
Originally posted by @Daniel Methven:
Originally posted by @Jesse T.:
Originally posted by @Daniel Methven:
I would like to learn every aspect of real estate which includes wholesaling. This site is about knowledge. There are probably many investors who have started out their careers wholesale. Don't rob the future of this technique. .,
It would be interesting to see of a BP poll of active investors how many started out as wholesalers.
I think that would solve this debate real quick. Even if just a few investors started out this way, think of how it probably helped shape their careers or helped them get the cash for their first few deals. They say knowledge is power!
I would suspect beginning as a wholesaler is actually a pretty rare entry point into Real Estate investing.
Off the top of my head these would be more common:
Real Estate Agent
Diversification/Re-investment(e.g. sold a business or stock portfolio)
General Contractor/Trades
Inherited property(ies)
"Accidental landlord"
Nope. Wholesaling is a very common place to start.
- Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes11y
Originally posted by @Hattie Dizmond:
Originally posted by @Brandon Sturgill:
@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...
I can't believe I'm actually devoting additional words to this inane thread, but weak, illogical arguments just beg for me to chime in!
Dude...you continually refer to the saintly "agents" and how they should be able to fulfill every need of the investor. I'm not a wholesaler, but I will wholesale deals. However, NO deal I get, regardless of my exit strategy, is available to an agent, unless they are doing the marketing I am. And, further, why would they do that type or level of marketing? If these sellers thought they could list their properties with an agent and take care of their problems, they likely would have already done it. There are reasons these people aren't listing with an agent. There are reasons they aren't trying to sell on the retail market. You are familiar with the term/description "motivated seller", right? For that matter, so of these people have listed their properties on the MLS, through an agent, and they DIDN'T sell.
Your argument holds about as much water as saying, "We have WalMart. Therefore, we don't need Sam's Club." Sam's Club fulfills a different niche than WalMart. Most of the new developments of Super WalMart include a Sam's Club in the same footprint. There they are, basically in the same parking lot. Clearly the king of retail doesn't believe they compete with each other. It's no different than Wholesalers and agents. They both fill a niche. Neither of them is fully equipped to fill the niche of the other, so they coexist.
Get over it.
I think you missed the point and raised a good issue. Here is the reality: the activities I take as an agent are the same activities I took when I wholesaled properties prior to becoming licensed. The reason most agents are unable to meet investor needs is because the started out as an agent...which is a total contradiction.
- Houston, TX · Member since 2015 · 25 posts · 3 votes11y
Originally posted by @Jay Hinrichs:
for better or worse one of the reasons sellers think a wholesaler is better than a realtor is they actually think they are getting a better deal with the wholesaler because they are not paying any commission.... this point is driven home in every wholesalers marketing pitch. So the seller by not consulting with a realtor many times only listens to what the wholesaler says they can pay and figures that what the property is worth.. not knowing that if they had checked true comps that they are selling for far less than market values.. Now of course this is not always the case and I bet there are wholesalers that divulge they are buying under FMV but there are wholesalers that will not and do not and are out to make as much as they can regardless if its in the best interest of the seller....
I know we wrestled with this concundrum in the timber industry.. you can put your timber up on the open market and you will get 5 offers and all of them will be vastly different.
So in essence the Seller is really thinking they are making out simply because they are not paying a commish and are clueless that they just left a bunch of money on the table.
I think that's the debate and issue between us RE brokers and the wholesale community.
You took the words right out of my mouth lol
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes11y
Originally posted by @Ben Leybovich:
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.
Nope, real education and facts are not sexy. And BP is nothing if not sexy.
Podcasts with regulators, AGs and lawmakers? So not going to happen. There are advertisers here that would cancel in a hot minute. The site owner knows where his bread and butter is. It's not with hard facts from regulators or lawmakers.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
I like this thread I think there is good info... and stuff for folks to think about.
someone early asked what they thought a RE broker made on a fee on these lower end deals as opposed to a wholesaler.
as I sit her and play on BP I got three huds in this morning that I am funding today.
One of them is a Federal home loan corp as seller property sold for 14,700 and remax charged 3k flat fee. FHL is netting 10k on this hud... got to think this pig had a sub prime mortgage on it at probably 50 to 80k no wonder we keep printing money.
My other two today one 25k and one 33k is a wholesaler who needs to come into title to flip and there are no RE fee's and of course he is not paying himself.
Generally though as I stated 1 to 5k on these cheap deals even 6k so more than a RE broker in most cases.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Account Closed
Touche' I guess I am just way to Naïve ... you make me laugh... Ok I got to go to the bank and fund some deals today for wholesalers those dirty dogs :)
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes11y
Originally posted by @Account Closed:
Originally posted by @Ben Leybovich:
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.
Nope, real education and facts are not sexy. And BP is nothing if not sexy.
Podcasts with regulators, AGs and lawmakers? So not going to happen. There are advertisers here that would cancel in a hot minute. The site owner knows where his bread and butter is. It's not with hard facts from regulators or lawmakers.
Love it!!!!
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes11y
Originally posted by @Jay Hinrichs:
@Account Closed
Touche' I guess I am just way to Naïve ... you make me laugh... Ok I got to go to the bank and fund some deals today for wholesalers those dirty dogs :)
Laughing all the way to the bank. I like it!
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes11y
Originally posted by @Jay Hinrichs:
@Account Closed
Touche' I guess I am just way to Naïve ... you make me laugh... Ok I got to go to the bank and fund some deals today for wholesalers those dirty dogs :)
Love it!
- Investor · roseville, MI · Member since 2014 · 29 posts · 2 votes11y
Originally posted by @Jesse T.:
Originally posted by @Daniel Methven:
Originally posted by @Jesse T.:
Originally posted by @Daniel Methven:
I would like to learn every aspect of real estate which includes wholesaling. This site is about knowledge. There are probably many investors who have started out their careers wholesale. Don't rob the future of this technique. .,
It would be interesting to see of a BP poll of active investors how many started out as wholesalers.
I think that would solve this debate real quick. Even if just a few investors started out this way, think of how it probably helped shape their careers or helped them get the cash for their first few deals. They say knowledge is power!
I would suspect beginning as a wholesaler is actually a pretty rare entry point into Real Estate investing.
Off the top of my head these would be more common:
Real Estate Agent
Diversification/Re-investment(e.g. sold a business or stock portfolio)
General Contractor/Trades
Inherited property(ies)
"Accidental landlord"
Yeah I don't think its going to be a huge count ; your right on that. You never know though. Wholesalers are a part of real estate nonetheless. Well in my eyes at least.
- Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes11y
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
How is it possible you even read these responses and came up with that synopsis? The only thing close to being accurate is #3. However, it is an incredibly selfish and myopic synthesis of what most of the folks said, since you seem to have eliminated or discounted the fact that people genuinely want to help the wholesalers succeed - not just so they themselves can profit.
#1..."evil" is your word. And the caveat about "professional wholesalers" is your distinction. Wholesaling exists as a separate and distinct niche within any number of support type businesses. Should we also eliminate all threads from Jerry Puckett and Mike Quarles about marketing and marketing campaigns?
#2...I don't think anyone but you even remotely referenced a "lack of licensed agents". For the love...I live in the Bible belt. There's a church on every corner. There's 3 licensed agents on every corner! What part of the fact that agents pursue different deals than wholesalers - or most investors these days - do you fail to understand? If a wholesaler is trying to wholesale properties from the MLS, that's a flagrant foul! I tell them that. I won't buy those deals. But, there are no agents out there locking up properties that aren't listed.
Seriously, you need to actually put your bias aside for a moment and read the posts with an open mind. Clearly, you have been interpreting the responses in light of your own prejudice. Otherwise, you would have never included my name in this "synopsis".
- Houston, TX · Member since 2015 · 25 posts · 3 votes11y
Originally posted by @Hattie Dizmond:
Originally posted by @Brandon Sturgill:
@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...
I can't believe I'm actually devoting additional words to this inane thread, but weak, illogical arguments just beg for me to chime in!
Dude...you continually refer to the saintly "agents" and how they should be able to fulfill every need of the investor. I'm not a wholesaler, but I will wholesale deals. However, NO deal I get, regardless of my exit strategy, is available to an agent, unless they are doing the marketing I am. And, further, why would they do that type or level of marketing? If these sellers thought they could list their properties with an agent and take care of their problems, they likely would have already done it. There are reasons these people aren't listing with an agent. There are reasons they aren't trying to sell on the retail market. You are familiar with the term/description "motivated seller", right? For that matter, so of these people have listed their properties on the MLS, through an agent, and they DIDN'T sell.
Your argument holds about as much water as saying, "We have WalMart. Therefore, we don't need Sam's Club." Sam's Club fulfills a different niche than WalMart. Most of the new developments of Super WalMart include a Sam's Club in the same footprint. There they are, basically in the same parking lot. Clearly the king of retail doesn't believe they compete with each other. It's no different than Wholesalers and agents. They both fill a niche. Neither of them is fully equipped to fill the niche of the other, so they coexist.
Get over it.
So are you saying as an investor, Realtors can't do your job. Thats stretching it a little. Hypothetically speaking if a client had a house listed for $108,000 are you willing to purchase it for $101,000 if it had issues because that would be what Realtors fees are a but less between 5%-6%. Sellers don't check market value all the time and are conned into selling their house for scraps when its not needed. And Realtors and Brokers normally have 100s and 1000s of connections with buyers on different levels and price points which make an okay Realtor Great. The trouble is just like may occupations there are many people who want yo become a Realtor because they watch HGTV and look at pretty houses and dont understand what all goes into doing this job. There are a lot of legalities and leagal documents that needs to be read, understood and retained. There are is an understanding of market areas and priceing correctly understanding each client individually and knowing your numbers. I know investors want to eliminate the need for a Realtor but there is a certain leavel of care and respect that many of us have for the business of Real Estate that can not be replaced.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes11y
I don't see BP billed as an educational site, there are very few professors here, it's a social site among those interested in RE, nothing more. The "educational" material here is, in my view, more of the how to, than the why things are done or what should be done.
Those new to the site need to consider who the may not know before jumping in looking foolish.
Ben seems to have some opinions on this topic, LOL.
Good points Jay and yes, transactional funding will keep the regulators away. Take title!
:)
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes11y
@Hattie Dizmond - you're funny :) I like you!
- Flipper/Rehabber · Vancouver, WA · Member since 2013 · 331 posts · 252 votes11y
Wow! I just saw the start of this looooong thread. I have done almost 200 real estate deals and several were wholesaling.
A lot of investors are interested in cash and cash flow. Wholesaling generates cash, yes?
It may be true that
"wholesaling is not a form of investing in real estate..."
but please don't tell investors that. It'll be 'our' little cash generating collective group secret.
My guess is this thread was started to generate conversation and controversy, which it definitely did.
Have fun!
- Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes11y
- Investor · Atlanta, GA · Member since 2011 · 79 posts · 38 votes11y
I think it's ok that after eight pages of posts we can all agree to either agree or disagree and move along. Because we are all going to go back to doing good business with other people just fine. Have a fantastic day!
- Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes11y
Originally posted by @Account Closed:
Originally posted by @Richard C.:
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.
Oh the desperation. That old chestnut. Do you have some examples of these desperate sellers?
If I contract to buy a property for $200K directly with a seller and then assign the contract for $10K, where's this desperation you speak of?
If the same seller lists the property for $200K and gets a full price offer, that same seller nets more from my offer. Like $12K more. If they list and sell at $210K my offer of $200K still nets them more. If the seller has a complicating factor, I might be the only offer in town. That offer might be $190K
One of the problems on BP is we have so many people with opinions, but not so much with experience. The bulk of people on this site have never purchased directly from a seller. Most here know nothing about seller motivations. Very few agents here have any experience solving seller problems. Opinions create more clicks/content and advertising income for the site owner. But opinions make it difficult to have a fact based discussion, hence making it hard to learn anything new.
If we are to believe the "wholesaler" hype, that $200,000 you are offering has to equal 70% of ARV plus your $10k assignment fee.
Which means the FMV is more than $200,000. How much more will vary, and can be debated.
Which means the seller, if he had a decent agent would NOT list at $200,000.
If we are talking about a house that needs no repairs, and has a fair market value of $210,000, then no one would do that deal because closing costs would swallow the profit.
As always on these threads, we are getting defensive reactions from people who are real estate professionals whose practice includes assigning contracts, when the criticism being offered is of the hundreds or thousands of clueless idiots messing with people's lives without being able to perform.
No one, including the original poster, is criticizing the sort of thing you and Hattie are talking about. Why are you so eager to defend the entire category, when it includes so many bad actors?
- Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes11y
Originally posted by @Bill Neves:
Wow! I just saw the start of this looooong thread. I have done almost 200 real estate deals and several were wholesaling.
A lot of investors are interested in cash and cash flow. Wholesaling generates cash, yes?
It may be true that
"wholesaling is not a form of investing in real estate..."
but please don't tell investors that. It'll be 'our' little cash generating collective group secret.
My guess is this thread was started to generate conversation and controversy, which it definitely did.
Have fun!
You know what? It isn't investing. The money my firm spends sending me around the country so I can fulfill my professional obligations is not investing, and if I was an independent consultant, the various expenses I would need to incur in the course of doing my job are not "investing." They are the expenses of conducting my business.
Investing means putting capital to work. Wholesalers deploy time and capital in doing a job. They are fundamentally different things.
Note: I would argue that owning residential rentals is only investing if you are paying for property management. If you are self-managing (as I do) you are also working in a business, not investing.
"Investing" implies passivity.
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes11y
In our appearance on CardoneZone a while back, my significant other (@Brandon Turner) referred to BP as "FaceBook, only smarter"...lol
Perhaps on a good day, which today is not hahaha
Bill?
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes11y
Originally posted by @Ben Leybovich:
In our appearance on CardoneZone a while back, my significant other (@Brandon Turner) referred to BP as "FaceBook, only smarter"...lol
Perhaps on a good day, which today is not hahaha
Bill?
"Smarter than FaceBook" is setting the bar mighty low.
- Chattanooga, TN · Member since 2015 · 24 posts · 24 votes11y
There are some good and reputable wholesellers and there are some bad and not so reputable wholesellers.
I am certain of it.
How I know of this fact I will just keep as a private trade secret. Don't ask me cause I'm not giving this priceless knowledge away for free. I want to keep my market advantage.
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