Updated about 1 year ago on . Most recent reply
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Are Wholesalers Really Your Golden Ticket To Succes??
#2 All Forums Contributor
- Attorney
- Philadelphia
Ok, I'm sure I'll get a lot of blowback for writing this but why is there a growing belief amongst the BiggerPockets community that wholesalers are the gatekeepers to good real estate deals and critical to your overall success? From my observations, most properties marketed by wholesalers are not "off market deals". They are properties circulated to long lists of unsophisticated buyers and if you are the highest offer you've likely outbid a bunch of prospective buyers who underestimated their improvement costs or overestimated their ARV while most likely proceeding without the ability to perform normal transaction diligence.
Add to this the rapidly evolving regulatory climate with additional disclosures many wholesalers are required to make before entering into contracts. In most cases the better wholesale deals are the result of uninformed sellers. I assume many of these Sellers may consider other options with more information at their disposal. I also suspect these regulations are coming to a town near you if they haven’t already because that’s the trend.
Despite my observations, many place such great emphasis on networking with wholesalers as if they are the golden ticket to success. You often hear from real estate investors who scaled businesses attribute their success to great contractor relationships, a realtor who helped identify an underserved housing need, lenders who gave them a chance despite not having a balance sheet, even good attorneys who navigated them through entitlements or perhaps accountants who educated them on tax saving strategies. I haven’t heard the story of the investor who rode the coat tails of a wholesaler to the same level of success but networking and building relationships with wholesalers seems to be prioritized over all others industry participants.
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Anyone who places an emphasis on networking with wholesalers as a golden ticket is a wholesaler. If you're counting on wholesalers for success you're screwed.