Do Investor like Wholesalers

20 Replies

Wholesaling has it's benefits but when you are on the buying side why would you even deal with a wholesaler when you know they are charging you more than the asking price. Being a realtor and Investor I can see what properties are selling for, market value, comps and the whole 9. Working with a Realtor insures you are protected thoughts.......

404.295.7877 | http://www.detroitglobalinvestors.com | MI Agent # 388605, GA Agent # 370583

I feel that 95% of wholesalers I encounter, are just full of crap, have no real idea of the value of the property, the ARV, and usually are not doing things completely by the book. However there are several wholesalers Ive encountered who are very legit. And why would I care that they are charging me more for the property? Am I not going to go ahead and turn around and do the same thing that the wholesaler just did and make a profit too. There are very few good wholesalers out there, but the good ones deserve the money they make, and I do not begrudge them that as an investor.

Medium logo lf re cire box white bboxRussell Brazil, Associate Broker w/ Long & Foster | [email protected] | (301) 893‑4635 | http://www.RussellBrazil.com | MD Agent # 648402, DC Agent # SP98375353, VA Agent # 0225219736, MA Agent # 9052346 | Podcast Guest on Show #192

I have purchased several properties from wholesalers (actually one wholesaler) and hope to purchase many more from them. I only buy if the property meets my needs and is at a price that works for me. I would much rather deal with a knowledgeable wholesaler than a realtard who does not understand my offer and gets in the way.

@Maria Fortner   The key reason for using wholesalers is to leverage your time and effort. If you have a group of five equally talented people, they will obviously be able to do more work than any individual so the benefit of having good wholesalers is that they can cover a LOT more ground than you can by yourself.  A "good" wholesaler will bring you off-market deals that you would have never seen.  I agree with Russell that those guys are very hard to find.  Most wholesalers I've encountered were trying to work their way up to become my competition (flipping) or they were inexperienced guys with little experience that would just throw garbage at investors hoping someone would buy something.  Hopefully you can find a good one.  You will really benefit from their help.  Good luck!  

Considering anyone can get up and decide to be a wholesaler the next day makes the title a bit too easy to acquire and leads to alot of unexperienced efforts. Most wholesalers I've tried to deal with usually pad their comps and ARVs too much. I personally have gravitated more towards realtors because of that and have had better experiences.

With that said, I give props to anyone trying to putting together a good honest effort. I personally run direct mail campaigns for my own purchasing. Wholesaling's a tough gig!

Rafael Norat, RN Business Management | [email protected] | 908‑419‑3665

I love wholesalers. I get the opportunity to take deals, what's not to love?

Your main argument is I should not like a wholesaler because he makes a profit? That's the entire point of capitalism!!! Do I hate Starbucks because they make a profit? Apple? Ford? Should my tenants hate me because I make a profit? Should we all hate bigger pockets because Brandon and Josh make a profit?

These people bring me deals, and they want to be paid for their time is all. They do the marketing and negotiating for me, that's certainly worth something. If they are charging too much it's as simple as saying no, the same as any other deal that I may come across.

Working with a realtor has it's benefits sure, but it has plenty of detriments as well.

A wholesaler is a marketing person.  They find deals off-market.  All the deals we are looking for are off-market opportunities that real estate agents rarely see.

That said, most "wholesalers" are "newbies" that often are just fumbling around, tying up properties with no good plan on how to consummate the deal.

GOOD wholesalers are excellent marketers that have a large list of REAL cash buyers.  Those cash buyers are often not great marketing people, so it's a complimentary relationship.

I have a real estate agent partner, and she is one of the most valuable people on my team. But she rarely finds me deals on the MLS. But I often find sellers that are not in a hurry, not a distressed house, and those end up being listings for her. So, here again it's a very complimentary relationship and I would completely support your idea that all investors NEED an agent partner. I just don't get my DEALS that way. To find motivated sellers with distressed properties & situations, someone needs to marketing. Great wholesalers are great marketers with large networks of real cash buyers.

"People who matter are most aware that everyone else does, too." ~ Malcolm S. Forbes

Medium wbh square logoDev Horn, We Buy Houses® | [email protected] | 877‑932‑8946 | http://webuyhouses.com/profile/arlington

As a successful "wholesaler" I think Dev is right on track. I provide a service your Realtor can't. I am getting leads that are off market and truly under priced. Not to mention I'm paying a pretty penny to get those leads. My marketing cost runs me anywhere from 2-4k a month. 

How I handle deals.... 

I will try and wholesale anything I get first. If I can make a quick buck great. 

If not I will actually close on the deal myself. Some buyers only check the MLS. Now that I own it I can put it on the MLS.

Or.... 

I rehab the home myself and sell retail. 

I rehab the home and keep it as a rental.  

There's a reason why my investors LOVE me. That's also the reason I go by "investor" not "wholesaler". 

Medium head icon colorRyan Dossey, Call Porter | http://Callporter.com | IN Agent # RB15001099

Hello Russell, thanks for your post. I'm a new wholesaler, and I wanted to ask about using a realtor to find an end buyer.  If I have a property under contract and I want to have a realtor find me an end buyer (an investor), could I offer the realtor a % of the  profit rather than the realtor getting a Commission that's a % of the sale price?  For example, the seller signs a contract with me to sell the fixer upper "As-Is" for $200K.  I want to assign the contract to an investor for at least $220K, so $20K profit.   The realtor finds me an end buyer investor who pays $220K plus closing costs. Then I split the $20K profit 50/50 with the realtor so we each get $10K.  Is that feasible?

I'm far from a wholesaler's advocate, but the good ones do fill a necessary gap for the seller situations and property conditions that can't get listed with an agent.  @Maria Fortner - you see what properties are selling for ON THE MLS. The wholesale properties are off-market properties, usually with condition issues, lien & code issues. Not always, but a lot of the time. There is usually a good reason the seller didn't list for 6 months in hopes of someone else getting a buyer for them. Oh and we all pay more when a realtor is involved, too,

But your question to me is ironic - why would I pay YOU extra when I can look at what's on the public MLS as well? I always get a discount when I represent myself as a buyer. The listing agent doesn't have to co-broke, therefore not leave the seller as broke and they pass the savings on to me so I am not broker either. Saying a buyer's agent costs nothing is a myth. Realtors are just wholesalers with a license. Some are very good at what they do and provide a valuable and necessary service, but in a nutshell you are transactional only.

@Steve Vaughan

I would like that twice if I could!

Reminded me of a great point. I would say 60% of the deals I have done a Realtor has been unable to sell. For people who have tried selling on the MLS and have tried selling themselves I am their best option.

Some Realtors simply don't want to mess with houses that are destroyed or low $$$ deals. I've been in some nasty houses. The worst one I have been in had spiders in the moldy basement with webs like that scene from lord of the rings. It was a drug/party house. It had bullet holes in windows. Spray painted walls. Anything of value ripped out. 

Seller was getting raked through the coals by county... 

I made twenty grand on that deal. Their Realtor and Attorney couldn't help them sell it.

That's also the only deal I've open carried when at/showing.

Medium head icon colorRyan Dossey, Call Porter | http://Callporter.com | IN Agent # RB15001099

@RyanD, I'll remember that  :)

Wow!!! There are so many comments I feel it is 50/50. I understand capitalism this is America and yes people should be paid for their work. The reason Wholesalers even have a job is because there is sooo much money to be made in real estate. Also, I have experienced lots of buyers being upset because they were overcharged. You can just wake up and be a wholesaler and not truly understand the business. Both has it's benefits but as a Realtor I deal with FSBO as well, but majority of my deals are constructed through Realtors. As a Realtor I believe I have more access to all of real estate than a wholesaler. I am considering partnering with one now but when it comes to commissions and splits things are in the grey area. Thanks for all your comments!!

404.295.7877 | http://www.detroitglobalinvestors.com | MI Agent # 388605, GA Agent # 370583

I think that, just like any career field position, there are good and bad. Bad realtors, and bad wholesalers. The vast majority of them are average at best. HOWEVER, if you are good at what you do, know exactly what you're doing, all your numbers AND know how to network, as a wholesaler or Realtor you are worth your weight in gold. It's the ability to find deals, negotiate them, and connect them to those with $$ that's an impressive skill set.

907‑360‑7448 | http://propertiesofalaska.com | AK Agent # 18690

Why do I read these posts and respond... One day I'll learn to avoid the 'are wholesalers..." posts. 

The same questions could be made about investors, agents, lenders, escrows etc... some will rock, some will suck. 

Just because you have a title next to your name doesn't suddenly mean you are infallible. 

Originally posted by @Maria Fortner :

... You can just wake up and be a wholesaler and not truly understand the business. ...

 Very true. Most beginners are advised to start as a wholesaler, they know very little, and some of what they "know" or have been taught is wrong.

Unfortunately, one can almost wake up and be a real estate agent. In Michigan you only need to take a 40 hour class and pass an easy test. At that point one can call themselves an agent, despite not really knowing most of the basic aspects of being a retail agent. 

Then layer on top of that the fact that even many experienced real estate agents don't know the first thing about real estate investment, and I can understand why most investors I know in today's market don't use agents to find properties for them.

I would be thrilled if I could find a wholesaler or wholesalers that could consistently provide deals that penciled out for me. I would not care at all how much they make as long as the information was accurate. What I usually get is an email misrepresenting the ARV and/or rehab estimate using comps from the good side of the tracks 2 miles away.

I would guess that a good wholesaler is worth their weight in gold.   When I have heard some good wholesalers speak they often say they did 20/30/50 deals last year and all of them were sold to 3-5 buyers.   I am guessing you have to be a buyer that can consistently perform to get in with wholesalers that can consistently bring great deals to the table.  

Originally posted by @Maria Fortner :

Wholesaling has it's benefits but when you are on the buying side why would you even deal with a wholesaler when you know they are charging you more than the asking price. Being a realtor and Investor I can see what properties are selling for, market value, comps and the whole 9. Working with a Realtor insures you are protected thoughts.......

Let's analyze that last statement, "Working with a Realtor insures you are protected." 

How? We're talking about a person who took some pathetically simple classes, most likely online, then got a CD or went to a one day seminar that basically spoon feeds the state test questions to him/her word for word, and he/she passes a pretty simple test. Which by the way, asks questions that are absolutely not related to actually being in the business of selling real estate. Then, this same person puts on a suit, leases and expensive car, buys some business cars, don't forget to put your face on their, and walks around calling him/herself a "professional."

My question is, professional what? And just because this person writes a check to the board to get that totally unearned and absolutely meaningless designation as Realtor, how does this protect anyone? 

I'm a licensed broker for more than 10 years and my favorite and totally factual statement related to being in this business is "99% of licensed sales people out there make the rest of us look bad."

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