Investor · Cedar Park, TX · Member since 2016 · 6 posts · 2 votes
Just wondering if anyone has had any real success working with wholesalers, particularly in Central Texas? After analyzing several properties they've sent me, it seems like they suck out all the profit and then leave you with nothing but risk and very little profit. No wonder wholesalers are popping up like weeds everywhere, a lot of money in that game with no risk and very little capital investment. They're preying on the aggressive "newbie investors" who don't know what a good deal is if it kicked them in the a$$. I've heard they take a minimum of 20% out of every deal they pass along which is insane. I'm starting to believe that you really need to beat them at their own game in order to have any kind of success as an investor. Anyone with a different experience or opinion? Thanks!
@Randy Miller you are absolutely correct!! we faced the same problems here in the houston area (my partner and i), so we decided to do something about it and now within the last 6 weeks we were able to get 4 properties in contract, and already closed on 3.
message me if you want to talk more! just know there are other ways
Your right. You really have to work your own numbers and never trust theirs. I think there are also new wholesalers that are getting in the game but they are buying too high not allowing enough room for a good deal. Meassage me if you would like to talk more.
@Randy Miller you are absolutely correct!! we faced the same problems here in the houston area (my partner and i), so we decided to do something about it and now within the last 6 weeks we were able to get 4 properties in contract, and already closed on 3.
message me if you want to talk more! just know there are other ways
@Randy Miller I started mailing out 1,800 letters per month about 2 months ago and just go my first deal two weeks ago. On this deal there was actually enough upside that I sold it to another wholesaler and they resold it to an investor. I could have tried to suck all of the profit out of the deal but I want to build relationships with other investors that way I never have any trouble selling a property.
I actually got this deal because the first wholesaler that met with the owner was a shady guy who tried to put all of these weasel clauses into the contract and refused to put down any earnest money. So, when I showed up and put down $3,000 earnest money and no weasel clauses the owner was thrilled. I just did a simple assignment of contract to the new buyer and that was it I was done.
But, to get back to your point you are right most wholesaler get one deal and think this is going to be their big payday and leave no room for the buyer. Then when they cant find a buyer because there is no profit they use some BS clause to get out and then the owner is pissed.
@Randy Miller you are totally correct on what most wholesalers are doing in terms of profit. But like @Nikolas Ferreira said, there are other ways. There are few wholesalers that are legit and understand that the investor needs to have room to make a profit. Problem is they find deals and have already a handful of investors lined up that buy everything they can find. So very rarely you see them advertising their deals 'cause all they do is pick up the phone and have a buyer in 15 minutes.
I'm sure Nik can elaborate on what he is doing via private message.
John Hixon and Nikolas Ferreira I am very interested in hearing more about your wholesale deals. I have met with two large wholesalers in Houston and I agree with everyone's synopsis. Their is very little room in any of the deals and If you are doing HML, their is absolutely NO room in the deals considering the risk involved.