Why Did My Wholesaler Pass Up On This Deal?

Question

Hello all!

I am currently making connections with wholesalers in my local area. Everything is going great so far but I have an interesting question that I have come across.

Some of the wholesalers in my area are also investors. Obviously the deals they wholesale aren't right for them for one reason or another.

My question is this: Is it considered professional to ask a wholesaler/investor why they are passing up on a deal themselves or is it bad form? Obviously I am responsible for my own due diligence in these transactions, but I want to understand why something wasn't right for them. Did they discover some horrible issue that they didn't want to deal with? Or is this just in the wrong location?

Would love to hear the opinions on this!

Nik Corbaxhi · Answer

@Nathan Faucett, while you are developing trust, there is no reason for it to be seen as "I don't trust you", especially if you spin it in the context of:

"hey I have have been watching you work on these and I am truly impressed with how you are handling the process. I am trying to learn and grow my knowledge and experience in the field and I could really benefit from some wisdom from people that have proven themselves in this field, like yourself. If you don't mind me asking, I am curious to know how you evaluate properties to make the decision of what is to keep as an investor vs sell?"

While empowering the wholesaler, he feels obliged to tell you and share some of what he looks for on whats a good deal vs not, especially if you praise his skills and abilities. Although he might not tell you straight up what the issue or why a particular property does not work for him, you can read through the lines as he will most likely explain in general what he looks for when evaluating what to keep vs sell. The chances of why he is letting go that property is most likely one of those reasons.

Nik Corbaxhi · Answer

@Nathan Faucett, it is an interesting question and it is absolutely a legitimate concern. There is nothing unprofessional about asking why they passed on the deal, especially if they are also investors. It could be as simple as the return was not worth it to them, but might be to you. I think it is very important to build relationships with these wholesalers over time, to a point where if something is wrong with a property you would want them to disclose with you. In the contrary, they have to look out for themselves and will not disclose any major issues with you, strictly because they want to just get rid of the problem.

Nathan Faucett · Answer

@Nik Corbaxhi That is an excellent spin and a great way to think about that. I'll definitely take that approach when asking this question in the future.

Nathan Faucett · Answer

@Nik Corbaxhi thanks for that reply. My thought is that it's one of those things that you have to verify on your own anyways.

So is asking, which I think has the possibility of communicating "I don't trust you", worth it? Or this is an expected question that should be asked every time until you build up a relationship of trust.

It's one of those things, do I trust until someone gives me a reason not to, or do I not trust them until their track record proves that I can?