-Eliminates the work involved finding cheap properties
-Can be some great deals
-Great opportunity to build relationship and reliable funnel of deals
-More opportunity for margin than many MLS deals
-Usually good honest people
CONS:
-Many worth even less than wholesale price
-Most do not allow buyer protections
-Typically cannot have an inspection done
-Usually cash only w/ quick close
-Lots of bad actors. Especially since gurus started selling wholesaling courses.
-Seem to go hand in hand with plumbing/electrical issues and hoarders
-Usually not in appreciating neighborhoods
Buying a property off of a wholesaler can go either way, so in the end it is important in my opinion to know the individual you are working with. There are some wholesalers that I will not even bother to look at properties they send, whereas there are others who I start making calls to let my investors know before I even have time to load all the pictures. All comes down to finding a great group of wholesalers who consistently bring awesome deals to the table, and above all else are honest in their dealings.
There are some phenomenal wholesalers here on BiggerPockets all over the country -- when speaking with wholesalers in any particular area, my recommendation is always to ask for references of agents and investors that they have previously worked with and their contact info. Hearing firsthand how the deal went, what communication and negotiation was like, and whether or not they would purchase another deal (or if they have) from the wholesaler is an immense value. If they do not have references they may be new so tread lightly, and if they refuse to provide any references, this could mean they burn bridges on each deal and is a red flag.
-Eliminates the work involved finding cheap properties
-Can be some great deals
-Great opportunity to build relationship and reliable funnel of deals
-More opportunity for margin than many MLS deals
-Usually good honest people
CONS:
-Many worth even less than wholesale price
-Most do not allow buyer protections
-Typically cannot have an inspection done
-Usually cash only w/ quick close
-Lots of bad actors. Especially since gurus started selling wholesaling courses.
-Seem to go hand in hand with plumbing/electrical issues and hoarders
-Usually not in appreciating neighborhoods
Buying a property off of a wholesaler can go either way, so in the end it is important in my opinion to know the individual you are working with. There are some wholesalers that I will not even bother to look at properties they send, whereas there are others who I start making calls to let my investors know before I even have time to load all the pictures. All comes down to finding a great group of wholesalers who consistently bring awesome deals to the table, and above all else are honest in their dealings.
There are some phenomenal wholesalers here on BiggerPockets all over the country -- when speaking with wholesalers in any particular area, my recommendation is always to ask for references of agents and investors that they have previously worked with and their contact info. Hearing firsthand how the deal went, what communication and negotiation was like, and whether or not they would purchase another deal (or if they have) from the wholesaler is an immense value. If they do not have references they may be new so tread lightly, and if they refuse to provide any references, this could mean they burn bridges on each deal and is a red flag.
As for finding wholesalers, I have actually gone to craigslist to look at real estate. Less likely lately, but sometimes wholesalers use this as a buyer list builder, or a way to ditch a dog deal. Chances are the deal they put on craigslist is junk, but it is a connection to get on their list, in case they come up with a decent one later.
I also search "We buy houses (Insert area here)" and other variations of that. Go to those websites and usually they have a section to sign up for their buyers list.
If you own properties in that area, you likely get mailers from people looking to buy your house. I call most of them and tell them I am not selling but I want to be on their buyers list. Sometimes they are looking for stuff for themself and not wholesaling, but most of the time they are happy to put me on their buyer list.