How to screen wholesalers

Question

I am looking at apartments, 5m or less. Been looking in Georgia, Florida, Indiana and Oklahoma City. I have been connecting with "wholesalers", however it sure is challenging weeding out the not so good ones. Any advice, or great questions to ask to screen them?

Kim Meredith Hampton · Answer

@Ben Balsbaugh I have to ask, why would you be looking for wholesalers for multi family? I only use them for SF or maybe a duplex, triplex etc…

Create relationships with multi family commercial agents. Let them know how much money you have, experience with multi family,  and are you preapproved?

Eliott Elias · Answer

Ask for referrals and look at the wholesalers contract with the seller.

Alex Ramirez · Answer

@Ben Balsbaugh how are you? I personally bought properties from wholesalers and I have also done wholesaling for commercial mtf. The way you can determine whether a wholesaler is good is by the way they underwrite the properties. Example…. If the wholesaler is not including really easy stuff such as vacancy (10%) and expenses at at least 40% for a property then that’s probably not a good wholesaler. If they are including these and are also estimating rents conservatively and you underwrite the deal and you are comfortable with that, then I will call them and ask them about the property and about their experience. If they seem knowledgeable and have the experience, most likely that’s a good wholesaler.

Nick C. · Answer

If a wholesaler has a good deal they're good enough to work with. What else matters?

Will Fraser · Answer

Good gurdy yes!  That's the truth!  It's hard enough to get to know a market well when you're look in 4 different states, then add on the least regulated sect of real estate agents out there and you've got a quagmire on your hands!

When getting into a market I'd work with a rockstar agent or PM and get to know the market before hopping into bed with the big whOle sailors.

Justin Moy · Answer

Wholesaling just like most things in REI is about the relationship, if they have a reputation in the area to protect that's what I like to see.

Check the PSA they have with the owner, and conduct your own due diligence and underwriting despite how great of a deal the wholesaler is telling you it is.

Mary Beatty · Answer

Hi Ben!  There are apartment units 5m or less that are on market that may work for your portfolio.  I've work with out of state investors and am an investor myself.  I would be glad to set up a free search for you.  I'll send you a pm so we can connect.

Jasmin Hernandez · Answer

I agree with Kim, wholesalers typically do not have access to multifamily with more units than the typical duplex, or triplex. Great websites for looking at multifamily properties are Crexi and Loopnet. You can build relationships with agents by looking at the listing agents on the properties and reaching out to them, letting them know that you are not only interested in the listed property, but also any off-market or up and coming deals they may have. Ask to be placed on their email lists of new properties so you can be the first to know when properties become available.

Henry Lazerow · Answer

In my experience the very few decent wholesale deals are sold internally, if you are in a depressed market the deal volume they get is higher but in hot markets very rare. The wholesalers you see posting deals online I have not seen any good ones, often priced worse then can negotiate on mls even.

How to screen wholesalers

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