Due Diligence on a wholesaler

[Carsten Mortensen]

I have bought all of my deals with an agent through the MLS. You see all the time that the best deals come off market, and wholesalers find the best deals. You also see a plethora of cautionary tales "Do your DD on a wholesaler" What does that mean to you, what are good questions to ask a wholesaler?

[Steve K.]

Wholesale deals are not actually "off market". They are just a different market than the MLS. Most deals are still being marketed to multiple buyers. In fact many properties being shopped around by wholesalers are actually just expired MLS listings (properties that failed to sell on the MLS) or active MLS listings under contract by a wholesaler. True off market deals are ones that you find yourself, direct from the seller without a wholesaler or any other middle person involved.

But to answer your question on how to do DD on a wholesaler/ what to ask a wholesaler: You have to do your DD on the property itself. The wholesaler won't disclose any issues that the property has that could prevent them from getting paid. Always run your own numbers on everything, just like when buying on the MLS or directly from a seller. You have to do your own due diligence because once the deal closes, you're on your own.