Wholesaling - what a bunch of scammers
Flipper/Rehabber · Los Angeles, CA · Member since 2019 · 7 posts · 6 votes
I recently got turned on to the concept of real estate wholesaling- and wow never have a encountered a bigger bunch of scoundrels. Everyone person in this so called business is a self proclaimed ‘guru’ trying to sell you their snake oil system of how to steal people’s houses out from under them. Disgusting and sad.
Define "stealing". If a willing buyer and a willing seller agree on the price, and no one misrepresents that facts of the deal, and everyone is of sound mental capacity and not acting under duress, is that stealing even if the price is below what the Buyer can sell it for?
I don't do much wholesaling (actually "wholetaling" because I actually close the deal vs. flip a contract) these days, but when I did, I typically bought for 30-40% below what I could turn around and sell it for in a week or two. The reason I was able to do this is I had cash in hand to close that day and I was willing to go thru the effort to develop a list of buyers. Had the owner of the property been willing and able to develop a list of buyers, maybe they could have sold for the same price I did. But they were not willing or able to do that.
I agree that most wholesalers don't know what they're doing and/or use high pressure tactics, and those should not be allowed. But for the legit ones who make a genuine offer and are able to close the deal or flip the contract on time, I see no problem as long as no one is taken advance of, as defined in my first paragraph.
Wait till you get a bunch of rentals together and then these nickle farmers start nonstop spamming you with voicemail, SMS and robodialed recordings, and fill your mailbox up with postcards they're too shady to even put their last name on.
Shows how clueless they are that they're targeting me as a distressed seller and not an active and easily found buyer and rehabber....
Amen brother. Pesky rascals bug me near daily. Especially when they outsource the cold calling to someone that doesn't even know if there is a structure on the property. There is no need for them. If a sellers' property is in good condition, use a licensed realtor or FSBO. If the property is in poor condition, use an auctioneer or FSBO. I can hardly think of a less value add occupation than a whole seller.
As a seller what does it matter whether or not the wholesaler is the one who actually buys the property or if he/she assigns it? As long as it closes on the date listed on the contract.
So how many wholesalers have the means to close if they cant assign the contract? Therein lies the problem. If you commit close with your funds no matter what, its a different thing. But that really isn't the business model is it?
As a seller what does it matter whether or not the wholesaler is the one who actually buys the property or if he/she assigns it? As long as it closes on the date listed on the contract. Yes, there are certainly some unethical wholesalers but the same is said about flippers who cut corners during rehabs and agents who hide disclosures. True, the mailers and phone calls get old but I also get mailers from Walmart, phone calls because my auto warranty is expiring, and emails from that prince in Africa who is sending me millions. Point is, all businesses have to market and all have some unethical entities.
Your argument is basically "all these other scammers are scamming so why is illegal marketing from wholesalers a big deal?"
The auto warranty calls are a notorious scam and their unsolicited calls (usually with forged caller ID) is completely illegal. I hopefully don't have to mention the nigerian 419 fraudsters mostly prey on the elderly, desperate or uneducated, which is an interesting and apt comparison to many wholesalers.
I think in all my years receiving wholesaler spam there is ONE GUY in my entire market that actually uses his real full name on his mailings.
ok, many wholesalers are unethical in the way they operate, also many are not. At the same time many landlords and other types of real estate investors are unethical, but also many are not. To say “all” wholesalers is just not correct. To those who get offended off a phone call or piece of mail, then you my friend are not a happy person. We all get in the real estate “game” for only a few key reasons. One of those reasons is to change his/hers life and their families life. If someone sees wholesaling as maybe something they could do, then who are you to tell them they can’t or shouldn’t do it?? Why, because you don’t like it? I love and support all types of investing, and I see the positives and negatives in them all. It is important to know that you will not last long or be fully 100% successful in any business with having the attitude of talking down on others. If you wholesale correctly, you should be best friends with all investors. Wholesalers help sellers get out of the nightmares they are in, and then get a great deal to a investor. And for that they make a profit. Now that does not sound like the most horrible thing lol does it ??? To all that get mad or offended from this post. Go read the “Go Giver”.
I have been following a lot of wholesaling groups and watching a lot of videos....and I also took that rip off $19 class by Wrein. From what I see it seems to be quite a shady group. I see posts by most on FB who seem really clueless, asking basic questions that if they just did a bit of homework they can answer their own question. That said there are shady people in every business. I just saw a real estate agent/neighbor in my hood pretty much steal a house form a single mom which was listed for $379K and bought it for $250K. So, that does seem quite shady coming from a licensed RE agent when that single mom could have def gotten more for it. I see things with agents that are legal "referrals" but then that referral agent can also bring in buyers to the the deal and they double their commission on just the referral. So while wholesaling seems shady I can say there are shady RE agents out there too. Never disclosing issues with homes and pass those onto the next buyer. Bought 2 houses in my life and both agents never disclosed major issues. So, you have to really find the honest people in every business and just keep doing business with them. That said, when you are making deals and $ from someone else, it's always a slippery slope.
@Bonnie Jones
There are investors that do the same thing. I have a friend that just bought a 10k house on the east side that was condemned and he’s going to put 20k in and sell for 100k. Buying a house at discount isn’t shady or theft. It’s the whole aim of real estate.
Thank you! A comment that makes sense. What is the difference!?