Why is everyone so averse to wholesaling?

Question

I don’t understand it; I’ve been in the title business for a few years now, and decided I wanted to branch out and do a wholesaling deal. I spoke to my mentor at the time, and he said “sure, go ahead and do it!” So I did. Did some searching, found a property under market value, called a friend of mine who’s an attorney who had a buyer, made an appointment to see the house, and after some back and forth negotiating, we had it under contract. I then assigned it with no problem, scheduled a closing, and boom, $10,000. What’s with the blogs and blogs of “10 reasons why wholesaling doesn’t work” nonsense? Of course it does! I just did one!

Bill B. · Answer

Like @Brent Coombs said:

90-95% of wholesalers couldn’t close a $50,000 deal if they couldn’t find a buyer. So they look a seller in the eye and say “I will buy your house...” then they go looking for a real buyer. And if they can’t find one after 30-60-90 days, they say sorry my partner doesn’t like this, or I found this problem. If they’re really “honest” they say sorry, you didn’t read my offer, I agreed to look for a real buyer for your property, now give me my earnest money back and goodbye.

Brent Coombs · Answer

@Dylan Gelbard, the question is: If your Buyer reneged, or you hadn't found a Buyer, would you have closed on the deal?  If the answer is yes, then you're right: no problem.

But, so often the answer is no, meaning the Seller is left in the lurch. (For shame!)

So tell us, will you honor every Contract?  Congrats on your first success.  Cheers...

Kyle J. · Answer

@Dylan Gelbard I have no issue with wholesalers.  I have been the end buyer in wholesale deals, and the private lender to the end buyer.  So I'm very familiar with the process.  It may be as simple as you described, but it's not as easy as that.  If it were, everyone would be doing it (not just trying to do it).

In my experience, most wholesalers struggle in one of three areas:

#1 - Trying to find deals

#2 - Trying to find end buyers

#3 - Trying to find one or both of the above consistently

Now, you've managed to do #1 and #2, which is actually a LOT farther than most people trying to be wholesalers get.  So congrats for that.  Seriously.

However, before you celebrate too hard, re-read the last sentence of your post...you just did one.  Most people who are trying to become wholesalers are trying to make a job out of it and want/need consistent income so they can supplement (or even replace) their W2 income.  One deal is a good start, but it's nowhere near enough to do that.  It's a bit like saying "I don't understand why playing in the Major Leagues is so hard. I just hit a baseball."

By no means am I trying to diminish your success with this one deal, because - like I said - you've done a lot more than most who try to get started.  But now it's time to focus on #3 on my list above.

Best of luck to you.

Hai Loc · Answer

@Dylan Gelbard

As mentioned by Bill 90-95% are not successful because they picked it up from a YouTube video or Facebook forum or $300 wanna be weekend crash course and just out there to make a quick buck when they know Jack squat about real estate..

I would say the 5-10% are ones who are familiar with real estate, business savvy who can work with a team of professionals, or just straight up know how to use available tools online to appraise properties..

If you cannot figure out how much the value is and potentially is worth I don't see how you can be successful in wholesaling..

You need to know when it's a good deal or the selling is being ridiculous and just walk away..

You cannot be hungry and think you can make every deal work.. you are absolutely screwing the seller.. and I feel bad for those seller how got taken advantage of..

I think you can be successful when having proper lead generation campaigns and proper systems and team in place..

I know two very successful wholesalers and they have a licensed agent on their team..

I am having thoughts on doing it myself

Why is everyone so averse to wholesaling?

Most Popular Reply