Wholesaling in NY: is it worth it?

13 Replies

Hey all! Wondering your experiences as investors or wholesalers in NY. I'm in upstate NY, not the city. I'm just beginning but am planning on starting in PA (williamsport and Scanton) just for now. I keep hearing how there's not much money for wholesalers in NY and how the strict laws make it a huge headache. What do you guys think??

Hello @Jasmine Russell ,

You may have more opportunities in PA. While I am not as familiar with wholesaling in Upstate NY, many who look to start wholesaling in NYC end up moving onto something entirely different OR get licensed as Realtors. Some of the reasons are the competitiveness of this market (wholesalers, cash buyers & Realtors all contacting the same leads) and the fact that we're in such a crazy sellers market where folks can get even more than market value for their property. Tough to sell someone on the idea of selling their property below market value when so much money is being thrown around here. 

Since Realtors use similar marketing strategies to get in front of sellers (mailers, cold calling, door-knocking, SEO marketing, FB ads, etc) as do wholesalers, prospective wholesalers see the value in being licensed to give sellers multiple selling options. 

Ultimately, the route you choose should align with your long-term goals so I'd definitely gather as much info as possible on NY & PA wholesaling. Happy to share more info on the licensing route if you decide to entertain that idea.

Best of luck to you moving forward!

Abel

@Abel Curiel I see your point. It is a sellers market where I'm at. It's ridiculous! I think it would be harder and I would have to find sellers that have property here that are out of state or in a situation where they just do not care. Question, do I have to use an attorney instead of a title company? I've gotten mixed info on this. I understand the market is tougher to wholesale in but what I've mostly heard is that people do not want to wholesale due to the laws being more strict. Is this true? For what I've researched it's not much different than other states in that. Am I missing something? Yes I definitely want to have more info. For some insight, I am not looking to wholesale as a career. I am looking to build some income for fix and flips and short term rentals. At that point I would be done wholesaling.

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The real question is why do you want to wholesale? It's like the redheaded stepchild of real investing and is no way a stepping stone to investing. There are some good wholesalers who do it the right way and are fair, but very, very few. Just saying you are a wholesaler makes most of us immediately think negatively. NY is a definite no although the upstate market is very good right now for investors. There are some good wholesalers in PA and a healthy wholesaling buy pool, but it's very hard to get traction and the ones doing well in Philly are backed and national and the smaller ones are well backed as well.

@Jasmine Russell you will not get money to invest from wholesaling. The percentage that scale that way are very few and far in between and if you have little saved and 5 kids to spend the good stuff on, you won't have the marketing budget that allows wholesalers to make the good money. Also, to be a good wholesaler, you need to know repair costs for every part of the property and you need access to reliable after-repair values so that when you do lock one up, you are able to present it to investors with credible numbers, which is where most fail.

Originally posted by @Jonathan Greene :

The real question is why do you want to wholesale? It's like the redheaded stepchild of real investing and is no way a stepping stone to investing. There are some good wholesalers who do it the right way and are fair, but very, very few. Just saying you are a wholesaler makes most of us immediately think negatively. NY is a definite no although the upstate market is very good right now for investors. There are some good wholesalers in PA and a healthy wholesaling buy pool, but it's very hard to get traction and the ones doing well in Philly are backed and national and the smaller ones are well backed as well.

when you say backed  I assume you men monster budgets for marketing that it takes you know the 20 to 50k a month kind of budget.  I have a client in Maryland who finally saw the light..  what a good backer will do for them.. And get out of the rat race of assigning contracts..  for each deal they could make an 3 to 7k assignment.. with the proper backing they are making 20 to 30k per same lead by actually being a real real estate investor. what happens in many of these wholesaling / assigning contract hot spots is the competition as you state is fierce and people going around them  or they cant get it closed in time because they have no money etc.   I think BP coined this wholetailing.  actually own it and then do the minimal work to pretty it up then resell it while you OWN it so no one can take it from you..  Plus since there profit has gone from average of 5k to 20 to 30k per deal they only need to do 1 to make the same amount as in the past they had to close 4 or 5 transactions..  Lot less work same money or do what this team is doing and go big guns and the next thing you know they are making much bigger profits that CAN lead to buy and hold I just funded two Buy and holds this week for the same company..  Its pretty cool.. but I could talk to 50 wholesalers out there and 49 would never take me up on it.. they are brain washed  LOL

@Jay Hinrichs I'm a little confused but intrigued. What are many wholesalers not taking you up on? I have never heard of any wholesalers spending that much money on marketing. If I had the money to do that I wouldn't be wholesaling to begin with. I'm also confused on what it means to be "backed"

Originally posted by @Jasmine Russell :

@Jay Hinrichs I'm a little confused but intrigued. What are many wholesalers not taking you up on? I have never heard of any wholesalers spending that much money on marketing. If I had the money to do that I wouldn't be wholesaling to begin with. I'm also confused on what it means to be "backed"

many in real estate bring on a capital or money partner.. I think most do in fact.. can be another person your in partnership with it could be your parents grand parents other relative..

the big wholesalers that make what I consider a decent living IE 500k net to the owners plus a year doing this will spend that kind of money.

Plenty will spend a lot less and make from zero to 100 to 200k a year net..  that I have to assume is the majority of the wholesalers .  at least what I see in all the deals I fund in 7 markets..  

Originally posted by @Jasmine Russell :

Hey all! Wondering your experiences as investors or wholesalers in NY. I'm in upstate NY, not the city. I'm just beginning but am planning on starting in PA (williamsport and Scanton) just for now. I keep hearing how there's not much money for wholesalers in NY and how the strict laws make it a huge headache. What do you guys think??

 If you happen to find anything in the Cape Vincent area please feel free to send me a message 

Super interested in that area

Thank you 

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Originally posted by @Jasmine Russell :

@Abel Curiel I see your point. It is a sellers market where I'm at. It's ridiculous! I think it would be harder and I would have to find sellers that have property here that are out of state or in a situation where they just do not care. Question, do I have to use an attorney instead of a title company? I've gotten mixed info on this. I understand the market is tougher to wholesale in but what I've mostly heard is that people do not want to wholesale due to the laws being more strict. Is this true? For what I've researched it's not much different than other states in that. Am I missing something? Yes I definitely want to have more info. For some insight, I am not looking to wholesale as a career. I am looking to build some income for fix and flips and short term rentals. At that point I would be done wholesaling.

 Hey Jasmine,

Yes you do need an attorney in NY. The attorney can recommend a title company or you can find one yourself.

@Jonathan Greene hit the nail on the head with his replies. This is not the business to get into temporarily to save up for investing. You'll have to become an expert at finding and converting motivated sellers + an expert in analyzing deals (including construction and acquisition costs).

If you want to eventually get into buy & holds, I'd start there... you can start with a low-down-payment owner-occupied househack, multi-family or other rental property deal.

@Jay Hinrichs brought up a great point about partnerships if you are low on initial investment capital.

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