On several Wholesaler lists as a buyer but prices too high

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On several Wholesaler lists as a buyer but prices too high

Lisa Maturo
Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes

So I'm fairly new to investing as far as getting on wholesaler lists as a buyer. But I'm finding that NONE of them seem to really have any decent deals and they all seem to be taking a whole lot more than a $10,000-$15,000 fee on the deal.   Just curious.  It is starting to look like the only way I will find a fix and flip deal with enough of a margin is to find the deal myself, versus buying through these wholesalers.  Is this typical in Arizona or maybe everywhere?  These are things they don't seem to tell you in the real estate books and podcasts....the little details like how Wholesalers are taking a big rip of the profit in most cases. Help me understand this better, I hope I'm wrong! :-)

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Lisa Maturo:

So my other lament (sorry if I sound like a whiner) is that the Meet Ups i've gone to so far all turned out to be hidden sales funnels for real estate education programs or gurus. Even my local AZ REI club was promoting a couple guru workshops and I didn't get much out of attending. I'll keep persisting, as I'm sure I just havent found the right meetup or the right REI club, etc, but I'm a little frustrated at this point in time as I keep hitting walls.

agree on the meet ups.. those in Portland are lucky to have Rarebird although its a modest fee to join they do great content with no pitching or guru sales funnels.  Meetups can be OK but i dont do those anymore as they are mainly social hour.. but for those trying to net work maybe you create a meetup of your own.. 

here is were we get our deals.

1. MLS

2. courthouse steps

3. the national auction companies. 

4. word of mouth

5. JV partners that bring us deals for a peace of the action..

6. and way down the list wholesalers.. 

if your goal is to buy and hold then its a long game you dont need the very best deal possible.. and normally if you are buying for rental purposes you can beat most anyone on the auction sites other than those looking to owner occ.  plus the auctions keep the no money wholesalers out of the picture.

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  • Account Closed
    Real Estate Agent · Tucson, AZ · Member since 2018 · 112 posts · 73 votes
    7y

    Wholesalers tend to give the best deals to their best clients. The emails tend to be C level and below deals. Your best bet is to find an agent who is actively working with investors to make those deals happen and build a relationship with them. As easy as the books make it sound no one is giving away great deals to people they don't know. 

    0Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    @Account Closed thanks, that makes sense.  I kinda figured I was on the outside of the inner circle deals.  Hard to break into the inside I'm finding. Maybe I need to wave around some cash. :-)  I have been trying to develop relationships with a few agents too, but perhaps I need to work harder on that angle. I wasn't finding deals through the agents either. I do feel like I missed a memo somewhere on how this all works. Thanks for the feedback.

    0Reply
  • Donald Kellogg
    Lender · Phoenix, AZ · Member since 2018 · 108 posts · 41 votes
    7y

    Lisa I have a KA agent if needed. I donfix n flips with him. 

    0Reply
  • David Kirkland
    Mesa, AZ · Member since 2018 · 25 posts · 4 votes
    7y

    I'm interested @Donald Kellogg.

    DM your referral.

    0Reply
  • Chris Tabanico
    Rental Property Investor · Arizona/Ohio/Michigan · Member since 2018 · 51 posts · 36 votes
    7y

    Yes - Building relationships is the best way to get the deals. Then do repeat business and it will be much smoother. Real estate meetups are the best way to do this. A few steak dinners also go a long way too ;) 

    Good luck! 

    1Reply
  • Mark Sewell
    Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
    7y
    Originally posted by @Lisa Maturo:

    So I'm fairly new to investing as far as getting on wholesaler lists as a buyer. But I'm finding that NONE of them seem to really have any decent deals and they all seem to be taking a whole lot more than a $10,000-$15,000 fee on the deal.   Just curious.  It is starting to look like the only way I will find a fix and flip deal with enough of a margin is to find the deal myself, versus buying through these wholesalers.  Is this typical in Arizona or maybe everywhere?  These are things they don't seem to tell you in the real estate books and podcasts....the little details like how Wholesalers are taking a big rip of the profit in most cases. Help me understand this better, I hope I'm wrong! :-)

    You are not wrong.  Getting on a list is one thing.  Every now and again I see something that looks like it might not be that bad, but honestly I don't even pay attention to them anymore. 

    I am of the opinion that good wholesalers have a handful of 'go-to' buyers that get the goods before anything ever gets blasted out.  The fact that a deal ever gets blasted out to a list probably means none of their savvy buyers were interested.  Wholesaling is very hard to do, and even harder to do it right.

    2Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    @Donald Kellogg yes please!  And thank you very much.

    @Mark Sewell exactly, I was thinking the same thing. By the time it gets blasted out it's been tossed aside by the other buyers and I'm left wondering why...   Feels hard to get in the game.

    0Reply
  • Mark Sewell
    Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
    7y

    You don't need a wholesaler to find a deal.  Find a real investor and see where they are sourcing deals, and how they are structuring them. 

    Just got to network, as @Chris Tabanico suggests.  Find real people out there doing deals.  You will find them here on BP, or at local meet ups. 

    Go open a self-directed IRA and learn from those folks.

    Ignore the hashtag cowboys on social media, just trying to hype themselves for SEO purposes.  Those guys are clowns.

    2Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    So my other lament (sorry if I sound like a whiner) is that the Meet Ups i've gone to so far all turned out to be hidden sales funnels for real estate education programs or gurus. Even my local AZ REI club was promoting a couple guru workshops and I didn't get much out of attending. I'll keep persisting, as I'm sure I just havent found the right meetup or the right REI club, etc, but I'm a little frustrated at this point in time as I keep hitting walls.

    1Reply
  • Jeff C.
    Real Estate Broker · Bakersfield, CA · Member since 2018 · 269 posts · 597 votes
    7y

    It seems like everyone on earth is trying to be a wholesaler right now, and 99% of them have never done any property investing and have no idea what constitutes a deal. They don't know how to calculate ARV.. they don't know how to calculate repair costs.. and they don't understand the holding costs and frictional costs involved with reselling a property.

    3Reply
  • Von Mark
    Investor · Phoenix, AZ · Member since 2012 · 4 posts · 1 vote
    7y

    Hi. I'm one of those 'local' wholesalers, Maricopa County. And yes, good, solid deals from other investors is relatively a joke, almost an oxymoron, which I learned a long time ago. Hence I find my own deals using various sources, (and resources), and put together my own team years ago. Of course, we have our core cash investors to wholesale to who do get those great deals, unless we decide to flip the properties ourselves, case by case. (And good luck with those local "real estate clubs", smh...) I'm always looking to partner with those who are dedicated to doing what it takes to close these leads, i.e. "boots on the ground" mentality, newbie or seasoned investors. If interested, let me know. (Note: I'm not sure what the BP rules are for exchanging personal information.)

    1Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    @Von Mark thanks for the response, I sent you a message/connection request. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Lisa Maturo:

    So my other lament (sorry if I sound like a whiner) is that the Meet Ups i've gone to so far all turned out to be hidden sales funnels for real estate education programs or gurus. Even my local AZ REI club was promoting a couple guru workshops and I didn't get much out of attending. I'll keep persisting, as I'm sure I just havent found the right meetup or the right REI club, etc, but I'm a little frustrated at this point in time as I keep hitting walls.

    agree on the meet ups.. those in Portland are lucky to have Rarebird although its a modest fee to join they do great content with no pitching or guru sales funnels.  Meetups can be OK but i dont do those anymore as they are mainly social hour.. but for those trying to net work maybe you create a meetup of your own.. 

    here is were we get our deals.

    1. MLS

    2. courthouse steps

    3. the national auction companies. 

    4. word of mouth

    5. JV partners that bring us deals for a peace of the action..

    6. and way down the list wholesalers.. 

    if your goal is to buy and hold then its a long game you dont need the very best deal possible.. and normally if you are buying for rental purposes you can beat most anyone on the auction sites other than those looking to owner occ.  plus the auctions keep the no money wholesalers out of the picture.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    @Lisa Maturo The best ways to find deals is to hit the streets . Put word out to family , friends , co workers . You have to be there first , ready with a contract . 

    3Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    @Jay Hinrichs thanks for the feedback,  I've been eyeing auctions online and in person as well, attended one at the courthouse recently just to get a feel for how it works.  Tried to purchase one on auction.com and found that experience confusing and crazy but learned a lot about how those work. Didn't realize that auction.com staff actually bids up on it to encourage bidding wars and pushing the price up closer to the reserve. Now I know.  Looks like a lot of opportunities though if patience is your best friend.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Lisa Maturo:

    @Jay Hinrichs thanks for the feedback,  I've been eyeing auctions online and in person as well, attended one at the courthouse recently just to get a feel for how it works.  Tried to purchase one on auction.com and found that experience confusing and crazy but learned a lot about how those work. Didn't realize that auction.com staff actually bids up on it to encourage bidding wars and pushing the price up closer to the reserve. Now I know.  Looks like a lot of opportunities though if patience is your best friend.

    Auction sites take work no doubt but no different than weeding through the beginner wholesalers that have no clue as well.

    with auction sites and court house steps you just have to hold your ground..  many times the props don't sell ( auction dot com) and come back around a month or two later at a better price..  But at least your in control..   Court house is pretty cut and dry and there are bidding services were your at.. that will do most of the heavy lifting for you.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    I also want to mention that despite my frustration of many meetups being sales funnels for other programs/REI education (mostly I just disliked the not knowing prior to attending) I don't mean to poo poo on mentors and education programs. In fact, I recently bought one through Clever Investor which is in my area (Your First Flip) and I gotta say, it is excellent so far with a lot of detailed information, usable forms, etc, so I'm impressed and feel it has been worth the investment. It wasn't very expensive either. I am not an affiliate or anything, just sharing my personal experience. I am not sure that I feel the need for a closer mentor relationship, as I feel pretty confident in just going out and doing it (already have a couple buy and hold rentals), just new to Fix and Flips and how wholesalers around town work with investors.

    I dove into learning all I could about REI after discovering Bigger Pockets several months ago, been devouring information. One of the messages I get a lot from podcasts, seminars and books is this idea of taking action. Get off the sidelines and pull the trigger, don't get caught in analysis paralysis. I get that, but I gotta say, I'm beginning to feel that there is nothing wrong with waiting to pounce either, and lying in wait for the right deal. Unless I find a really great deal, I'll just continue to watch and wait. Maybe a downturn will hit and then I'll pounce. For a while there I was feeling the pressure to make a move, take action, pull the trigger, find my first deal...because that is what I kept hearing and reading. Now....I'm in a mode of deep breaths, keep learning, lie in wait to pounce. I would caution new investors to resist the push messages out there to make your first deal....there is nothing wrong with taking your time, learning the gig and waiting for the right deal.

    1Reply
  • John Chapman
    Investor · Pullman, WA · Member since 2013 · 87 posts · 16 votes
    7y

    Is anyone having success with direct marketing to out of town rental property owners or other special situations--owners who are divorcing or owners behind on property taxes for example?  

    0Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    7y

    @Lisa Maturo, I am a Phx investor as well.  I had 9 properties (sfr) a year ago.  Today the number is 6.  I’ve sold my ‘dogs’, keeping the ones I have now thru the next downturn.  Which I will be here prior to the 2020 elections.

    I, too, have been to the rei meets.  Not a very positive experience for me.  I went to a ‘buy & hold’ meeting and was laughed at due to my business model (B+ prop, good schools).  Slumlording is not my style.  My way is ‘easy’, at least for me.

    Stack ca$h and wait.  I saw something earlier this month that the avg price per sq ft is about $185 in Phx.  By my calculations the number ‘should’ be closer to $140 a sq ft.  So, I believe, we need some pullback.

    3Reply
  • Bevla Reeves
    Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    7y

    @Lisa Maturo  You're not wrong Lisa! I always warn newbies that Wholesalers rarely leave any meat on the bones, that's why I don't buy from them anymore!

    Gone are the days where they only marked the deals up $5k-$15k.  Those days are NOT coming back! 

    I'm sure you've noticed with the market I've shown you here in AZ that you're likely going to have to adjust your expectations...you're eyes are not deceiving you, the market doesn't lie.

    ...yes, it's always cheaper to go directly to the seller (if you know what you're doing), but the Big Dogs will be fierce competition for you and will oftentimes beat you to the punch. ;)

    But that's not a reason to give up though, there's still money to be made!

    Good luck!!! ;)

    2Reply
  • Bevla Reeves
    Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    7y

    @Lisa Maturo ..." waiting to pounce" is a good idea as long as it's not fear in disguise...but only you can decide that! ;)

    0Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    Thanks for your feedback @Alan Grobmeier ,  I am liking that idea of stacking ca$h!

    @Bevla Reeves I appreciate your help while I learn and look, thank you for your assistance. 

    2Reply
  • Bevla Reeves
    Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    7y

    @Jeff C. that's because that's what the so-called "Gurus" teach newbies while ripping them off at those seminars!! ;))

    2Reply
  • Lisa Maturo
    OP
    Investor · Tempe, AZ · Member since 2018 · 41 posts · 17 votes
    7y

    So now I wonder who Wholesalers are primarily selling to (who is their typical buyer) if most savvy investors don't find their deals from Wholesalers?  Regular people just looking for a good deal for a house to live in ? Inexperienced investors who may not know they're paying too much?  Hmm.

    0Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    7y

    @Lisa Maturo, ever played musical chairs or hot potato?  ;-)

    1Reply
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