How to screen a wholesaler

Question

Hey guys, there are a lot of wholesalers in the New Jersey area. Does anyone have any advice on how to quickly screen the people with actual contracts vs.the people that are wholesaling someone elses wholesale deal?

Anthony Aiello · Answer

Great question Ronny, I usually search the address/street name on criagslist and other sites. Most of the time if it’s being wholesaled by more than one person than it is being wholesaled by every wholesaler - easy to find out. I also ask my contact if they are the contract holder or if they are “co-wholesaling it”.

Though, the biggest tell is when you ask for access information or if they have actually been to the property and they don’t have a good answer.

I would love to see other’s input on this.

John K. · Answer

@Ronny Tiburcio

* Ask them to actually see a copy of the contract they have with the seller, then confirm the seller listed, is actually the owner. There should be no valid reason to object to this, as they should know the ways to protect themselves. Sometimes you can trip up the daisy chain, by just asking who the owner of record is.

* Validate their numbers. The biggest complaint is the wholesalers are creating their own numbers. If their numbers come in close to what you see, this should begin to build trust for you. As far as the repairs, there should be at least written estimates of the major expenses. I would not put much stock in overall renovation numbers, as there are many factors involved on whom gets what pricing.

* As previously suggested, confirm the property is not currently listed.

* Ask them for proof of previously closed deals, this can be actual HUD statements if there were double closes or copies of Assignment agreements.

*As suggested, ask them if they have visited the property. If you have pictures of the property, quiz them on items that are hard to determine from a picture. Are those hardwood floors or laminate? Is that a cast iron tub or steel tub? Unless the pictures are of high quality, it can be difficult to tell the difference, from just a picture. It's not important that you know yourself, you're gauging how they answer. If they know the answer because they have been there, their response will be almost immediately. If they pause, it's because they are trying to remember a conversation or they are looking at the picture, themselves.

*After all of that, just ask yourself one thing, Does it pass the smell test?

John

Caleb Heimsoth · Answer

@Ronny Tiburcio

Anytime I deal with a wholesaler I ask:  1.  Can I see the original contract, you have with the seller?

2.  Can I do due diligence without a non-refundable deposit?

That weeds out most people

Ronny Tiburcio · Answer

@John K. This is very helpful John. Definitely adding this to my screening process.

Ronny Tiburcio · Answer

@Anthony Aiello Thanks for the feedback and suggestions. I will definitely start asking wholesalers if they have been out to the property to weed out the daisy chainers.

Ronny Tiburcio · Answer

@Natalie Schanne thanks for the advice and I agree that a deal is a deal. My only concern with daisy chainers. I am all for wholesalers getting people inolved. My issue is when someone acts like they have a contract and they dont.

Natalie Schanne · Answer

@Ronny Tiburcio - My question for you is... why does it matter? If you get a deal sent to you where the numbers work, why do you care if multiple parties are getting paid? Do you think you are more likely to negotiate for a cheaper deal from the main contract holder? Are you assuming that if the main guy is under contract for 200 and asking for 220 then the second wholesaler will ask for 225 vs the deal still selling for 220 with the first guy taking 15k profit and the second taking 5k profit for sending to buyers list? All in all, seems better for investor buyers to pay a bit of $$ to as many property finders as possible so you get contacted first.

Btw - contact me if you want to wholesale any 1800+ sf houses in Mercer County but not in Trenton city. Cheers.

Ronny Tiburcio · Answer

sounds good. We are always looking for people to work with. I'll send you a message.

Evan Gross · Answer

Hi Ronny I’m a new wholesaler looking to help investors find properties. I’m out of Mercer County. It would be great to connect with you and anyone else looking for discounted properties.

Evan

How to screen a wholesaler

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