What is your opinion on wholesalers?

[Katlynn Teague]

Good morning BP,

I have a couple of questions this morning

-What is your opinion on wholesalers?

-Have you had a good experience when working with a wholesaler?

-What has been your biggest draw back from working with wholesalers, when purchasing properties to flip?

I am a licensed real estate agent who works at a national wholesale brokerage. I started this path to build capital so I can start purchasing my own properties to build a rental portfolio. As well as learn from the investors I work with, make connections in the industry and learn real estate investment from the inside out. My company has a five-week training course that teaches you all of the ins and outs of the wholesaling business. The training is intense, but the training also never stops and that is what makes me good at my job! 

However, I have many... "wholesalers" reach out to me who really do not have a clue in the world what they are doing. These people bring me daisy chained properties with inflated ARV's, laughable rehabs and obnoxious sales prices. All of this to say, that these kinds of wholesalers tarnish the reputation of the wholesalers who are in this business to help people on their path to financial freedom. I have seen many investors cringe at the word wholesale because they had such a bad experience with one in the past and officially write wholesalers off.

I absolutely love what I do, I love getting to meet people that started with nothing and were able to build an empire for themselves and their families. I love helping home owners who are on the verge of foreclosure pay off their debt to start over. Families who had a house fire and lost everything, being able to give them a fresh start. I also love helping people on their journey to financial freedom while helping them build that generational wealth. 

With that being said, What are your thoughts?

[Henry Clark]

My mother taught us to eat food even if from someone you don’t like.

Pick wholesalers who are in the geographical area you want.  Train them in the types of property you’re looking for.  Develop a fee based approach for them.   Tell them how you want deals Served up.  

[Bob Stevens]

Most are clueless; however, I do get about 20 a week sent to me in my market from them. Most no nothing about the property except for the photos they were sent, (photos are meaningless) They say but bob look at the ROI, again they are clueless, they do not even know how to determine the net cap and know nothing about the area,. So they are very useful you just need to know what you are doing.

   Also, all due respect I NEVER deal with realtors. I have done about 500 in my market and only used a realtor 10 years ago for a few.  I have found that most NOT ALL, realtors do not have a clue either. They show up at a house not knowing anything about it. How many deals do not close as they are off by 20 30 40k ( realtor fees). They all have the same line. " Multiple offers highest and best". I have to tell them what to offer. Just last year when I purchased my primary. Ask was 650 I said offer 450, Oh no , that's to low, you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner. Oh, ok I will do it. Sure, enough got it for 525k including the 15k golf membership, realtor made 15k for DOING ZERO work. All she did was get us in. Not a bad gig. 

So everyone needs to know their market, they should know exactly what to pay and where to buy. If they have to ask the realtor if this is a good deal they should not do the deal. Never leave that up to the wholesaler or the realtor,, know what you are doing. 

All the best 

[Katlynn Teague]

Quote from @Bob Stevens:

Moat are clueless, however I do get about 20 a week sent to me in my market from them. Most no nothing about the property except for the photos they were sent, (photos are meaningless) They say but bob look at the ROI, again they are clueless, they do not even know how to determine the net cap. So they are very useful you just need to know what you are doing.

   Also, all due respect I NEVER deal with realtors. I have done about 500 in my market and only used a realtor 10 years ago for a few.  I have found that most NOT ALL, realtors do not have a clue either. They show up at a house not knowing anything about it. How many deals do not close as they are off by 20 30 40k ( realtor fees). They all have the same line. " Multiple offers highest and best". I have to tell them what to offer. Just last year when I purchased my primary. Ask was 650 I said offer 450, Oh no , that's to low, you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner. Oh, ok I will do it. Sure, enough got it for 525k including the 15k golf membership, realtor made 15k for DOING ZERO work. All she did was get us in. Not a bad gig. So everyone needs to know their market, they should know exactly what to pay and where to buy. Never leave that up to the wholesaler or the realtor .. 

All the best 

 Bob, I am sorry to hear you had a bad experience with both a relator and wholesaler. There are good and bad fish in everyone pond. It's all about asking the right questions upfront and basing wether or not they are a good fit for you and what your objective is. Before you sign a contract to have a relator represent you make sure it is someone when your best intentions not just a friend of a friend. Same thing can be said with wholesalers, its a new fad that everyone wants to be a wholesaler. But not everyone can be, hopefully the ones tarnishing the image for the rest of us will be weeded out soon.
When I work with my buyers, I ask them questions to see if they would be a good fit for me not the other way around. I also don't represent my clients in the transaction of purchasing homes from our cooperate. But I can re-list for them on the backend. 

Having the understanding of your market is the most important piece of the puzzle, to know if a particular property is a deal or not!  

[Larry Turowski]

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

[Katlynn Teague]

Quote from @Henry Clark:

My mother taught us to eat food even if from someone you don’t like.

Pick wholesalers who are in the geographical area you want.  Train them in the types of property you’re looking for.  Develop a fee based approach for them.   Tell them how you want deals Served up.  

 Henry, I like that saying haha. My mother taught me the same thing. 

It's all about setting the expectation up front!

I have investors who come to me looking for properties, when I ask them what kind of property are you looking for, it's the response "as long as the number makes sense". Okay, so what numbers make sense to you, for this to be a deal you would consider? How do you calculate your numbers, what is your exit strategy and how much are you looking to make off the deal? 

It's all about asking the right questions!

[Katlynn Teague]

Quote from @Larry Turowski:

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

 Larry, thank you for taking the time to comment.

I agree with Bob as well. That said, to avoid getting yourself in a sticky situation with a shady wholesaler or realtor is asking the right questions upfront! 

[Scott E.]

-What is your opinion on wholesalers? - In general, they are annoying, inexperienced, and lazy. But they're not all bad. Unfortunately the bad ones just outweigh the good ones.

-Have you had a good experience when working with a wholesaler? - Yes. I have bought a couple of deals from wholesalers. And I've bought a few deals that I planned to rehab, but ended up flipping them through wholesalers as-is. Nowadays I'm in touch with 1 guy who works at the biggest wholesaling shop in town. He's great and is my point of contact for 95% of my wholesaling needs.

-What has been your biggest draw back from working with wholesalers, when purchasing properties to flip? - Literally 99 out of 100 properties that they send are garbage. They are not in my target area. They are sitting on a busy street. They back up to a big commercial complex. Or if the property does meet my criteria, it is way overpriced. But I keep paying attention for that 1 out of every 100 that's a good fit.

[Bob Stevens]

Quote from @Katlynn Teague:

Quote from @Bob Stevens:

Moat are clueless, however I do get about 20 a week sent to me in my market from them. Most no nothing about the property except for the photos they were sent, (photos are meaningless) They say but bob look at the ROI, again they are clueless, they do not even know how to determine the net cap. So they are very useful you just need to know what you are doing.

   Also, all due respect I NEVER deal with realtors. I have done about 500 in my market and only used a realtor 10 years ago for a few.  I have found that most NOT ALL, realtors do not have a clue either. They show up at a house not knowing anything about it. How many deals do not close as they are off by 20 30 40k ( realtor fees). They all have the same line. " Multiple offers highest and best". I have to tell them what to offer. Just last year when I purchased my primary. Ask was 650 I said offer 450, Oh no , that's to low, you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner. Oh, ok I will do it. Sure, enough got it for 525k including the 15k golf membership, realtor made 15k for DOING ZERO work. All she did was get us in. Not a bad gig. So everyone needs to know their market, they should know exactly what to pay and where to buy. Never leave that up to the wholesaler or the realtor .. 

All the best 

 Bob, I am sorry to hear you had a bad experience with both a relator and wholesaler. There are good and bad fish in everyone pond. It's all about asking the right questions upfront and basing wether or not they are a good fit for you and what your objective is. Before you sign a contract to have a relator represent you make sure it is someone when your best intentions not just a friend of a friend. Same thing can be said with wholesalers, its a new fad that everyone wants to be a wholesaler. But not everyone can be, hopefully the ones tarnishing the image for the rest of us will be weeded out soon.
When I work with my buyers, I ask them questions to see if they would be a good fit for me not the other way around. I also don't represent my clients in the transaction of purchasing homes from our cooperate. But I can re-list for them on the backend. 

Having the understanding of your market is the most important piece of the puzzle, to know if a particular property is a deal or not!  

 Its all fine. I just put 25 SF and an 18 unit under contract in the last two weeks and already have them in contract with buyers. Again, Wholesalers ARE useful, ( I never deal with realtors) just need to know what you are doing. 

Good luck, 

BTW sign an agreement with a realtor, never. I do all the work :) 

[Bob Stevens]

Quote from @Larry Turowski:

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

FSBO is the way EVERYONE should go. Both sides will get a better deal. I moved to Fl 3 weeks ago. I am going to rent on the beach till the end of year as I see a correction coming. In the meantime, I am putting in low offers, why not. Ask, 439K, offered 350k. Well IF there was not 25k in realtors' fees we would come to a win win deal in a day. At 430k seller net is about 400k. So if they were only asking 400k, they would accept 375k, I would buy it for that. But since the realtors want their 25k for doing really nothing. I found it, I know the market, I know what it will cost to update etc. the property just sits. Nobody wins,

All the best  

[Adam Macias]

Quote from @Henry Clark:

My mother taught us to eat food even if from someone you don’t like.

Pick wholesalers who are in the geographical area you want.  Train them in the types of property you’re looking for.  Develop a fee based approach for them.   Tell them how you want deals Served up.  

 The real question is, why don't you like wholesalers?

[Adam Macias]

Quote from @Bob Stevens:

Most are clueless; however, I do get about 20 a week sent to me in my market from them. Most no nothing about the property except for the photos they were sent, (photos are meaningless) They say but bob look at the ROI, again they are clueless, they do not even know how to determine the net cap and know nothing about the area,. So they are very useful you just need to know what you are doing.

   Also, all due respect I NEVER deal with realtors. I have done about 500 in my market and only used a realtor 10 years ago for a few.  I have found that most NOT ALL, realtors do not have a clue either. They show up at a house not knowing anything about it. How many deals do not close as they are off by 20 30 40k ( realtor fees). They all have the same line. " Multiple offers highest and best". I have to tell them what to offer. Just last year when I purchased my primary. Ask was 650 I said offer 450, Oh no , that's to low, you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner. Oh, ok I will do it. Sure, enough got it for 525k including the 15k golf membership, realtor made 15k for DOING ZERO work. All she did was get us in. Not a bad gig. 

So everyone needs to know their market, they should know exactly what to pay and where to buy. If they have to ask the realtor if this is a good deal they should not do the deal. Never leave that up to the wholesaler or the realtor,, know what you are doing. 

All the best 

 You can't go around the wholesaler and it's actually a very shady move. That's why contracts exist.

[Henry Clark]

Quote from @Adam Macias:

Quote from @Henry Clark:

My mother taught us to eat food even if from someone you don’t like.

Pick wholesalers who are in the geographical area you want.  Train them in the types of property you’re looking for.  Develop a fee based approach for them.   Tell them how you want deals Served up.  

 The real question is, why don't you like wholesalers?

 You must not have read what I posted if you asked that question. 

[Adam Macias]

Quote from @Henry Clark:

Quote from @Adam Macias:

Quote from @Henry Clark:

My mother taught us to eat food even if from someone you don’t like.

Pick wholesalers who are in the geographical area you want.  Train them in the types of property you’re looking for.  Develop a fee based approach for them.   Tell them how you want deals Served up.  

 The real question is, why don't you like wholesalers?

 You must not have read what I posted if you asked that question. 

 "My mother taught us to eat food even if from someone you don’t like.", what do you mean by "don't like"? lol It's not an abrasive question, just wondering why you used this exact phrasing to make a point.

[Bob Stevens]

Quote from @Adam Macias:

Quote from @Bob Stevens:

Most are clueless; however, I do get about 20 a week sent to me in my market from them. Most no nothing about the property except for the photos they were sent, (photos are meaningless) They say but bob look at the ROI, again they are clueless, they do not even know how to determine the net cap and know nothing about the area,. So they are very useful you just need to know what you are doing.

   Also, all due respect I NEVER deal with realtors. I have done about 500 in my market and only used a realtor 10 years ago for a few.  I have found that most NOT ALL, realtors do not have a clue either. They show up at a house not knowing anything about it. How many deals do not close as they are off by 20 30 40k ( realtor fees). They all have the same line. " Multiple offers highest and best". I have to tell them what to offer. Just last year when I purchased my primary. Ask was 650 I said offer 450, Oh no , that's to low, you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner. Oh, ok I will do it. Sure, enough got it for 525k including the 15k golf membership, realtor made 15k for DOING ZERO work. All she did was get us in. Not a bad gig. 

So everyone needs to know their market, they should know exactly what to pay and where to buy. If they have to ask the realtor if this is a good deal they should not do the deal. Never leave that up to the wholesaler or the realtor,, know what you are doing. 

All the best 

 You can't go around the wholesaler and it's actually a very shady move. That's why contracts exist.

 Who said anything about going around a wholesaler ? 

[Adam Macias]

Quote from @Bob Stevens:

Quote from @Adam Macias:

Quote from @Bob Stevens:

Most are clueless; however, I do get about 20 a week sent to me in my market from them. Most no nothing about the property except for the photos they were sent, (photos are meaningless) They say but bob look at the ROI, again they are clueless, they do not even know how to determine the net cap and know nothing about the area,. So they are very useful you just need to know what you are doing.

   Also, all due respect I NEVER deal with realtors. I have done about 500 in my market and only used a realtor 10 years ago for a few.  I have found that most NOT ALL, realtors do not have a clue either. They show up at a house not knowing anything about it. How many deals do not close as they are off by 20 30 40k ( realtor fees). They all have the same line. " Multiple offers highest and best". I have to tell them what to offer. Just last year when I purchased my primary. Ask was 650 I said offer 450, Oh no , that's to low, you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner. Oh, ok I will do it. Sure, enough got it for 525k including the 15k golf membership, realtor made 15k for DOING ZERO work. All she did was get us in. Not a bad gig. 

So everyone needs to know their market, they should know exactly what to pay and where to buy. If they have to ask the realtor if this is a good deal they should not do the deal. Never leave that up to the wholesaler or the realtor,, know what you are doing. 

All the best 

 You can't go around the wholesaler and it's actually a very shady move. That's why contracts exist.

 Who said anything about going around a wholesaler ? 

"you will piss off the seller, (EXACTLY what I want to do) I am not comfortable putting in that offer. I said Ok I will deal directly with the owner."
I'm talking in direct response to this sentence. Not saying you yourself have bad intent, but if anybody operates this way it's shady business. Contracts must be honored. Sellers can't take that contract and start bidding it to others... UNLESS it's assigned lol Anytime a buyer has tried that with me, I'm glad I warn the seller ahead of time saying buyers will do everything possible to try and convince you to take their offer.

[Bob Stevens]

Quote from @Katlynn Teague:

Quote from @Larry Turowski:

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

 Larry, thank you for taking the time to comment.

I agree with Bob as well. That said, to avoid getting yourself in a sticky situation with a shady wholesaler or realtor is asking the right questions upfront! 

 I can tell in 20 seconds of the wholesaler, is real or not. I always ask, are you direct with the owner? When they say, " my partner " is. That means they found a deal online, they are now marketing it and calling themselves a wholesaler. I than say, ok so you are not direct, then then talk BS. I than ask, do you know who, Mr Jones is? I find the name of the owner 1st, they say umm no I then say its the owner you idiot, but hey thanks for the lead, :)

All the best, 

[Henry Clark]

Because the original posters thoughts. Responding to her experiences.

On a positive note can you make a post to wholesalers to make their engagements more meaningful to potential buyers?  Do a series of posts. 

[Adam Macias]

Quote from @Bob Stevens:

Quote from @Katlynn Teague:

Quote from @Larry Turowski:

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

 Larry, thank you for taking the time to comment.

I agree with Bob as well. That said, to avoid getting yourself in a sticky situation with a shady wholesaler or realtor is asking the right questions upfront! 

 I can tell in 20 seconds of the wholesaler, is real or not. I always ask, are you direct with the owner? When they say, " my partner " is. That means they found a deal online, they are now marketing it and calling themselves a wholesaler. I than say, ok so you are not direct, then then talk BS. I than ask, do you know who, Mr Jones is? I find the name of the owner 1st, they say umm no I then say its the owner you idiot, but hey thanks for the lead, :)

All the best, 

 This is a very valid point because "co-wholesaling" has a huge amount of illegal activity and people who are brokering without a license. I love you brought this up. If the wholesaler is not under contract directly with the seller, it's not worth pursuing. 

[Bob Stevens]

Quote from @Adam Macias:

Quote from @Bob Stevens:

Quote from @Katlynn Teague:

Quote from @Larry Turowski:

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

 Larry, thank you for taking the time to comment.

I agree with Bob as well. That said, to avoid getting yourself in a sticky situation with a shady wholesaler or realtor is asking the right questions upfront! 

 I can tell in 20 seconds of the wholesaler, is real or not. I always ask, are you direct with the owner? When they say, " my partner " is. That means they found a deal online, they are now marketing it and calling themselves a wholesaler. I than say, ok so you are not direct, then then talk BS. I than ask, do you know who, Mr Jones is? I find the name of the owner 1st, they say umm no I then say its the owner you idiot, but hey thanks for the lead, :)

All the best, 

 This is a very valid point because "co-wholesaling" has a huge amount of illegal activity and people who are brokering without a license. I love you brought this up. If the wholesaler is not under contract directly with the seller, it's not worth pursuing. 

 I have had clowns try and sell me my own property, YES my own, They cant hang up fast enough LOL 

[Robert Brunson]

I have been on both sides of the Wholesale coin. I started out as a "Terrible Daisy Chain" type of investor. I had no choice, I knew nothing and I had little to no money. After getting cussed out and berated by "Seasoned Investors" I quickly made the change to invest more time into books,seminars, countless training and graduating Top of my class at YouTube University (I kid lol). The point being everyone starts some where. Now I'm hired by those same Seasoned Investors as a key component to there everyday business by finding deals they don't have time to go out and find the right way. They teach me everyday what they need and I make it my personal and professional mission to find not only deals that work inside of their "Buy Box" but deals that will flourish even with setbacks, holding cost and vacancies. I appreciate learning more now than I ever did, the hard way . I believe it was through being a "terrible wholesalers who was given a chance to grow.

[Wale Lawal]

@Katlynn Teague

Real estate wholesalers are middlemen who bring together homeowners of distressed houses and investors who want a below-market real estate deal that they can make a profit on.

Wholesale real estate offers beginners the opportunity to start investing in real estate. It usually involves little or zero capital investment. With experience, wholesalers can get a number of deals working at one time and make a sizable profit quickly.

Real estate wholesaling involves a certain amount of risk, especially if a wholesaler has to make earnest money deposits. However, the potential to make solid profits is there for those who commit to the time and effort required to build a wholesale real estate business.

All the best!

[Jay Hinrichs]

Quote from @Bob Stevens:

Quote from @Adam Macias:

Quote from @Bob Stevens:

Quote from @Katlynn Teague:

Quote from @Larry Turowski:

Gotta agree with @Bob Stevens. The bar is really low for becoming a wholesaler. The  bar is only slightly higher for becoming a realtor and they can be every bit as bad and shady as wholesalers.

The truly good wholesalers and truly good real estate agents who work really hard—they’re great.  That said, like Bob, I haven’t bought a listed property in a long time.

 Larry, thank you for taking the time to comment.

I agree with Bob as well. That said, to avoid getting yourself in a sticky situation with a shady wholesaler or realtor is asking the right questions upfront! 

 I can tell in 20 seconds of the wholesaler, is real or not. I always ask, are you direct with the owner? When they say, " my partner " is. That means they found a deal online, they are now marketing it and calling themselves a wholesaler. I than say, ok so you are not direct, then then talk BS. I than ask, do you know who, Mr Jones is? I find the name of the owner 1st, they say umm no I then say its the owner you idiot, but hey thanks for the lead, :)

All the best, 

 This is a very valid point because "co-wholesaling" has a huge amount of illegal activity and people who are brokering without a license. I love you brought this up. If the wholesaler is not under contract directly with the seller, it's not worth pursuing. 

 I have had clowns try and sell me my own property, YES my own, They cant hang up fast enough LOL 

not to mention the way 99% of wholesalers operate in OHIO is Illegal..  nothing wrong with making a back up offer on something.. if wholesaler cant perform you slide right in.. done every day..  My best deals have come from top OREO agents and the deals before they get listed.. And or FSBO.. wholesaler its deals and some volume but rarely are they much better than just average.

[Carlton B.]

Buying from a wholesaler or MLS it all about due diligence. You got to know your market and what makes a good deal. There are questionable people in all areas of real estate brokers, inspectors, and contractors. Do enough deals and you will run across a goofy ball. With that said I'm on a few wholesalers list and have bought more then one property from them.

[Eliott Elias]

There is no barrier to entry and most do not know what they are doing. ARV's and rehabs are off, most contracts fail, or I have to step in and negotiate the price down with the seller.

[Bud Gaffney]

@Katlynn Teague that they’re top 5 most annoying humans on the planet.