Why should an investor work with a wholesaler over a real estate agent?

[Katlynn Teague]

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

If you're an investor looking to buy distressed properties, you may be wondering whether to work with a real estate agent or a wholesaler. There are pros and cons to both, but in many cases, working with a wholesaler can be the best option.

Here are a few reasons why you should consider working with a wholesaler:

• Wholesalers have a network of investors. Wholesalers typically have a network of investors who are looking to buy distressed properties. This means that they can quickly find a buyer for your property, which can save you time and money.
• Wholesalers can close deals faster. Real estate agents typically have a lot of listings, and they may not be able to close a deal as quickly as a wholesaler. This is because wholesalers are typically focused on finding buyers for distressed properties, and they have a network of investors who are ready to buy.
• Wholesalers can save you money. Real estate agents typically charge a commission, which can be as high as 6% of the sale price. Wholesalers, on the other hand, typically charge a flat fee, which is much lower.
• Wholesalers can help you avoid hassle. Buying a distressed property can be a hassle, especially if you're not familiar with the process. Wholesalers can help you with everything from finding a property to closing the deal.

Of course, there are also some potential drawbacks to working with a wholesaler:

• Wholesalers may not be as experienced as real estate agents. Wholesalers typically have less experience than real estate agents, and they may not be as familiar with the local market.
• Wholesalers may not be able to get you the best price. Wholesalers are typically focused on finding buyers quickly, and they may not be able to get you the best price for your property.

Ultimately, the decision of whether to work with a real estate agent or a wholesaler is up to you. If you're looking for a quick and easy sale, and you're willing to sacrifice some money, then working with a wholesaler may be the best option for you. However, if you want to get the best possible price for your property, and you're willing to put in some time and effort, then working with a real estate agent may be the better choice.

Here are some tips for finding a good wholesaler:

• Ask for referrals from friends, family, or colleagues.
• Check online reviews.
• Interview several wholesalers before making a decision.
• Make sure the wholesaler is licensed and insured.

Working with a wholesaler can be a great way to buy distressed properties. By following these tips, you can find a good wholesaler who can help you get the best possible outcome for your purchase.

Here are some additional reasons why investors should work with wholesalers over real estate agents on the purchase of distressed properties:

• Wholesalers are more likely to be familiar with the distressed property market. Wholesalers typically specialize in buying and selling distressed properties, so they have a deep understanding of the market and the types of properties that are available. This can be a valuable asset for investors who are new to the market.
• Wholesalers can provide investors with access to properties that are not listed on the MLS. Many distressed properties are never listed on the MLS, so they are only available to investors who know where to look. Wholesalers typically have access to these off-market properties, which can give investors a competitive advantage.
• Wholesalers can help investors negotiate better prices on distressed properties. Wholesalers are often in a position to negotiate better prices on distressed properties than investors can on their own. This is because wholesalers have a relationship with the sellers and they know what the sellers are willing to accept.

Overall, there are many reasons why investors should consider working with wholesalers over real estate agents on the purchase of distressed properties. Wholesalers have the knowledge, experience, and access that investors need to find and acquire distressed properties at a profit.

[Taylor Dasch]

Great post, I think that its advantageous to work with both. I recommend using a realtor to ensure that the numbers are correct as far as the ARV and rental rates go. I often times see inflated ARVs with wholesalers which can really break a deal. Also, if you can find a really good wholesaler you can scale your portfolio very fast - most wholesalers in my market are fairly large and take a lot of meat off the deals.

Theres pros and cons to each but it definitely doesnt hurt to have a realtor to run numbers by and make sure you are getting a decent deal. I personally would do this for any of my clients because I know they will likely use me on the sale side when they decide to offload anything. 

[Jay Hinrichs]

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

If you're an investor looking to buy distressed properties, you may be wondering whether to work with a real estate agent or a wholesaler. There are pros and cons to both, but in many cases, working with a wholesaler can be the best option.

Here are a few reasons why you should consider working with a wholesaler:

• Wholesalers have a network of investors. Wholesalers typically have a network of investors who are looking to buy distressed properties. This means that they can quickly find a buyer for your property, which can save you time and money.
• Wholesalers can close deals faster. Real estate agents typically have a lot of listings, and they may not be able to close a deal as quickly as a wholesaler. This is because wholesalers are typically focused on finding buyers for distressed properties, and they have a network of investors who are ready to buy.
• Wholesalers can save you money. Real estate agents typically charge a commission, which can be as high as 6% of the sale price. Wholesalers, on the other hand, typically charge a flat fee, which is much lower.
• Wholesalers can help you avoid hassle. Buying a distressed property can be a hassle, especially if you're not familiar with the process. Wholesalers can help you with everything from finding a property to closing the deal.

Of course, there are also some potential drawbacks to working with a wholesaler:

• Wholesalers may not be as experienced as real estate agents. Wholesalers typically have less experience than real estate agents, and they may not be as familiar with the local market.
• Wholesalers may not be able to get you the best price. Wholesalers are typically focused on finding buyers quickly, and they may not be able to get you the best price for your property.

Ultimately, the decision of whether to work with a real estate agent or a wholesaler is up to you. If you're looking for a quick and easy sale, and you're willing to sacrifice some money, then working with a wholesaler may be the best option for you. However, if you want to get the best possible price for your property, and you're willing to put in some time and effort, then working with a real estate agent may be the better choice.

Here are some tips for finding a good wholesaler:

• Ask for referrals from friends, family, or colleagues.
• Check online reviews.
• Interview several wholesalers before making a decision.
• Make sure the wholesaler is licensed and insured.

Working with a wholesaler can be a great way to buy distressed properties. By following these tips, you can find a good wholesaler who can help you get the best possible outcome for your purchase.

Here are some additional reasons why investors should work with wholesalers over real estate agents on the purchase of distressed properties:

• Wholesalers are more likely to be familiar with the distressed property market. Wholesalers typically specialize in buying and selling distressed properties, so they have a deep understanding of the market and the types of properties that are available. This can be a valuable asset for investors who are new to the market.
• Wholesalers can provide investors with access to properties that are not listed on the MLS. Many distressed properties are never listed on the MLS, so they are only available to investors who know where to look. Wholesalers typically have access to these off-market properties, which can give investors a competitive advantage.
• Wholesalers can help investors negotiate better prices on distressed properties. Wholesalers are often in a position to negotiate better prices on distressed properties than investors can on their own. This is because wholesalers have a relationship with the sellers and they know what the sellers are willing to accept.

Overall, there are many reasons why investors should consider working with wholesalers over real estate agents on the purchase of distressed properties. Wholesalers have the knowledge, experience, and access that investors need to find and acquire distressed properties at a profit.

your painting a rosy picture which is not based in reality.  Most wholesalers are clueless .. most experienced investors know that most deals the numbers are not accurate.. wholesalers cant close any faster than any decent agent .. Etc etc.. 

[Evan Polaski]

@Katlynn Teague, given that you are an agent, I commend you for finding advantages to wholesalers.  

In my experiences, the "wholesalers" I have worked with and would consider continuing to work with are all licensed agents.  They operate under the same guidelines as you note a wholesaler does above: investor network, focus on distressed properties, flat fee commissions (often paid by buyer as the assignment fee), etc.  

Unfortunately, most people that call themselves wholesalers are simply inexperienced people that are trying to make a quick buck.  Maybe they watched some YouTube videos or paid for a course, but think they can just get into real estate with no money and no experience.  I mean it is simple, right?  And in Ohio, most are breaking the law by practicing in real estate without a license, since they are never truly a buyer or seller. 

[Doug Smith]

There are a handful of wholesalers we will work with, but we've really had issues with the transactions that we've been involved with where some wholesalers are involved. That being said, there are many competent and incompetent people in any field. Take the property profile you're given from a wholesaler and throw it out. The rehab numbers and ARVs are rarely, if ever, accurate. We were just presented one from a larger wholesaling shop where the subject property was inland and the comps they tried to use were on navigable Tampa-area waterways with direct Gulf-access. I also just got screwed by one who purposely tanked a deal we had with them when they found someone that would pay more. I'm not saying we won't work with a wholesaler, but we go in with our eyes wide open. 

[Eric James]

I'd work with anyone who has a good deal. So far I haven't seen anything from a wholesaler that I'd want.

[Lucia Rushton]

@Evan Polaski she’s an agent working at a national wholesaler.

[Lucia Rushton]

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

The easiest start of my reply would be - let's agree to disagree.

I strongly do not encourage first time investors to work with wholesalers because they have no representation. They don't know what they don't know. And on the flip side many wholesalers as noted above, don't know what they don't know regarding ARV, rehab costs etc. But one of the biggest concerns is an investor cannot perform an inspection, they cannot have an option period. Next, they have to pay cash or HM and new investors are not always seasoned to understand the weight of using HM.

Lastly, you mention the 6% that both the seller and the buyers agent share, but over the last few years some wholesalers have been taking the meat off the bone upwards of $50K on a traditional SFH here in DFW - OUCH! Pre-plandemic yes wholesalers were securing on average $3-5K per deal (and many of them had no idea what they were doing). So what Realtors work for, the services we provide for 3% of the sales price, is well worth the price to have a strong team member on your side.

Now, seasoned investors go for it, work with either.

As always just my opinions. 

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Katlynn Teague:

your painting a rosy picture which is not based in reality.  Most wholesalers are clueless .. most experienced investors know that most deals the numbers are not accurate.. wholesalers cant close any faster than any decent agent .. Etc etc.. 

 totally agree, this kind of post is bit of annoying and dangerous when read by inexperienced investor. There're just too many false assumption in the post. Not sure what's the point of promoting wholesaler business.

[Jay Hinrichs]

Quote from @Lucia Rushton:

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

The easiest start of my reply would be - let's agree to disagree.

I strongly do not encourage first time investors to work with wholesalers because they have no representation. They don't know what they don't know. And on the flip side many wholesalers as noted above, don't know what they don't know regarding ARV, rehab costs etc. But one of the biggest concerns is an investor cannot perform an inspection, they cannot have an option period. Next, they have to pay cash or HM and new investors are not always seasoned to understand the weight of using HM.

Lastly, you mention the 6% that both the seller and the buyers agent share, but over the last few years some wholesalers have been taking the meat off the bone upwards of $50K on a traditional SFH here in DFW - OUCH! Pre-plandemic yes wholesalers were securing on average $3-5K per deal (and many of them had no idea what they were doing). So what Realtors work for, the services we provide for 3% of the sales price, is well worth the price to have a strong team member on your side.

Now, seasoned investors go for it, work with either.

As always just my opinions. 

Another major issue with Wholesalers is if your just paying a wholesale fee and they dont own it . you only get Title insurance for the amount of the actaul purchase contract..  so say the contract is 50k with the owner and the nice wholesaler is adding 20k as an assignment fee or commission of any kind on the HUD your only getting title insurance for the 50k .. if you have a title claim thats all your going to get your out the 20k fee they took plus any rehab you did.  

And since wholesalers deal in distressed asssets and distressed titles this can happen.. its happened to me twice this year already.. we can weather it but if your a beginner this could be devastating to your finances..

[Mike Hern]

Quote from @Jay Hinrichs:

Quote from @Lucia Rushton:

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

The easiest start of my reply would be - let's agree to disagree.

I strongly do not encourage first time investors to work with wholesalers because they have no representation. They don't know what they don't know. And on the flip side many wholesalers as noted above, don't know what they don't know regarding ARV, rehab costs etc. But one of the biggest concerns is an investor cannot perform an inspection, they cannot have an option period. Next, they have to pay cash or HM and new investors are not always seasoned to understand the weight of using HM.

Lastly, you mention the 6% that both the seller and the buyers agent share, but over the last few years some wholesalers have been taking the meat off the bone upwards of $50K on a traditional SFH here in DFW - OUCH! Pre-plandemic yes wholesalers were securing on average $3-5K per deal (and many of them had no idea what they were doing). So what Realtors work for, the services we provide for 3% of the sales price, is well worth the price to have a strong team member on your side.

Now, seasoned investors go for it, work with either.

As always just my opinions. 

Another major issue with Wholesalers is if your just paying a wholesale fee and they dont own it . you only get Title insurance for the amount of the actaul purchase contract..  so say the contract is 50k with the owner and the nice wholesaler is adding 20k as an assignment fee or commission of any kind on the HUD your only getting title insurance for the 50k .. if you have a title claim thats all your going to get your out the 20k fee they took plus any rehab you did.  

And since wholesalers deal in distressed asssets and distressed titles this can happen.. its happened to me twice this year already.. we can weather it but if your a beginner this could be devastating to your finances..

That's a good insight.

[Jay Hinrichs]

Quote from @Mike Hern:

Quote from @Jay Hinrichs:

Quote from @Lucia Rushton:

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

The easiest start of my reply would be - let's agree to disagree.

I strongly do not encourage first time investors to work with wholesalers because they have no representation. They don't know what they don't know. And on the flip side many wholesalers as noted above, don't know what they don't know regarding ARV, rehab costs etc. But one of the biggest concerns is an investor cannot perform an inspection, they cannot have an option period. Next, they have to pay cash or HM and new investors are not always seasoned to understand the weight of using HM.

Lastly, you mention the 6% that both the seller and the buyers agent share, but over the last few years some wholesalers have been taking the meat off the bone upwards of $50K on a traditional SFH here in DFW - OUCH! Pre-plandemic yes wholesalers were securing on average $3-5K per deal (and many of them had no idea what they were doing). So what Realtors work for, the services we provide for 3% of the sales price, is well worth the price to have a strong team member on your side.

Now, seasoned investors go for it, work with either.

As always just my opinions. 

Another major issue with Wholesalers is if your just paying a wholesale fee and they dont own it . you only get Title insurance for the amount of the actaul purchase contract..  so say the contract is 50k with the owner and the nice wholesaler is adding 20k as an assignment fee or commission of any kind on the HUD your only getting title insurance for the 50k .. if you have a title claim thats all your going to get your out the 20k fee they took plus any rehab you did.  

And since wholesalers deal in distressed asssets and distressed titles this can happen.. its happened to me twice this year already.. we can weather it but if your a beginner this could be devastating to your finances..

That's a good insight.

its not common but I have had it happen twice this year already..  its why I limit how much of the wholesaler fee I will finance. 

[Kristina Kuba]

Like any profession, there’s bad apples and good apples… I work with a few professional wholesalers and yes you might see a large assignment fee but what you don’t see is the heavy marketing costs that go behind it. The best wholesalers I work with don't rely on bandit signs or cold calling people, they run SEO and direct mail to websites and online forms.

There are listings in my career I have encountered that I simply cannot take on because of the heavy damage to the house, hoarding situation, or the seller simply tells me that they need the funds within 30 days because of something unexpected in their life. That is where I connect them to a reputable wholesaler.

My 2 cents.

[Bob Stevens]

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

If you're an investor looking to buy distressed properties, you may be wondering whether to work with a real estate agent or a wholesaler. There are pros and cons to both, but in many cases, working with a wholesaler can be the best option.

Here are a few reasons why you should consider working with a wholesaler:

• Wholesalers have a network of investors. Wholesalers typically have a network of investors who are looking to buy distressed properties. This means that they can quickly find a buyer for your property, which can save you time and money.
• Wholesalers can close deals faster. Real estate agents typically have a lot of listings, and they may not be able to close a deal as quickly as a wholesaler. This is because wholesalers are typically focused on finding buyers for distressed properties, and they have a network of investors who are ready to buy.
• Wholesalers can save you money. Real estate agents typically charge a commission, which can be as high as 6% of the sale price. Wholesalers, on the other hand, typically charge a flat fee, which is much lower.
• Wholesalers can help you avoid hassle. Buying a distressed property can be a hassle, especially if you're not familiar with the process. Wholesalers can help you with everything from finding a property to closing the deal.

Of course, there are also some potential drawbacks to working with a wholesaler:

• Wholesalers may not be as experienced as real estate agents. Wholesalers typically have less experience than real estate agents, and they may not be as familiar with the local market.
• Wholesalers may not be able to get you the best price. Wholesalers are typically focused on finding buyers quickly, and they may not be able to get you the best price for your property.

Ultimately, the decision of whether to work with a real estate agent or a wholesaler is up to you. If you're looking for a quick and easy sale, and you're willing to sacrifice some money, then working with a wholesaler may be the best option for you. However, if you want to get the best possible price for your property, and you're willing to put in some time and effort, then working with a real estate agent may be the better choice.

Here are some tips for finding a good wholesaler:

• Ask for referrals from friends, family, or colleagues.
• Check online reviews.
• Interview several wholesalers before making a decision.
• Make sure the wholesaler is licensed and insured.

Working with a wholesaler can be a great way to buy distressed properties. By following these tips, you can find a good wholesaler who can help you get the best possible outcome for your purchase.

Here are some additional reasons why investors should work with wholesalers over real estate agents on the purchase of distressed properties:

• Wholesalers are more likely to be familiar with the distressed property market. Wholesalers typically specialize in buying and selling distressed properties, so they have a deep understanding of the market and the types of properties that are available. This can be a valuable asset for investors who are new to the market.
• Wholesalers can provide investors with access to properties that are not listed on the MLS. Many distressed properties are never listed on the MLS, so they are only available to investors who know where to look. Wholesalers typically have access to these off-market properties, which can give investors a competitive advantage.
• Wholesalers can help investors negotiate better prices on distressed properties. Wholesalers are often in a position to negotiate better prices on distressed properties than investors can on their own. This is because wholesalers have a relationship with the sellers and they know what the sellers are willing to accept.

Overall, there are many reasons why investors should consider working with wholesalers over real estate agents on the purchase of distressed properties. Wholesalers have the knowledge, experience, and access that investors need to find and acquire distressed properties at a profit.

I haver done about 45 mill in deals, NEVER used a realtor. 95% from wholesalers for a reason, 

All the best  

[V.G Jason]

Most wholesalers are trash. Not all, of course I'd never say that. But every market that I've gotten deep in or have lived in, their numbers are more fabricated than Enron's. 

[Jerryll Noorden]

Quote from @Katlynn Teague:

Why should an investor work with a wholesaler over a real estate agent on the purchase of distressed properties? 

If you're an investor looking to buy distressed properties, you may be wondering whether to work with a real estate agent or a wholesaler. There are pros and cons to both, but in many cases, working with a wholesaler can be the best option.

Here are a few reasons why you should consider working with a wholesaler:

• Wholesalers have a network of investors. Wholesalers typically have a network of investors who are looking to buy distressed properties. This means that they can quickly find a buyer for your property, which can save you time and money.
• Wholesalers can close deals faster. Real estate agents typically have a lot of listings, and they may not be able to close a deal as quickly as a wholesaler. This is because wholesalers are typically focused on finding buyers for distressed properties, and they have a network of investors who are ready to buy.
• Wholesalers can save you money. Real estate agents typically charge a commission, which can be as high as 6% of the sale price. Wholesalers, on the other hand, typically charge a flat fee, which is much lower.
• Wholesalers can help you avoid hassle. Buying a distressed property can be a hassle, especially if you're not familiar with the process. Wholesalers can help you with everything from finding a property to closing the deal.

Of course, there are also some potential drawbacks to working with a wholesaler:

• Wholesalers may not be as experienced as real estate agents. Wholesalers typically have less experience than real estate agents, and they may not be as familiar with the local market.
• Wholesalers may not be able to get you the best price. Wholesalers are typically focused on finding buyers quickly, and they may not be able to get you the best price for your property.

Ultimately, the decision of whether to work with a real estate agent or a wholesaler is up to you. If you're looking for a quick and easy sale, and you're willing to sacrifice some money, then working with a wholesaler may be the best option for you. However, if you want to get the best possible price for your property, and you're willing to put in some time and effort, then working with a real estate agent may be the better choice.

Here are some tips for finding a good wholesaler:

• Ask for referrals from friends, family, or colleagues.
• Check online reviews.
• Interview several wholesalers before making a decision.
• Make sure the wholesaler is licensed and insured.

Working with a wholesaler can be a great way to buy distressed properties. By following these tips, you can find a good wholesaler who can help you get the best possible outcome for your purchase.

Here are some additional reasons why investors should work with wholesalers over real estate agents on the purchase of distressed properties:

• Wholesalers are more likely to be familiar with the distressed property market. Wholesalers typically specialize in buying and selling distressed properties, so they have a deep understanding of the market and the types of properties that are available. This can be a valuable asset for investors who are new to the market.
• Wholesalers can provide investors with access to properties that are not listed on the MLS. Many distressed properties are never listed on the MLS, so they are only available to investors who know where to look. Wholesalers typically have access to these off-market properties, which can give investors a competitive advantage.
• Wholesalers can help investors negotiate better prices on distressed properties. Wholesalers are often in a position to negotiate better prices on distressed properties than investors can on their own. This is because wholesalers have a relationship with the sellers and they know what the sellers are willing to accept.

Overall, there are many reasons why investors should consider working with wholesalers over real estate agents on the purchase of distressed properties. Wholesalers have the knowledge, experience, and access that investors need to find and acquire distressed properties at a profit.

 Here is an other mistake almost everyone is making.

You are NOT looking for distressed properties. You are looking for motivated sellers.

There is a big difference between a distressed property and a motivated seller.

A distressed property is simply a property that may or may not be owned by a person that is motivated to sell.

A motivated seller is someone that ius motivated to sell whether or not the property is in distress.

The difference here is that we buy houses for 30 cents on the dollar, regardless if the house needs work or not.

Read this:

https://www.biggerpockets.com/...