Is buying from wholesalers a good strategy for rehabing?

Question

Is buying from wholesalers a good strategy and if so what is the best way to connect with wholesalers? I am in the north of Atlanta area and I have pretty much just been looking at properties on the fmls but I'm looking to find new avenues of finding rehab investments.

Peter Hanson · Answer

do your own intel on the house, do your numbers match the numbers of the wholesaler?  from what Ive seen, after networking with 10 wholesalers...is they all get emailed the same list of "deals"    which they forward to you the potential buyer. So I see a house that looks good, I call the guy, he says..."it's not mine...call bill...who says it's not mine call jim...who says it's not mine call jane.....and on and on and on.  then I look on the MLS, it shows active and it's listed by an agent of the seller themselves is an agent.   Check it all out yourself, don't believe some random persons analysis...

part a:  they never have control of the deal, it's a broker/wholesaler chain of people

part b: if it's really their deal they've marked it up so theres no more room in the deal to make any money (not always true)

part c:  if the numbers work, set up a time to see the house, if you like it put some money in escrow, and set up a date/time to close

part d: fix it up and rent it out, or fix it up and sell it

part e: Profit....if there is any

Dev Horn · Answer

Sure, buying from wholesalers is fine IF the numbers work.  We don't care who is selling the house IF the numbers work, and wholesalers are out there beating the street for deals.  Granted, as @Scott Swink points out, many wholesale "deals" and not really DEALS.  But many are.

Most people on this site are wholesalers asking where the cash buyers are.  You have the opposite challenge, but believe me, the wholesalers are looking for YOU.  I have a great investor contact there in Atlanta if you want to PM me for his contact info.

Scott E. · Answer

Jacob -

It really just depends on the wholesaler. I've connected with ~15 wholesalers in my area, but only 2 of them are sending quality deals, and they are few and far between.

I know there are quality wholesalers out there, but connecting with them is the most challenging part. Visit your local REIA's, search craigslist, scour the forums for people local to you, call the numbers on bandit signs, etc.

You'll find them.

Shaun Reilly · Answer

I mean it is a simple question.  Yes it is a great way to buy if they bring you a good deal.  It is a terrible way to buy if they bring you overpriced crap you can't make any money on.

You can say the exact same thing about a real estate agent.  Well worth paying the commissions if they find you a diamond in the rough and can get an offer that makes it work for you accepted.

I look at "deals" from wholesalers all the time and never buy any since there is a reason I have those quotation marks...

However I still always at least give them a quick look in case they have potential.  "Luckily" most are so terrible I only have to take the 1-2 minutes to read the email to see I don't need to put any more effort into it.

Actually got one today that looks promising so will spend a little time after this looking a little more closely to see if their ARV stands up to MLS comps.

Steven Huang · Answer

Personally, since I live out of state from where I'm living. (Heck, I'm out of country!) It's difficult for me to create my own marketing system for off-market deals so what I did is just reach out to as many wholesalers as I can, vet out the ones that are tirekickers, or don't know how to run the numbers properly like an investor would, and then focus on the one or two who are actually sending me viable deals and work with them. It's much better than going into bidding wars on the MLS.

Marcin G. · Answer

MLS is slow drying out ..REOs getting more expensive ...more people with credit or money..2009 is over ;-) so yes ..work with whoever brings you good deal !!! ;-) and yes ..every day in your and my area there are flippers who got their hands on the great deal via that channel. click the heck outta ur xls file and you will make it!

Jacob Patterson · Answer

I'm fully aware of what and how a wholesaler works. I understand the concept.  I know every deal is different and you definitely have to run your own analysis to make sure the numbers work for you and what your goal is financially for that property. I guess my real question is have rehab and flip investors in the Atlanta and surrounding areas had any luck using wholesale people/companies?

Tariq Ahmad · Answer

For the jackasses are you talking about co-wholesalers? When someone will market another wholesalers property to thier list of buyers?

Dave Stewart · Answer

Wholesalers

"In a nut shell, real estate wholesale companies put properties (normally distressed properties) under contract and assign or resell the property to another investor. The end investor uses either cash, lines of credit, or hard money loans to purchase the discount property. This allows quick closings on properties that sometimes need extensive repairs.

A wholesaler lives off of the idea that price overcomes all objections. If you can sell a property for a low enough price it doesn't matter what’s wrong with it, somebody will buy it. A wholesaler focuses on developing two things: a system for finding deals, and a network of investors to sell to."

I found the above passage on Wikipedia

Someone who forwards a list that has been forwarded to them is not a wholesaler,  they are a Jackass.  We will never market another wholesalers list. It's a waste of time and destroys credibility.  It's a relationship business and the numbers game is just that, a game...  A true wholesaler is the owner or direct to owner.  Hope this helps.

Dave

WeBuyNowAtlanta@gmail.com

Jay Neil · Answer

The question is will the money still be there! If there is equity after the rehab it is a great idea! " If there is grass in the infield, PLAY BALL!"

Is buying from wholesalers a good strategy for rehabing?

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