How are You Sourcing Your Investment Properties?

Question

I live in the Nashville area and have been getting feedback from investors that they're fed up with working with wholesalers. Has that been your experience? If so, tell me more! If not, what questions do you ask your wholesalers to establish a productive and beneficial working relationship? Please keep responses informational and friendly. I'm not on here to put down any part of the industry, just curious what other investors are experiencing and finding in the great Nashville area.

Peter Mckernan · Answer

The wholesalers in my experience that are good, or let's say the ones that have good deals are the ones that are smaller outfits. They do not have a lot of overhead that they need to keep up with on a monthly bases. The wholesalers that are one or two man shops are the ones that do not add a large fee on the deal to make the numbers not work.

I would look for this or with bigger wholesalers if you get rep that calls you on really good deals because the bigger ones still get good deals, that is when you build that relationship deeper with that specific person at that shop.

Andy Sabisch · Answer

Wholesalers have gotten a bad reputation due to the vast number that bought a Facebook course, watched some YouTube videos, post a number of bandit signs, hire a VA using the same lists 1,000 others are using and see it as a way to make money with no investment. The problem is 90%+ have no business being in the business. They have no idea what a reno cost is, how to come up with an ARV or how to table up a deal. They tie up the property, promise the seller more than they can deliver and usually offer up deals that only a newbie would fall for. That is why regulations are coming to tighten up on this end of the business.

We have two wholesalers that we have come to trust . . . they find solid deals, have good spreads and offer individuals what they are looking for. I got real tired of my mailbox filled with over inflated deals often with the same house from multiple "wholesalers". If you find one that actually understands the reno process, comes up with an accurate ARV (or at least realistic) and sends you a targeted list rather than dozens of crap properties, they are worth their weight in gold. They find properties and I can use that time for actual reno work and moving ahead with projects. If you take the time to feel wholesalers (or those claiming to be) out, you can quickly see who knows what they are doing.

How are You Sourcing Your Investment Properties?

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