I posted yesterday about a bad wholesaler that I came across on BP a few years back, sorta turned me off to the basic concept. But now I have some cash sitting on the sidelines and am actively looking at deals now. Where are the great wholesalers at? not just the newbies that have NO clue what they are doing but seasoned vets who know the game and understand how costs break down.
As a side note, what do flippers usually like to make over the wholesalers? The wholesalers did the leg work, etc. But the flippers take 100% of the risk. In my opinion I would like to be making close to 10 times what the wholesaler made on the deal. Does that seem too rich?
Why would a wholesalers fee have an impact on what you would want your profit to be?
I am not following.
@David Schach I looked for your post about the bad wholesaler, couldn't find it. If the deal is a deal what does it matter what the wholesaler makes? If I brought you a killer deal that you did backflips over to get, would you walk if I was to make 50k? I've run across that, super deal, buyer walks because my time isn't worth the 8k I wanted.
But to answer your question it really boils down to the deal its self. Are repairs accounted for, is there a profit for you, did the wholesaler use a valid ARV or just some number he wants it to be. A newbie could bring the best deal of your life if the numbers work.
Finding great wholesalers is no different than finding great buyers. It requires networking and constant relationship building. Just because you have cash available doesn't necessarily mean that a great wholesaler needs you, if they are truly great they will have buyers lined up for their deals.
On your side note, you really shouldn't concern yourself with what the wholesaler makes - your decision should be purely based on what you can make.
Good points, well noted. Its not my main concern what the wholesaler makes as an absolute figure. I was just wondering what people are looking at in terms of a worthwhile person to partner with. A deal is a deal, regardless. Out here I would suspect that its a little harder to find deals with that much profit whereby a wholesaler is able to pocket equal to or greater than the rehabber. But I am just getting back into it after a few years off.
And, yeah, thank you, for confirming my thoughts, I need to get back to networking at meet ups etc.
I'm pretty much going to echo the sentiment of the others who have responded to this thread. It shouldn't matter what the wholesalers fee is. As far as where to go to find them:
- BP marketplace
- Local REIA
- Talk to local hard money lenders
You need to vet the wholesaler the same way you would any other person or company you might do business with. Ask them:
- How long have they been in the business
- How many deals have they done
- How many other investors do they work with
- Will they always have the deal under contract (a must)
- How do they market to get deals
- How many do they get a month
My suggestion to you for establishing a relationship with a good wholesaler would be to breakdown your buying criteria:
- Where you are looking to buy
- Price point
- Property type and specs
- Target ROI.
Make it clear what you are looking for, and if they present you with a deal that fits your criteria... Perform. Do this and you'll be put near the top of their list for future deals.
What the wholesaler is making in all honesty isn't really your concern. If the deal makes sense it makes sense. You may not realize that the wholesaler has thousands of dollars into marketing costs that he has to pay off. Don't lose a good deal to pride.
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