Where have all the good Wholesalers gone?

Rehabbing & House Flipping
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Where have all the good Wholesalers gone?

Kahil Ortiz
Investor · Chicago, IL · Member since 2015 · 10 posts · 4 votes

Hello BP!

My name is Kahil and i'm a investor in the chicagoland area. I'm currently partnered with a company that has specialized in commercial lending and now is transitioning into residential flips. To get straight to the point. Where are the 'Real' wholesalers? i've reached out to a ton of supposed wholesalers and have only connected with Two wholesalers who actually know what a good deal is(thanks again Larmon). The rest have been giving all sorts of unrealistic rehab numbers, false ARVs and sending deals from others posing it as their own smh. i know chicago's market is saturated right now and deals are difficult to come by, but i know there has to be more dilligent wholesalers than this. I have alot of weight on my shoulders as i am new at this company and my role is to find deals, off market deals in particular. Any help, advice, would be greatly appreciated. Thanks!

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Andrew Johnson
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y

@Kahil Ortiz The answer to your question is pretty easy if you read about wholesalers starting out. I seldom see the statement: "I want to have a career in wholesaling". What I do see are people saying they want wholesale to generate money to get into flipping or buy-and-holds. So if you split up the wholesaler market into successes and failures those "successes" will graduate to their preferred strategy. All that's left are failures and newbies. There's zero barrier to entry and you can put your marketing funds on a credit card to start if you want. There's no required education, certification, etc. and they specifically call part of their marketing "bandit signs". Okay, that last bit was getting hyperbolic but you get the point. There's no possible way to outsource your deal diligence (i.e. coming up with a valid ARV, realistic repair costs, etc.) to them especially when the spread is their profit. Odds are, by the time you get good at wholesaling and learned (through making a few deals) you will then have the capital to buy it, rehab it, and sell it yourself. So, reach out to 100 wholesalers and find the 2 that stuck it out in the market because they truly liked it and didn't want to "graduate" to flipping or buy-and-hold. My two cents...

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    this is typical of any business were there is no barrier to entry and they are just trying to sell real estate and make a fee.. what can you expect with someone who learned on line and has little to no money.. they shoot for the moon and hope to get something to stick..

    we rarely deal with them as most are time sucks and simply don't know what they are doing.  I certainly would not base a business on deal flow from the wholesale community.. they can be one avenue but not your go to.. that's my take on it.

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  • Kahil Ortiz
    OP
    Investor · Chicago, IL · Member since 2015 · 10 posts · 4 votes
    9y

    Thank you for your response Jay! What is your particular strategy if you don't mind me asking?

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  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Kahil Ortiz The answer to your question is pretty easy if you read about wholesalers starting out. I seldom see the statement: "I want to have a career in wholesaling". What I do see are people saying they want wholesale to generate money to get into flipping or buy-and-holds. So if you split up the wholesaler market into successes and failures those "successes" will graduate to their preferred strategy. All that's left are failures and newbies. There's zero barrier to entry and you can put your marketing funds on a credit card to start if you want. There's no required education, certification, etc. and they specifically call part of their marketing "bandit signs". Okay, that last bit was getting hyperbolic but you get the point. There's no possible way to outsource your deal diligence (i.e. coming up with a valid ARV, realistic repair costs, etc.) to them especially when the spread is their profit. Odds are, by the time you get good at wholesaling and learned (through making a few deals) you will then have the capital to buy it, rehab it, and sell it yourself. So, reach out to 100 wholesalers and find the 2 that stuck it out in the market because they truly liked it and didn't want to "graduate" to flipping or buy-and-hold. My two cents...

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  • Ozzy SmithPro Member
    Specialist · Dayton, OH · Member since 2014 · 352 posts · 265 votes
    9y
    There are a few of us but stated earlier it's a lot of newbies that haven't got a clue. My two cents also is there are a lot of "supposed big buyers " that are just as guilty n don't or can't perform like they state.
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Ozzy Smith  very true when I had my RE agency .. everytime a TV flipping show came through we would get the next wave of all hat no cattle buyers blowing up my agents with the same line.

    I am a cash buyer I can buy 10 homes a month and your going to list them all.

    I would have them come in for an interview... I can bet you can guess how many could actually even buy one ??? :)

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  • Nick C.
    Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
    9y

    I hope you have avenues of sourcing properties other than wholesalers, you are going to be very disappointed most of the time. Most will never even get a property under contract, but will definitely be kind enough to forward you the daisy chained terrible deals that go around every day. As Andrew said, most wholesalers want to use wholesaling as a gateway to buy and holds or flips, as this is the preferred method "taught" by gurus. Or it's a big time institutional wholesale operation, and those are set up like boiler rooms, jamming terrible deals down new flippers throats. It's the blind leading the blind in that scenario. 

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  • Kahil Ortiz
    OP
    Investor · Chicago, IL · Member since 2015 · 10 posts · 4 votes
    9y
    Originally posted by @Andrew Johnson:

    @Kahil Ortiz The answer to your question is pretty easy if you read about wholesalers starting out. I seldom see the statement: "I want to have a career in wholesaling". What I do see are people saying they want wholesale to generate money to get into flipping or buy-and-holds. So if you split up the wholesaler market into successes and failures those "successes" will graduate to their preferred strategy. All that's left are failures and newbies. There's zero barrier to entry and you can put your marketing funds on a credit card to start if you want. There's no required education, certification, etc. and they specifically call part of their marketing "bandit signs". Okay, that last bit was getting hyperbolic but you get the point. There's no possible way to outsource your deal diligence (i.e. coming up with a valid ARV, realistic repair costs, etc.) to them especially when the spread is their profit. Odds are, by the time you get good at wholesaling and learned (through making a few deals) you will then have the capital to buy it, rehab it, and sell it yourself. So, reach out to 100 wholesalers and find the 2 that stuck it out in the market because they truly liked it and didn't want to "graduate" to flipping or buy-and-hold. My two cents...

     Thank you Andrew for actually giving some sound advice rather than coming on this post saying what "Can't" be done. As i have stated, i have also met a couple of good wholesalers as well. And you're right, they are those who actually like what they do. i'll keep reaching out, Thanks!

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