Wholesalers?

Rehabbing & House Flipping
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Wholesalers?

Corry Taie
Menifee, CA · Member since 2008 · 194 posts · 46 votes

Ok. First of all... I am not looking to hear from "wholesalers". I want to hear from INVESTORS/ REHABBERS who actually buy from real wholesalers. So Does anyone here actually know any GOOD wholesalers? I don't mean to sound rude, but I have yet to find any that don't under estimate the rehab costs & over estimate the ARV. When I started out. I wholesaled & I would put together a proforma with 3 BPO's & 3 Contractor Estimates & a CMA. The investor buyer had all the info up front & when they did their own due diligence, they found my numbers to be accurate. Buy doing these couple of extra steps (which did not take much time & was not much work at all), I gained the trust of my buyers & they sent all of their friends to me. However, now that I don't have the time to do all of this myself, I am having a fairly dificult time finding wholesalers that give accurate numbers. Then if one of them actually has a good deal, when you get to the closing table, you find that 5-10K for assignment or whatever is not enough. I actually saw one where the "wholesaler" was trying to collect over $40K... You can guess how quick that deal went south. So do any of you know any real & good wholesalers? I am in So. Cal. & looking in Riverside, Orange & San Diego Counties if this helps.

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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
15y

Well, As a wholesaler myself working for a larger company, though the small time guys can sometimes provide property a little cheaper, they can not get better homes, they dont have the relationships, infrastructure, not licensed, insured, bonded, No real backing, and most likely wont be around in the business for any real length of time. i doubt you would put anyone out of business.

Mike: wholesaling is a great business and though the entry into it is very low, its not as easy as people make it sound. It takes a long time to truly wholesale a deal. Many people bird dog for others to get some experience. Good luck

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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    15y

    I am a rehabber, principal investor (intermediate to long term), not a wholesaler and not a flipper.

    The "wholesalers" in my area suck. They mark up listed REO properties and claim they are wholesalers. I know the property that one guy was trying to sell me... he didn't even have it under contract and his price was over 35% over list. Give me a break! Here's a BP discussion I had with another wholesale poser who talked way bigger than his pockets!

    I contend that, in a market like mine, the rehabbers could take over and "own" the wholesaler's market if they wanted to. My business model and history don't coincide with wholesaling, but I'm thinking of doing some wholesale deals with my self directed IRA. My problem (if you can call it that) is that when I find good deals... and I keep them for myself! I am pretty confident that if I did wholesale via my SDIRA, it would be successful... but not as profitable as the investment buying I am doing with it now.

    So to answer your post... I did buy one property from a wholesaler, and his value add was zero.

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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    Yeah. I'm pretty confident that if I started wholesaling again, I would put ALOT of so called "wholesalers" out of business, because I can actually put a REAL DEAL together that has enough "meat left on the bone" for the investor & my numbers are accurate. But I guess that comes from actually investing in real estate myself. It is a great way to get started, but honesty & integrity are key in this industry.

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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    Only problem is. Like you said, I make way too much doing what I do versus wholesaleing. Maybe I should hire someone to do it for me & then I can teach them the right way. Then I can make more! Hmmm. I'm thinking expansion.

    1Reply
  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    I know someone who could probably contribute some great info & insight on this topic.... Come on Will.... Where you at? Sorry... Didn't mean to throw you under the bus! lol We have had a few conversations on this subject. Next time I'm up in that area, we need to grab a cold one!

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    15y

    Well, As a wholesaler myself working for a larger company, though the small time guys can sometimes provide property a little cheaper, they can not get better homes, they dont have the relationships, infrastructure, not licensed, insured, bonded, No real backing, and most likely wont be around in the business for any real length of time. i doubt you would put anyone out of business.

    Mike: wholesaling is a great business and though the entry into it is very low, its not as easy as people make it sound. It takes a long time to truly wholesale a deal. Many people bird dog for others to get some experience. Good luck

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    @ Mike:
    If you want to stand out, what worked for me was. Every deal I sent to an investor buyer included 3 BPO's from seperate agents, a CMA & 3 contractor estimates from seperate contractors. Don't jus look for the highest comps to show the investor either. You have to compare apples to apples.

    @ Curt:
    When you send an investor buyer properties, what due diligence do you have to support your numbers? We always do our own D.D. as well, but it is nice when a wholesaler has their ducks in a row & uses real info.
    Also, do your relationships afford you the ability to offload inventory to buyers at 70% or less of ARV with acquisition, your fee, closing A-B & rehab costs included?
    I hear people say all the time that those deals don't exist... Actually, yes they do. I have just not been able to find any more wholesalers that can get them. We are expanding & I don't have the time to deal with that side of it right now, so good wholesalers that can get these deals are a great addition to our team. Yes they cost us a few bucks on the acquisition side, but if they bring the right deals, its no biggie because we still make our spread.

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  • Mike Kooser Sr
    Pasadena, MD · Member since 2011 · 46 posts · 2 votes
    15y

    Thanks Corry, How hard is it the get the quotes? I guess Im asking what is in it for the agent and contractors?

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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    It wasn't hard. I worked with several agents in different areas & would "spoon feed" them deals so they in turn would provide information for me. Same thing woth contractors. I would use their services so they would provide estimates, info & tips. You can also set up the buyer with the agents & contractors to use their services. That way you are also sending them refferals as well. They appreciate that especially in a market where they dont have alot of work & have to fight for everything they get. They are more apt to give you the "hook ups" when you are throwing them an extra bone here & there. On the other hand, if you just use them & offer nothing in return, they will likely cut you off fairly quickly. It has to be win win for everyone.

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  • Mike Kooser Sr
    Pasadena, MD · Member since 2011 · 46 posts · 2 votes
    15y

    Thats what I was talking about now it makes sense. I understand how to help the contractor but what do you mean by spoon feed the agent? What deals would I be giving them, you dont use an agent when closing right? or did I misunderstand that?

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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    Most good agents have investors looking for deals. You get the deal, they have a buyer... You both get paid! Also, as you venture into rehabbing or whatever, you will inevitably use agents to market your properties on the flip. This is where I would "spoon feed" them. In the mean time, You can find out criteria of their investors, go out & target off market properties that fit thise criteria & bring them to the table. These are deals that the agent would not know about if you did not bring it to them for their investors because the deal was not marketed. These can be short sales, probates, tired landlords or any kind of deals that you find & lock up. Once you have it under contract, you control it & you get paid when you wholesale it & the agent can make money from brining you a buyer.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    15y

    Hey Corry, just saw your thread so I am jumping in as requested.

    I think you know of one investor who is a real wholesaler with real deals, I wont mention his name though :wink:

    Of course I am not soley a wholesaler, in fact, I am a rehabber that on occasion, will wholesale a few deals which are out of my zone or when I have too many at once (which has not been the case lately!)

    I too have experienced what you and many others have, these so-called wholesalers have no clue what they are doing as they over inflate ARV and under-estimate rehab costs.
    I never went as far as providing contractor quotes but will on occassion provide comps. What I do perform is my own due diligence BEFORE I ever lock it up and that DD results in accurate numbers which are verified by my buyers. If I was wrong, they would never buy the deal, so it only pays to be right! :mrgreen:

    Podcast Guest on Show #130
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  • Michael Campbell
    Flipper/Rehabber · Philadelphia, PA · Member since 2010 · 151 posts · 71 votes
    15y

    As a potential wholesaler, I'm having a hard time finding serious buyers. What is the best way of finding a serious cash buyer in my area? I've tried craigslist and Linkedin with little luck so far.

    0Reply
  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    @ Will:
    There you are! lol. I added me D.D. to show where I got my numbers & I noticed that investors liked it so I just implemented it from then on.

    @ Michael:
    Have you sent deals to these "investors"
    If you have, then I would look into you D.D. If your numbers are accurate, then I would question whether they are real or not. Unless the deals you sent them were not in their target areas.

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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    15y

    Michael, set aside an hour then cut/paste this into your google search: finding cash buyers site:www.biggerpockets.com

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  • Op Tek
    Real Estate Investor · Atherton, CA · Member since 2011 · 3 posts · 0 votes
    15y

    A good wholesaler will eventually be faced with two things: (1)they will soon realize that these deals are too good to be passed on to someone else and (2)it would make more financial sense to be the principal buyer because of tax implications - earned income vs capital gain. Eventually a good wholesaler will reach the threshold and pay more taxes as earned income compared to capital gain taxes.

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  • Frank McGovern
    Philadelphia, PA · Member since 2009 · 97 posts · 31 votes
    15y

    I am a wholesaler and an agent and I feel that if you are the type of wholesaler corry is referring to, you wont be in the business that long because you wont be doing deals which in turn will force you out of the business. Im 28, been in the business for less than two years (although not really f/t during the past two years) and have completed 6 wholesale deals. IMO, if you are wholesaler and closing deals, they must be deals. Investors will not buy them unless they are deals (unless they are new and dont know what they are doing).

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  • Stacy Dieckman
    Real Estate Broker · Indianapolis, IN · Member since 2008 · 455 posts · 16 votes
    15y

    Corry,

    I can't seem to find any wholesalers either. I get listed homes that "wholesalers" don't control.

    If you wanted to get back into wholesaling in California and western states I can put you to work full time.

    If anyone has wholesale deals they aren't keeping, I need them. I have cash buyers that tell a friend about a deal and now the friends want in too.

    Stacy

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  • Manny Cirino
    Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
    15y

    As a wholesaler my self I was faced with the difficult task of proving to other investors I was not the average rookie. because I was a carpenter and the contractor I worked for only worked for developers my strong point was estimating repairs.
    I am not unloading 4 deals a weak as the gurus preach, I work 2-3 houses every 3 months & I don't spam my investors email either. So when they hear from me they know I have something good, absense help create anticipation.

    Op is correct I know my deals are good because it hurts me to let them go since I don't have the cash to rehab them.

    The new wholesaler coming in to this need to realize a couple of things;

    1.) This is a people business. At the end of the day working from a computer all day, emailing, researching etc... will not create success. you must socialize in person.

    2.)This is not a get rich quick business. It requires hard work and determination not to quit was a you see a year has past and you haven't maid a cent.

    3.) It does take money to make money. Some people get lucky but not usually marketing does take money. If you want to starts a mailing campaign sure envelopes, paper and ink are cheap but if you have 1,000-3,000 on you list,guess what stamps aren't cheap we are talking $700 - $1,500 just for the first round. Also you have earnest money needed, bandit signs, Gas money, to drive around(this is more important than you think), door hangers, flyers, business cards.

    To the newbies remember that the person you are selling to will always no more than you, they will see right through you.

    2Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    15y

    Great post Manny, good advice to those looking to start out in wholesaling.

    Podcast Guest on Show #130
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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    @ Frank:
    Why would you ussume that a person would not be in business very long by doing it the way I described? It worked great for me & I am still alive & well in this industry. I do agree that wholesaleing is a great way to get started & from there you can venture out into other avenues. I just think that wholesalers need to bring real deals to the table (which you touched on as well). So what am I missing in you annalogy?

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    15y

    I didn't quite understand that point either Corry. Perhaps he ment that if you had deals with such good spreads to wholesale, eventually, you would become a rehabber and not wholesale, thus be out of the wholesale biz, or perhaps he ment something entirely different, I am only speculating.

    I do know that wholesaling, even for a full time rehabber, can help increase some cash flow and fill in some income cracks while awaiting the larger paychecks from flips. It also helps in that it adds an income stream to an already viable business.

    For those starting out without either business going, I always suggest that they learn all there is to know about rehabbing so that the ycan then become a good wholesaler. You cant wholesale property if you don't know what a rehhaber needs or is looking for.

    Podcast Guest on Show #130
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  • Corry Taie
    OP
    Menifee, CA · Member since 2008 · 194 posts · 46 votes
    15y

    Will, I couldn't agree more. Also, ultimately an investor will get to a point where they have more deals than they can handle. Wholesaleing the overflow is way better than being inconsistant with your sources. That will lead to losing a viable source for inventory. The extra cash is great as well.

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  • Vince M.
    Involved In Real Estate · Norco, CA · Member since 2010 · 46 posts · 3 votes
    15y

    Maybe I should hire someone to do it for me & then I can teach them the right way. Then I can make more! Hmmm. I'm thinking expansion.

    Corry, if you're serious about this I am 20 minutes away from Lake Elsinore and would welcome the opportunity to learn the right way from you. I spend a lot of time searching the Inland Empire so it would be great to learn from and work with someone locally.

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  • Stacy Dieckman
    Real Estate Broker · Indianapolis, IN · Member since 2008 · 455 posts · 16 votes
    15y

    Corry and Vince,

    If you guys team up, please send me everything you find.

    Stacy

    0Reply
  • Mark Monroe
    Real Estate Coach · FL · Member since 2018 · 46 posts · 10 votes
    7y

    Wholesalers, question.

    What would you pay for a hot lead from a website, need to sell their home FAST, a lead was delivered to your email in real time? Testing out what people would pay for a good lead.

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