​Why so hard to find wholesalers in Las Vegas?

[Jason R.]

Most people don't realize there are legit Las Vegas wholesalers, so I'm going to provide a realistic perspective as to why and explain how I know.

Experienced wholesalers don't need to build buyers lists and frankly most aren't interested in adding anyone to their buyer list. Why? They have established a limited amount of reliable buyers that pay top dollar, and it doesn't make sense to deal with new buyers that very likely can't compete with the existing ones - they'll just eat up valuable time. These wholesalers don't post deals publicly or blast out to large buyer lists because there's no need. And this is why most are unaware that there are plenty of local wholesale deals going around every single week.

What are the attributes of their buyers?

• Respond very quick
• Can close with cash as quick as needed
• Don't need to view the property in person to make an offer
• Don't care how much $ the wholesaler makes
• Stay true to their word
• Have flipping systems in place
• Don't require large ROI per deal

In other words, they're reliable and pay top dollar.

How am I qualified to know this?

I have a biz partner and when we started wholesaling in Vegas, we blasted out the deals to our combined buyers list of around 150 investors. Most people wouldn't respond, some would just ask questions, some would make ridiculous offers, but a handful rose to the top (see attributes above) so we started working only with them.

We ended up partnering with our best buyer so we could start taking down deals instead of needing to wholesale them. Newer wholesalers love working with us to learn and earn, but even with the backing to take down a deal in days, usually paying more than any other buyer, it's still wasn't easy to convince established wholesalers to bring deals to us.

I hope this is helpful for people thinking they'll be able to come to Vegas and pay a wholesaler 70% ARV minus rehab. It's just too competitive here and it's much smaller than a market like Phoenix (which is also very competitive). If you want to actually get deal flow sent your way, you'll have to accept less profit and prove you have the attributes above. This is easiest for buy and hold investors since they won't have selling costs, but the other options are finding deals yourself, or working with newer wholesalers that haven't (yet) connected with top buyers.

Just to give you a perspective of what it currently takes to compete with buyers in Las Vegas, I used to send deals to one of the largest volume flippers in town that operates in multiple markets and doesn't need large margins, and their offers were never on the same level as the top 3-5 I would receive.

If you are able to get sent a deal from a legit wholesaler, you better analyze right away, make a legitimate offer with thinner profit margins, and follow through if it gets accepted.

This post isn't meant to deter anyone. I just wanted to share a realistic view that I don't ever see mentioned. Hope the info is useful and feel free to ask questions.

By the way, the LV metro area also includes Henderson, North Las Vegas, Boulder City, and some people extend to Pahrump, Mesquite and a few others.

Happy investing!

[Robert Rayford]

@Jason R., Very well said !

[Omar Merced]

Great post Jason. Most people don't realize that most wholesalers have and only need 3-5 people that they work with because they know that they can and will close. Thats why I find it entertaining when I get a new wholesaler asking a lot of questions and when I ask if they have a deal they say they are building their buyers list. Also, there is always the bigger fool theory. Marketed correctly to the wrong person and someone will overpay. I recently had someone outbid me $20k. Based on my numbers it was already tight. Those individuals might get burned and then say that flipping  doesn't work. 

I do have a counter point as far as the thinner margins. I don't necessarily agree. I think that we all need to stick with our models, however, you need to adjust to the market. Las Vegas is hot and will be for the next couple of years (in my opinion). I have lowered our margin spread but even with that I will not go any lower than my current spread because I have flipped a few houses and I know that if you cross that threshold and something goes wrong  (and eventually something will always go wrong) you will be lucky to get out unscathed. 

[Robert Adams]

Finding a good wholeseller is harder than finding a good buyer.

So many wholsellers fluff numbers and offer deals that are no better than what you find on the MLS.

A good wholeseller is worth their weight in gold. 

[Robert Rayford]

Posted Last Year and Still Relevant:.....I was averaging 3-5 calls per day from Las Vegas wholesalers wanting to peak my interest in their deals, most of the time on the same property . lol . Around the 3rd quarter of last year the calls started to slow down then stopped. I know the market out in Vegas has tighten up considerably and the inventory in the Class C and B properties has shrunk, at least for the flipping market. I am wondering if it is do to the onslaught of "real estate Guru's" that rushed to the area to teach their wholesaling systems or the Dodd-Frank Law's fault . I drive through the city's neighborhoods and on any given block I can find multiple properties in distress, zombie, vampire, abandoned, squatted, boarded or any other term you would like to describe these homes. Yes. I understand that there are many different reasons that a property may go into one of the above categories but come on, they all can't be locked up in some weird note issue by a lender that has folded or was foreclosed without proper process. Are all the wholesalers choosing the easy path by posting sign's and banners on poles? Or could it be possible that the Vegas wholesalers top 1% with a established pipeline has control of 90% of the market. And since when is property considered a " wholesale deal " when it is offered at 80% of retail....? I would like to hear from the other investors here in Vegas on what you think on this issue. If you are a wholesaler chime in. 

[Rochelle Ray]

I was not in the LV market very long before I moved so I don't feel I can have a valuable input into this conversation other than these few points (although I would point out I love the above posts and agree with the majority of them).  My first observation is, compared to other areas of the country, yes, LV does have tight numbers to make it hard for wholesalers but that doesn't mean it can't be done and I agree with Omar that you shouldn't change your model much to adjust for the market because your time is valuable and worth something but It is my opinion, and it is only an opinion, it is better to do less deals with quality than a bunch of deals not worth your time.  Again, time is valuable.  So I think new or part-time wholesalers may not survive very long in LV.  I physically moved with my husbands job unexpectedly and I found LV is too difficult to do from afar with all the competition.  I'd rather refer.  

Second observation as to why it may also be hard for wholesalers in LV is all the new guru's selling how easy it is to never leave your desk to make a buck by wholesaling.  What a joke!  Do people not care about their reputation anymore?  I would never put my name behind a product that I didn't know at all.  I know wholesalers do it all the time but not ok in my book.  So now you have an influx of new wholesalers who want to make a quick buck and realize it actually takes work and time and you actually have to know a little something about real estate and maybe even construction!  Then with the numbers tight, they get frustrated and think it just won't work, they can't find anything or there is just too much competition and they give up.  So sorting through a lot of bad ones to find a good one is tough.  It is sad to have the HGTV effect but I think it will go away in a few years.  Maybe after another downturn? 

Hopefully the ones who truly love it will stay and learn from you guys! 

[Robert Rayford]

@Rochelle Ray, You are correct to say that the wholesaling market is much more work then sitting at a desk flipping paper. Only a handful of wholesalers will survive this summer, with the market so heavy with newbie's and the educated public only the most driven will stick around. To be honest West Coast investors ( California, Oregon and Washington)  are major players in a lot of the markets and as the their markets top the Vegas market will adjust accordingly.  

[Erik Schneider]

Al l very good bits of information.  Especially for someone like myself who is new to the game and has a lot to learn about the Las Vegas market.  Its scary to think that in order to establish a good network of wholesales one must cut margins so thin.  As a new investor, its understandable why some people say that you cant make money.  These people only try a few times without a solid network to back them and end up losing. 

[Jason R.]

@Erik Schneider It can definitely be intimidating but we know that everyone has to start somewhere. There are plenty of markets where you can get much more favorable margins from wholesalers but I know that doesn't help much for people who are living in Vegas and want to make it happen here. 

My personal thoughts for newer investors that want to begin flipping in Vegas are that they need to go out and source their own deals. Talk to neighbors in areas that are ripe for flipping to see who in the neighborhood might be good prospects, buy lists to door knock and call and mail, find a hungry agent that will submit lots of offers on your behalf. The best deals starting off typically come from relentless efforts. In order to obtain favorable margins, it takes work but it pays off when all those efforts lead to tens of thousands in profit from a single deal. Then those profits can make it much easier to find the next deal since a lot of the efforts can be outsourced. 

It's wonderful when the hustle keeps snowballing positively but most people underestimate the initial efforts needed to get there and/or are unwilling to be tenacious enough.

[Jay Hinrichs]

Originally posted by @Jason R.:

@Erik Schneider It can definitely be intimidating but we know that everyone has to start somewhere. There are plenty of markets where you can get much more favorable margins from wholesalers but I know that doesn't help much for people who are living in Vegas and want to make it happen here. 

My personal thoughts for newer investors that want to begin flipping in Vegas are that they need to go out and source their own deals. Talk to neighbors in areas that are ripe for flipping to see who in the neighborhood might be good prospects, buy lists to door knock and call and mail, find a hungry agent that will submit lots of offers on your behalf. The best deals starting off typically come from relentless efforts. In order to obtain favorable margins, it takes work but it pays off when all those efforts lead to tens of thousands in profit from a single deal. Then those profits can make it much easier to find the next deal since a lot of the efforts can be outsourced. 

It's wonderful when the hustle keeps snowballing positively but most people underestimate the initial efforts needed to get there and/or are unwilling to be tenacious enough.

volume play..  but most don't have the back end to do volume  ergo that's why they never get deals from guys like you..  

I was at a conference in San Deigo and talking to a high volume flipper in LA that of course is competitive  700k average exit  15k average net profit after all over head and cost of marketing etc... so who is going to do that.. well they do because hey did 70 last year.. still tough way to make 1million dollars.. with a boat load of risk..  Better to switch over to be a lender or real estate agent take no risk and make about the same amount of money.. ONCE established.  

[Rebecca Knox]

Originally posted by @Jason R.:

Most people don't realize there are legit Las Vegas wholesalers, so I'm going to provide a realistic perspective as to why and explain how I know.

Experienced wholesalers don't need to build buyers lists and frankly most aren't interested in adding anyone to their buyer list. Why? They have established a limited amount of reliable buyers that pay top dollar, and it doesn't make sense to deal with new buyers that very likely can't compete with the existing ones - they'll just eat up valuable time. These wholesalers don't post deals publicly or blast out to large buyer lists because there's no need. And this is why most are unaware that there are plenty of local wholesale deals going around every single week.

What are the attributes of their buyers?

• Respond very quick
• Can close with cash as quick as needed
• Don't need to view the property in person to make an offer
• Don't care how much $ the wholesaler makes
• Stay true to their word
• Have flipping systems in place
• Don't require large ROI per deal

In other words, they're reliable and pay top dollar.

How am I qualified to know this?

I have a biz partner and when we started wholesaling in Vegas, we blasted out the deals to our combined buyers list of around 150 investors. Most people wouldn't respond, some would just ask questions, some would make ridiculous offers, but a handful rose to the top (see attributes above) so we started working only with them.

We ended up partnering with our best buyer so we could start taking down deals instead of needing to wholesale them. Newer wholesalers love working with us to learn and earn, but even with the backing to take down a deal in days, usually paying more than any other buyer, it's still wasn't easy to convince established wholesalers to bring deals to us.

I hope this is helpful for people thinking they'll be able to come to Vegas and pay a wholesaler 70% ARV minus rehab. It's just too competitive here and it's much smaller than a market like Phoenix (which is also very competitive). If you want to actually get deal flow sent your way, you'll have to accept less profit and prove you have the attributes above. This is easiest for buy and hold investors since they won't have selling costs, but the other options are finding deals yourself, or working with newer wholesalers that haven't (yet) connected with top buyers.

Just to give you a perspective of what it currently takes to compete with buyers in Las Vegas, I used to send deals to one of the largest volume flippers in town that operates in multiple markets and doesn't need large margins, and their offers were never on the same level as the top 3-5 I would receive.

If you are able to get sent a deal from a legit wholesaler, you better analyze right away, make a legitimate offer with thinner profit margins, and follow through if it gets accepted.

This post isn't meant to deter anyone. I just wanted to share a realistic view that I don't ever see mentioned. Hope the info is useful and feel free to ask questions.

By the way, the LV metro area also includes Henderson, North Las Vegas, Boulder City, and some people extend to Pahrump, Mesquite and a few others.

Happy investing!

 DROP THE MIC JASON R!!!!!! So well put. It isn't always about the money/bidding wars--there is a lot to be said about ease of doing business and trustworthy relationships. 

[Ronny Long]

@Robert Adams

Thank you Robert well said...

We all looking to feed our Familys don't forget,

Remember too remember you're Beginings...

[Krystale Moore]

Great information!

[Eliott Elias]

Get on Facebook on your local investor pages and ask who the wholesaler are in the group. They will show themselves