Buying from wholesalers or directly from sellers

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James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 713 votes
1w

Wholesalers, and it is not close for me — deal flow is the bottleneck, not capital. I run 236 properties in Memphis, all BRRRR single-family, and I buy under $100K in my ZIP codes: 38109, 38111, 38112, 38114, 38116, 38117, 38118, 38122, 38128. A good wholesaler who knows that box brings me deals I can underwrite in minutes: buy price, rehab to convert it to a 3BR or 4BR, ARV $180K to $265K, rent $1,395 to $1,950, check the 1% rule, done. I do not put earnest money down, and I do not chase every lead source myself. My time is worth more underwriting and closing than pulling lists. Pay the wholesaler when the numbers work.

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 713 votes
    1w

    Wholesalers, and it is not close for me — deal flow is the bottleneck, not capital. I run 236 properties in Memphis, all BRRRR single-family, and I buy under $100K in my ZIP codes: 38109, 38111, 38112, 38114, 38116, 38117, 38118, 38122, 38128. A good wholesaler who knows that box brings me deals I can underwrite in minutes: buy price, rehab to convert it to a 3BR or 4BR, ARV $180K to $265K, rent $1,395 to $1,950, check the 1% rule, done. I do not put earnest money down, and I do not chase every lead source myself. My time is worth more underwriting and closing than pulling lists. Pay the wholesaler when the numbers work.

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    • Araltan Mandzhiev
      OP
      New to Real Estate · Member since 2024 · 8 posts · 0 votes
      1w

      Thanks, James — really clear box, appreciate you sharing it.
      Just so I understand it right: when a good wholesaler brings you a deal, does he bring it to you already worked out — buy price, rehab to 3BR/4BR, ARV, rent, 1% rule check — or does he just bring you a lead that fits your box, and then you do all of those checks yourself in minutes and decide whether to make an offer or not?
      Trying to get clear on where the wholesaler's job ends and your underwriting starts.

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  • Lee Futcher
    Technology · Vancouver, BC · Member since 2026 · 219 posts · 54 votes
    1w

    Both work, and James makes a good point: a wholesaler who knows your buy box saves you a lot of digging.

    If you go direct, the list matters less than what happens after it. The leads come from public records: probate, code violations, tax delinquent and absentee owners.

    What I’ve seen make the difference:

    1. Most direct deals close on a later touch, not the first, so every lead gets a next follow-up date.

    2. Answer every inquiry fast. Sellers usually work with whoever calls back first.

    3. Keep everyone on one list so nobody goes cold after one try.

    Going direct pays more, but only if the follow-up never stops.

    How many hours a week can you give to follow-up?

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    • Araltan Mandzhiev
      OP
      New to Real Estate · Member since 2024 · 8 posts · 0 votes
      1w

      Thanks, Lee — appreciate you sharing that. The point about follow-up making the difference, and most direct deals closing on a later touch, not the first, is a useful one to keep in mind. Thanks also for laying out where direct leads come from — probate, code violations, tax-delinquent, and absentee owners. Appreciate the input.

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 713 votes
    1w

    My underwriting always starts with me, Araltan. A good wholesaler brings the house, the price, access, and honest condition — not a finished analysis. I never take another man's ARV or rehab number. Then the checks are mine and they are fast because the box is narrow: single-family under $100K in my nine Memphis ZIP codes, sold comps for an ARV of $180K to $265K, a layout that converts 2/1 to 3/1 or 3/1 to 4/2, and Section 8 rent of $1,395 to $1,950 for 3BR+ so it clears the 1% rule all-in. So the split is simple: the wholesaler's job is a real deal at a real price. Mine is the verdict.

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    • Araltan Mandzhiev
      OP
      New to Real Estate · Member since 2024 · 8 posts · 0 votes
      3h

      Thanks, James — and sorry for the late reply, I only just saw this, I didn't get a notification.
      That split is clear now: the wholesaler brings the house, the price, access, and honest condition, and the verdict is yours. And never taking another man's ARV or rehab number — that's a rule I'll keep in mind. Thanks again for spelling it out.

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    6d

    I think newer investors should work with an agent to help purchase their first property on the market.

    The agent will walk through the buyer and see potential issues with a property.

    Buying from a wholesaler off-market provides more risk. This route is better suited for a more experienced investor, imo.

    [email protected]917-280-8544
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    • Araltan Mandzhiev
      OP
      New to Real Estate · Member since 2024 · 8 posts · 0 votes
      3h

      Hi @Basit Siddiqi — sorry to post this here, I tried to connect to message you directly but I couldn't, so I'll ask here instead.
      Thanks for your reply on my post. I noticed on your profile you list 44 doors, so I'm curious: how did you acquire yours? Was it mostly on-market through an agent, like you were advising for newer investors, or did you also buy off-market — direct from sellers, or from wholesalers?
      Just trying to understand if your advice is what worked for you personally, or more general caution for someone starting out. Thanks for any detail you're willing to share.

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  • Muhammad LuqmanPro Member
    Specialist · Member since 2026 · 16 posts · 1 vote
    6h

    Araltan, I think both approaches make sense, depending on your available time, acquisition team, and marketing budget.

    A good wholesaler can save you hours of sourcing and initial conversations, while going directly to homeowners gives you more control over the relationship and acquisition process.

    From the Local SEO side, I've worked with companies like House Heroes and Cash House Buyers DFW on improving online visibility for motivated seller searches.

    The advantage of organic search is that homeowners can find your business when they're actively looking for a cash buyer. But you still need strong follow-up, honest offers, and a clear buying process to turn those enquiries into deals.

    Are you looking to build your own direct-to-seller lead system or mainly purchase properties from wholesalers?

    1Reply
    • Araltan Mandzhiev
      OP
      New to Real Estate · Member since 2024 · 8 posts · 0 votes
      3h

      Hi @Muhammad Luqman, thanks for your reply — the point about time, team, and budget makes sense.
      I'd be interested to talk privately about how SEO / organic lead generation could work for what I'm building in Sacramento for motivated sellers. I tried to message you directly but I couldn't connect first — could you send me a colleague request so I can DM you?

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