Wholesaling a wholesale deal to a wholesaler? Help!

Real Estate Agent · MI · Member since 2022 · 4 posts · 15 votes

Hey BP community!

I'm new to investing, but I have been in the real estate industry for a year. I always keep an eye out for deals, so on top of driving for dollars, I am subscribed to a wholesaler's email list in my area. The email list sends deals regularly, and they are often good deals (yes, I run the numbers). However, I recently found these programs such as Easy Knock and Offerpad who buy homes for cash. I was thinking about going under contract with one of the wholesale deals and then wholesaling that to one of those companies. Has anyone ever tried to get a home under contract and sell to an ibuyer?

(For legality of wholesaling this would be taking place in Michigan)

Thanks for any and all advice :)

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Duane Alexander

Investor · Atlanta, GA · Member since 2020 · 253 posts · 240 votes

iBuyers won't buy from wholesalers. You have to take these deals down and hold them for a couple of months I believe.

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Duane Alexander
Investor · Atlanta, GA · Member since 2020 · 253 posts · 240 votes
4y
iBuyers won't buy from wholesalers. You have to take these deals down and hold them for a couple of months I believe.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
4y
Correct, iBuyers will only deal with principles, not wholesalers.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
4y
@Andrea Bonds If you can find deals, from wholesalers or anywhere else, you should be able to find buyers to match them with and earn a commisison or fee. It should legally be run through your broker though, so you may need to sign an addendum to you agent contract.
So, your first response will probably be, "this isn't possible"!
Well, If you read enough posts on this forum, you'll find there are MANY so called investors that make questionable purchase decisions - and then come here to BP asking for help to get out of the mess they blindly jumped into.
If you can build a system to efficiently evaluate wholesale deals and then market them to an audience, including here on BP, then you can create a business for yourself. It won't be easy and will take several months to gain traction, but aren't you already experiencing that challenge with your real estate career in general?
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Nick C.
Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
4y
If they're good deals why not buy them for yourself? And if you do buy them, you could still try to sell to an iBuyer after you become the principle.
Also if you're looking for deals you should try to subscribe to all the wholesaler's lists, not just one.
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Andrew Moore
Real Estate Agent · Grand Rapids, MI · Member since 2016 · 89 posts · 51 votes
4y
This is a little tricky. There is a current case going on right now where a licensed agent in michigan represented a seller, and brought a buyer for that property. The agent then represented the now Seller of that property, and had the property listed for almost double what it was listed for in the same condition, shortly after.
I'm not saying this because it is the same circumstances, but as a licensed agent in the state of michigan we are bound by certain obligations to those we are purchasing from. So in this case if you can get it for a $100k, but you know you can sell it immediately following for $250k, according to most Realtor associations & NARs code of ethics, you would need to disclose to the person that you are pruchasing that well below what the market rate would be, and where you might sell it.
With all of that being said, if you tell them they could theoretically list that for $250k, but you have someone who could close quickly, and give them $100k for it you can absolutely do that. You just have to be more transparent than others may be able to be in the same scenario. One of the downsides to doing wholesaling as a licensed agent, is if you are a part of any number of organizations you just need to disclose certain information to keep things above water.
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Will BarnardPro Member
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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
4y
First, I don’t think any seller would agree to take $100k for their property if you disclosed to them that the current market value in as is condition was $250k. No matter what, that would be fraud or a really ignorant seller and it is the duty of the agent representing seller to protect their interests. On the other hand, if your buyer offered $100k cash, quick close and you disclosed to the seller the market value would likely be $150k, then maybe that would fly for ease of transaction and efficiency of closing if that is actually what the seller needed.
Fiduciary duties and disclosures take precedence in these scenarios. Fail on either front and be prepared to face legal consequences (and perhaps criminal in some circumstances).
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