Wholesellers - Stop. Read this. Wholesaling is ...

Cody L. · 2022-04-29T09:44:02-07:00

...Dumb. [Sorry to be mean. My comments as an owner -- rant ahead] Seriously. How much are you guys paying for your "lists". How many of you think buying a list of: owners that got a red tag. owners that got an eviction. owners with an out of state address, etc is going to be the key to finding a distressed buyer. Here is screen shots of texts to my phone. Keep in mind: * I normally delete them. So this is just wants left (I get more)* This only includes texts that have the name "Sebastian" in them (which isn't even my name. It's the guy I sold it to. Which means I get texts about just this one property that are not on here as the 1st name isn't referenced thus didn't show in my search)* I sold this property maybe 15 years ago. It was literally one of my first SFH fix and flips. So daaamn, how out of date can this be? Do you think when you buy your lists to spam, that its not going to be someone that's got 100000 texts, emails, calls already? The lists you buy have out of date info. They're being bought by the same billion other people who saw some post on BP about how to make money with no money. And even if you get a reply, you still have to somehow get it under contract at a price that'll allow you to assign it to someone else (or double close). I just can't think there are people making money in this space. And if there are, it can't be more than 1% of the people. The rest are taking classes ($), buying books ($), buying lists ($), paying for text blasting ($), email blasting ($), having virtual assistance to call and spam people ($). Even if you do get a deal, after you subtract all your costs, what are you making per hour? Now I'm sure of the 1,000,000 readers of BP, a few might comment "Oh you're so wrong. Just last year I assigned a house and made $6,000!". And that's great. But -- and I don't want to sound like the filthy 1%'er I am -- couldn't you have added way more value to your life by spending that time and energy in a different aspect of RE? Enough rant. Here are some texts. Again, this is just for ONE house (that I sold a looooong time ago). And it's just the texts that have the buyers name and the ones I didn't delete. PS: I've actually replied to a few of them. I used to say something like "That's not mine, but if you'd like to offer on something of mine, here is a list of what I have", etc. Or sometimes I'll ask about what list they bought that had the specific property they're asking about. Know how many people replied back? Nearly zero. Which is crazy since if this is a numbers game (blast to 1,000,000 people. Hope 1% reply. Of those, hope 1% you can get under contract. Of that, hope 10% can make $). You'd think any reply would cause an action. But nope. So really -- maybe -- I just don't get it. Maybe I'm the dumb one. Maybe these guys are crushing it and I'm just pounding away on my keyboard on BP like a dork.

Jerryll Noorden

Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes

4y

Quote from @Cody L.:

Quote from @Account Closed:

Why are you lying? What kind of BOO-BOO market you are in buying a house for 10k? I can see you are some wannabe clown probably flat broke living in your Momma's basement Dreaming about the business!. I can't believe you said something DUMB like that buying a house for $10k...You not even in my league rookie you need to go get a job because you have no idea what you are doing "WALMART" is hiring for greeters I'm sure you will be very successful!!!! " THE FLIP KING "......THE KING OF THE FLIP "

Who was this directed to? What is a "BOO BOO" market? Even if you're replying to someone that was disagreeing with me, your tone is a bit harsh.

That was meant for me dude. :D. I handled it already no worries!

I may disagree with you on some things, but I still respect you as a fellow investor. That language simply means he has deeper issues than hating wholesaling...

2 Reply

Tim Deimer

Rental Property Investor · Member since 2021 · 29 posts · 34 votes

4y

@Jerryll Noorden

At the risk of finding out what an idiot I am, here I go...........

I think the word "wholesale" is the issue here. I know Jerryll isn't talking about wholesaling when he actually is buying the property, so I'm not sure why the word is so offensive. If I'm reading it right, Chris Ransom is actually talking about the other side of it, as in people wasting his time bringing deals that couldn't be profitable. I'm sure 75% of the people who are cold calling me couldn't tell me WHAT they are. I will tell you I think they are mostly broke fools who've been separated from their money by snake oil salesmen who've told them easy money stories and sold them lists of "motivated sellers". I'm a big fan of Jerryll on this forum just because I hope some of these wannabes are reading his posts and deciding not to max out their credit card buying a list with my name on it!

For anyone who might be reading this and thinking about buying a list with one of my property addresses on it:

My daughter is not a motivated seller. She doesn't own any real estate, she just happens to be on the same phone plan as me, which I can only assume is how she got tied to that property.

My wife is not a motivated seller. Her name is not even on the deed, partially because our schedules were very different at the time when I bought the property at auction and had to return paperwork in a hurry, but mostly she didn't want her fingerprints on my trainwreck. (Not motivated to buy OR sell!)

I'M NOT a motivated seller either! I bought the property from a motivated seller called IndyMac Bank. Google might remember who they were, if you're interested. I can't imagine that anybody who was buying property in one of the hardest hit cities, in one of the worst markets in my memory, would be considered a motivated seller. I could have sold it at anytime in the last 10 years for a profit, no assistance required!

That one bothers me the most. I paid cash, not knowing when I'd make money on it. Nobody bothered me for about the first four years, then, just when values started increasing, it seemed like the whole state of Arizona wanted it for half of what it was worth. I asked a few of them where they were in 2009, when they could have bought all they wanted for half of what they were offering me. Never got a straight answer. In fact, I only got what seemed like straight answers from one caller in all that time. Every other cold caller seemed clueless, like the dog who caught the bus, no idea what to say if you get them off script. I no longer have voicemail on my phone and don't answer calls from AZ that aren't in my contacts already. The texts don't bother me as much. I used to have a list and I'd add each text to the end of the list and send it back. My list got to 80ish texts and it wouldn't send anymore, so then I made another list that got almost as long before I lost interest and stopped sending them back.

Another one that I get a kick out of is a friend of mine who gets calls and texts wanting to buy his house. The "house" they refer to is 20 acres of swamp land in the middle of nowhere Wisconsin with no building on it. The guy wouldn't sell his hunting land for anything unless you had more acreage with more deer and closer to his home. Not ANY kind of seller, let alone motivated!

Once in awhile I answer my phone and if there's anyone on the other end, (that's less than half the time) they're clueless, many seem to be employees in a call center, some so new to the english language that I'd have a hard time understanding them if I wasn't more familiar with their script than they are. Sometimes I answer "can I buy your house?" Then they go into their pitch and I say "I asked you first!" I get the feeling most of them don't have a house to sell me. One time my phone rang during a commercial in the middle of Jeopardy and I answered. When the guy told me which property he was interested in, I said "you call me in the middle of Jeopardy and expect me to give you a deal on a house? Who do you think you are?!" His script didn't have an answer for that one! I do make a point of telling people I wouldn't sell to a cold caller no matter how desperate I got.

Jerryll, I don't care what anyone else says about you, you're doing the Lord's work if you can reach more than one person at a time and convince them to stop wasting money on bogus lists!

1 Reply

KT Burkholder

Investor · Member since 2021 · 11 posts · 17 votes

4y

The issue isn't that wholesaling doesn't work, it is that it is done backwards and wrong. This is like saying being a real estate agent doesn't work because most agents suck at what they do. I have bought 4 deals from wholesalers so far this year and I have also wholesaled 6. To many people are trying to wholesale the same property and to few have relationships with their buyers. All of my deals have come because someone knew that a property they contracted was already in my buy box, and same in return. It is about referring not about hunting IMO.

2 Reply

Jeremy Gaal

Rental Property Investor · Colorado Spgs, CO · Member since 2020 · 91 posts · 61 votes

4y

@Cody L. I have to laugh because these have started picking up, especially on one of my properties in particular. It's basically a every 3 occurrence that I get a call or text regarding that property in particular. I hope those wholesaling make theirs, but at the same time I'm on every do not call list I can sign up for. Also, why would I want to sell it wholesale when I could just dump it on the market for way more $. All of this to say I feel this post in my soul.

1 Reply

Dustin P.

Realtor · Tempe, AZ · Member since 2017 · 541 posts · 442 votes

4y

Oh my!

0 Reply

Jose Vazquez

Rental Property Investor · Reading, PA · Member since 2017 · 40 posts · 25 votes

4y

I made well over 6 figures wholesaling last year. This month I made about 27,675.00 on just two deals. I’m not saying it’s easy but if you have your systems right it can be very lucrative. Maybe it’s my market. Idk. I love it tho. And yes. My main marketing channel is SMS. And my overhead is a small fraction of how much I’ve made this month alone. I’m just going to keep minding my business and keep plugging away. Lol

5 Reply

Al D.

Investor · San Francisco, CA · Member since 2017 · 303 posts · 327 votes

4y

Quote from @Jose Vazquez:

I made well over 6 figures wholesaling last year. This month I made about 27,675.00 on just two deals. I’m not saying it’s easy but if you have your systems right it can be very lucrative. Maybe it’s my market. Idk. I love it tho. And yes. My main marketing channel is SMS. And my overhead is a small fraction of how much I’ve made this month alone. I’m just going to keep minding my business and keep plugging away. Lol

I believe that the thesis of this post is not that all wholesaling does not work, rather that what the OP has to deal with from the telemarketers (wholesalers, some of whom may claim to be “investors”) are inquiries that could not possibly lead to a sale - they have bad lists. I agree with that thesis, and you probably do, too.

Since wholesaling works for you - and your main marketing channel is SMS - would you mind sharing: (a) Who provides your target list?; (b) What criteria do you use for/expect your list to represent?; (c) Do you check the numbers against the federal and/or the Commonwealth’s DNC list before you contact them?; (c.1) or do you consider that SMS is not in violation of either law? (d) How many phone numbers do you use for yourself to send the SMS from, and how often do you retire them?

I kinda don’t (reasonably) expect you to answer all of the above, but as much as you may feel comfortable with is fine. Thank you

1 Reply

Mitch Kennedy

Rental Property Investor · Waupaca, WI · Member since 2018 · 89 posts · 30 votes

4y

who hurt @Account Closed?

0 Reply

Tim McGarvey

Rental Property Investor · Napa, CA · Member since 2016 · 68 posts · 57 votes

4y

Wow - some interesting and polarizing thoughts here. It seems like the majority of the backlash against wholesaling here is because of the common techniques being used (and pushed by "gurus") below:

Spammy marketing methods - SMS, cold calls, and RVMs
Underqualified people - a VA or someone who just took a course
Poor data - a shotgun approach instead of contacting potentially motivated sellers

Spammy texts and wholesaling are not mutually exclusive. My team closed 12 wholesale deals last month. We sent 0 SMS, cold calls, or RVMs to get those deals. My acquisitions team is USA based with minimum of 10 years sales training. There IS a market need for wholesaling, but we certainly have reached a point where these "gurus" are exploiting the system with these short-sighted teaching strategies.

The annoying wholesalers you're describing either 1) bought a course and don’t know what they're doing or 2) have poor ethics. Eventually this saturation in low-quality players will lead to more regulation - which I believe will be a net benefit. The barriers to entry will become higher and the fly-by-the-night guys will be filtered out (will move on to crypo, etc)

Wholesaling is due for a re-set but there will always be a place in the market for companies that can streamline the closing process with cash.

3 Reply

Cody L.

OP

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

4y

Quote from @KT Burkholder:

The issue isn't that wholesaling doesn't work, it is that it is done backwards and wrong. This is like saying being a real estate agent doesn't work because most agents suck at what they do. I have bought 4 deals from wholesalers so far this year and I have also wholesaled 6. To many people are trying to wholesale the same property and to few have relationships with their buyers. All of my deals have come because someone knew that a property they contracted was already in my buy box, and same in return. It is about referring not about hunting IMO.

Fair enough. Maybe I should have said "The way that 99% of these guys wholesale is dumb". i.e. spending $ on lists that 1,000,000 others are already blasting to. Spending $ on lists that people are blasting to AND have old and out-of-date info. Spending $ on virtual calls with no plan on what to do if you get a reply.

If I was to start over from scratch with $0, I'd laser focus on a submarket. Get to know all the buyers. Meet the brokers. Build a database of owners. Meet with them. Find actual distress and talk to them directly about their situation. Put buyer and seller together. Or work with buyers for a fee for each deal I bring them.

There are so many better ways then what these gurus pitch to gullible people.

1 Reply

Cody L.

OP

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

4y

Quote from @Jeremy Gaal:

@Cody L. I have to laugh because these have started picking up, especially on one of my properties in particular. It's basically a every 3 occurrence that I get a call or text regarding that property in particular. I hope those wholesaling make theirs, but at the same time I'm on every do not call list I can sign up for. Also, why would I want to sell it wholesale when I could just dump it on the market for way more $. All of this to say I feel this post in my soul.

The greatest feature to ever hit iOS is 'scilence unknown callers'. basically if a caller isn't in your contacts, it goes to voicemail. So my voicemail says "I don't check voicemail, text me and I'll call you back". That filters out 99% of the spam. Also means if I get a voicemail, I know it's spam since who leaves a voicemail after just hearing it's not checked?

Anyway, on the rare occasion I turn it off (maybe because I'm expecting a call from someone at the city or a bank that'll come in from a main landline that's not in my contacts) I'll start getting the spam calls.

My favorite thing to do: Tell them "Oh, thanks for calling. Can you give me just a second?". Then I put my phone down and just continue to work while they're on 'hold'. Till they give up and hang up. I figure I've done my micro part to tie up a spammers time for a while.

3 Reply

George Munoz

Real Estate Agent · Fort Lauderdale, FL · Member since 2018 · 360 posts · 213 votes

4y

Quote from @Account Closed:

Why are you lying? What kind of BOO-BOO market you are in buying a house for 10k? I can see you are some wannabe clown probably flat broke living in your Momma's basement Dreaming about the business!. I can't believe you said something DUMB like that buying a house for $10k...You not even in my league rookie you need to go get a job because you have no idea what you are doing "WALMART" is hiring for greeters I'm sure you will be very successful!!!! " THE FLIP KING "......THE KING OF THE FLIP "

Is not about the market is about finding an opportunity . maybe he got it at pre tax auction.. on a owner absentee situation or inherent. Is possible. is been done and I have been able to see it on close friends and colleagues.. I ve been able to get a house around 80k and ARV 375k ... or even another scenario purchase 145k wholesale 289k and buyer sold for 575k ... win win for all , the seller , need it probate on a sudden dead siblings on other estate and elderly , no time for fixer upper, it was a win win for all.

and the cool thing , having first dips while acquiring the deals , if is juicy enough you can get it for yourself. also develop great relationships with other local investors , ( a great happy community , cos everyone is making money and also providing solutions to distressed sellers) .

1 Reply

Patrick Kaiser

Real Estate Agent · Mesa, AZ · Member since 2020 · 46 posts · 76 votes

4y

What you said is "Wholesaling is dumb"

What you assumed, all of which is wrong:

99% of wholesalers or getting clients this way (wrong)

All wholesalers all spamming people (wrong)

They all do a few deals a year (wrong)

They should just do something else (opinion, and like saying that nobody should do any job except for the one that you do)

Most are watching courses and getting lied to (wrong)

I'm not even a wholesaler, I just dislike when people who know nothing about an industry bash on it. And yes, just because you are a rental property investor does not mean you know anything about other areas of real estate. I get calls asking if I want to buy car insurance. Does that mean Warren Buffet is stupid for owning Geico? I mean if somebody is spamming people selling insurance clearly every insurance agent is stupid and insurance brokers are not a real job.

3 Reply

Matthew Irish-JonesBusiness Member

Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes

4y

Quote from @Cody L.:

Quote from @Jeremy Gaal:

@Cody L. I have to laugh because these have started picking up, especially on one of my properties in particular. It's basically a every 3 occurrence that I get a call or text regarding that property in particular. I hope those wholesaling make theirs, but at the same time I'm on every do not call list I can sign up for. Also, why would I want to sell it wholesale when I could just dump it on the market for way more $. All of this to say I feel this post in my soul.

The greatest feature to ever hit iOS is 'scilence unknown callers'. basically if a caller isn't in your contacts, it goes to voicemail. So my voicemail says "I don't check voicemail, text me and I'll call you back". That filters out 99% of the spam. Also means if I get a voicemail, I know it's spam since who leaves a voicemail after just hearing it's not checked?

Anyway, on the rare occasion I turn it off (maybe because I'm expecting a call from someone at the city or a bank that'll come in from a main landline that's not in my contacts) I'll start getting the spam calls.

My favorite thing to do: Tell them "Oh, thanks for calling. Can you give me just a second?". Then I put my phone down and just continue to work while they're on 'hold'. Till they give up and hang up. I figure I've done my micro part to tie up a spammers time for a while.

Occasionally if I am in the car and know I have a long drive ahead of me I will engage with a wholesaler. Its funny because if you tell them you are a motivated seller and are ready to go, you still can't get patched through to their "Acquisition specialist" you just keep getting the run around. The Filipinos are only instructed to be able to get a name and number and set a call up later, they can't even get a hot lead to someone who can actually make a real offer... at least from my experience.

The entire system is set up to be horribly inefficient, and has a such a low probability of working or getting a legitimate investor to sell a property, that you really have to wonder who was behind creating it.

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5 Reply

Cody L.

OP

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

4y

Quote from @Matthew Irish-Jones:

Quote from @Cody L.:

Quote from @Jeremy Gaal:

@Cody L. I have to laugh because these have started picking up, especially on one of my properties in particular. It's basically a every 3 occurrence that I get a call or text regarding that property in particular. I hope those wholesaling make theirs, but at the same time I'm on every do not call list I can sign up for. Also, why would I want to sell it wholesale when I could just dump it on the market for way more $. All of this to say I feel this post in my soul.

The greatest feature to ever hit iOS is 'scilence unknown callers'. basically if a caller isn't in your contacts, it goes to voicemail. So my voicemail says "I don't check voicemail, text me and I'll call you back". That filters out 99% of the spam. Also means if I get a voicemail, I know it's spam since who leaves a voicemail after just hearing it's not checked?

Anyway, on the rare occasion I turn it off (maybe because I'm expecting a call from someone at the city or a bank that'll come in from a main landline that's not in my contacts) I'll start getting the spam calls.

My favorite thing to do: Tell them "Oh, thanks for calling. Can you give me just a second?". Then I put my phone down and just continue to work while they're on 'hold'. Till they give up and hang up. I figure I've done my micro part to tie up a spammers time for a while.

Occasionally if I am in the car and know I have a long drive ahead of me I will engage with a wholesaler. Its funny because if you tell them you are a motivated seller and are ready to go, you still can't get patched through to their "Acquisition specialist" you just keep getting the run around. The Filipinos are only instructed to be able to get a name and number and set a call up later, they can't even get a hot lead to someone who can actually make a real offer... at least from my experience.

The entire system is set up to be horribly inefficient, and has a such a low probability of working or getting a legitimate investor to sell a property, that you really have to wonder who was behind creating it.

Exactly right. It's such a numbers game. A very high amount of calls/text to get a very small % of real sellers. And an even smaller % of sellers who have a deal that makes sense and will get done.

So you'd assume if they had a hot lead they'd latch on like grim death and get someone to take care of it asap. But their only job is to take down #'s of 'warm leads' and send them to whatever guru client paid them for their service.

2 Reply

Cody L.

OP

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

4y

Quote from @Patrick Kaiser:

What you said is "Wholesaling is dumb"

What you assumed, all of which is wrong:

99% of wholesalers or getting clients this way (wrong)

All wholesalers all spamming people (wrong)

They all do a few deals a year (wrong)

They should just do something else (opinion, and like saying that nobody should do any job except for the one that you do)

Most are watching courses and getting lied to (wrong)

I'm not even a wholesaler, I just dislike when people who know nothing about an industry bash on it. And yes, just because you are a rental property investor does not mean you know anything about other areas of real estate. I get calls asking if I want to buy car insurance. Does that mean Warren Buffet is stupid for owning Geico? I mean if somebody is spamming people selling insurance clearly every insurance agent is stupid and insurance brokers are not a real job.

That's a lot of words to say "I'm the one that's texting you"

(jk)

1 Reply

Jerryll Noorden

Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes

4y

Quote from @Tim Deimer: