Is this an end to Wholesaling?

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Is this an end to Wholesaling?

Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes

Bigger pockets just released an article that goes into Wholesaling and how it can become illegal to Wholesale Real Estate in South Carolina.

Here is the link for reference:

https://www.biggerpockets.com/blog/new-south-carolina-law-wo...

Wholesaling real estate seems like a great strategy but with that strategy, I've seen a lot of fishy characters who promote things that aren't true, lie to sellers directly, lie to Buyers and intentionally misrepresent information. Some of this misrepresented information includes things like after repair values, repair costs, rental comps and more. 

I have even encountered wholesalers who push properties with title issues onto buyers that are not knowledgeable enough to understand that this issue could be a very serious problem. 

A lot of the pitch that wholesalers make to sellers is that they were going to be buying a property with cash, even though they have no cash. So if they don't end up finding a buyer to reassign the contract to, they just lied to the seller and wasted their time. 

Again, this is not to bash on all wholesalers, because I do believe that there are some decent people out there. That being said, the majority of my experience comes from people who are pushy salesman who try to get you to buy something. 

At the end of the day, wholesaling real estate is like getting a net listing for a real estate agent. Except the real estate agent discloses that they will be making the difference upfront and not lying to the seller about buying their property for cash. 

That being said, in many states and jurisdictions net listings are actually illegal. 

My personal opinion was that a lot of this Wholesaling activity couldn't go on much longer. There had to be a breaking point, where unlicensed and unaccredited individuals could be handling real estate transactions. Lots of these individuals didn't have mentors or licensed professionals to help guide them through a transaction process. And on top of that I have seen files were there has been over five wholesalers, making a cut from the sale of a property. 

So before that property went into the buyers hands it went through five other individuals. They were all making money on this transaction, and likely not being transparent with the original owner. 

I remember, speaking directly with wholesalers, who would tell me not to disclose that a profit is being made. 

Look, I respect the hustle. I am all for individuals trying to make their way in the Real Estate sphere. But there has to be a way that is more transparent with individuals. We can't have a large amount of unregulated people, pushing values, and figures onto the end consumer who will be the one that's really suffering at the end of the road. 

To extend an olive branch there are plenty of bad real estate agents that also push things onto their clients, but those individuals work under a broker who carries a fiduciary duty to their client. Here there are no licenses regulations or implemented ethics. 

What are your thoughts? 

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Will GastonPro Member
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
2y

@Alan Asriants there is a ton of nuance to these situations, but I am personally done with wholesalers who require me to tell an owner that I am their "business partner."

Transparency is best for all those acting in good faith.

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  • Shane H.
    Member since 2018 · 433 posts · 208 votes
    2y
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 
    0Reply
  • Shane H.
    Member since 2018 · 433 posts · 208 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..
    I was afraid to click the link. I was confident it was fake. I took the position that IF he is doing what he says he is doing, some regulations like earnest money, and mandatory bold lettered language telling the seller what you’re doing, shouldn’t affect his gig. 

    on that note, some deals I refuse to provide POF. I will however make significant earnest money deposits when needed. I submitted a cash offer once where the sellers agent fought with me because I wouldn’t give them proof of funds, but offered to put the entire balance in escrow. Some people have no sense. 
    0Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    0Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Shane H.:
    Quote from @Jay Hinrichs:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..
    I was afraid to click the link. I was confident it was fake. I took the position that IF he is doing what he says he is doing, some regulations like earnest money, and mandatory bold lettered language telling the seller what you’re doing, shouldn’t affect his gig. 

    on that note, some deals I refuse to provide POF. I will however make significant earnest money deposits when needed. I submitted a cash offer once where the sellers agent fought with me because I wouldn’t give them proof of funds, but offered to put the entire balance in escrow. Some people have no sense. 

     Hahahahaha, you really think https://besttransactionfunding.com/ is hackers' trap set up to steal your personal information?))

    Did you know that @Duane Ortega (https://www.biggerpockets.com/users/duaneo) , a member of this forum, heads that company? He even posted on this topic some 8 years ago (here is the thread: https://www.biggerpockets.com/forums/48/topics/273212-best-transactional-funding ).

    I hope you will not be apprehensive to click on the biggerpocket.com link? ))

    P.S. POF link referenced by Chris is for back-to-back--closing, when you have a cash buyer and need transactional funding to close on the property, or when there is hard money involved to back up the purchase. You can use any other POF of your liking. A lot of HML will issue you POF as well.

    0Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..

     If that guy who runs https://besttransactionfunding.com/ is an absolute fraud as you stated, then why he is still around since 2009 and not in jail? )))

    Surely one can't be openly running such a massive fraud operation for 15 years and still walk free (unless one is a CEO at Boeing, of course)?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..

     If that guy who runs https://besttransactionfunding.com/ is an absolute fraud as you stated, then why he is still around since 2009 and not in jail? )))

    Surely one can't be openly running such a massive fraud operation for 15 years and still walk free (unless one is a CEO at Boeing, of course)?

    Eric again your just naive .. its not the person who provides the  the letter to wholesalers its the person who uses it knowing full well they have no loan or funds set up ..  its just a fraudulent act on their part.. its call fraudulent inducement to contract.. without it seller would never contract with the buyer ..

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    0Reply
  • Shane H.
    Member since 2018 · 433 posts · 208 votes
    2y
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    I disagree it’s strictly b2b. The seller is rarely if ever business savvy. They’re probably the most in need of an agent with fiduciary duty if any sellers out there. I feel like you focus heavily on the wholesaler to investor part and not the seller to wholesaler. There’s nothing at all b2b about that.
    0Reply
  • Shane H.
    Member since 2018 · 433 posts · 208 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..

     If that guy who runs https://besttransactionfunding.com/ is an absolute fraud as you stated, then why he is still around since 2009 and not in jail? )))

    Surely one can't be openly running such a massive fraud operation for 15 years and still walk free (unless one is a CEO at Boeing, of course)?

    Eric again your just naive .. its not the person who provides the  the letter to wholesalers its the person who uses it knowing full well they have no loan or funds set up ..  its just a fraudulent act on their part.. its call fraudulent inducement to contract.. without it seller would never contract with the buyer ..

    I was super naive and fell right into the idea after a fortune builders seminar. Thankfully when I was more naive I bought a vacation package from Sundance, so I’d already made a mistake with high pressure salesman so I knew better. Lol Sundance cost me $15k I guess I technically have value. It’s just unusable for my lifestyle. Lol getting into wholesaling could have cost me my reputation before I ever had one, and potentially legal concerns. I ran for the hills and formed a real business model. Lol
    0Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    I disagree it’s strictly b2b. The seller is rarely if ever business savvy. They’re probably the most in need of an agent with fiduciary duty if any sellers out there. I feel like you focus heavily on the wholesaler to investor part and not the seller to wholesaler. There’s nothing at all b2b about that.

    Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    I disagree it’s strictly b2b. The seller is rarely if ever business savvy. They’re probably the most in need of an agent with fiduciary duty if any sellers out there. I feel like you focus heavily on the wholesaler to investor part and not the seller to wholesaler. There’s nothing at all b2b about that.

    Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?


    once again Eric you simply do not know how it really works in the real world.. Many agents list fixers as is  Cash only no inspections.. what your describing is a retail transaction with a nice home to an owner occ.. fixer houses go to investors. There is NOTHING that a wholesaler can do that is better or faster than an agent who works with fixer as is houses.. I have bought hundreds of them through agents. Some of the very best deals are bank owned OREO and ALL of those are listed with agents who specialize in those types of properties.
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    I disagree it’s strictly b2b. The seller is rarely if ever business savvy. They’re probably the most in need of an agent with fiduciary duty if any sellers out there. I feel like you focus heavily on the wholesaler to investor part and not the seller to wholesaler. There’s nothing at all b2b about that.

    Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?


    once again Eric you simply do not know how it really works in the real world.. Many agents list fixers as is  Cash only no inspections.. what your describing is a retail transaction with a nice home to an owner occ.. fixer houses go to investors. There is NOTHING that a wholesaler can do that is better or faster than an agent who works with fixer as is houses.. I have bought hundreds of them through agents. Some of the very best deals are bank owned OREO and ALL of those are listed with agents who specialize in those types of properties.

    Great. So, why on earth sellers don't reach out to REA to get the transaction done? Or, better yet, why REAs don't do their legwork to find those sellers, put the property on MLS and sell to investors? Is wholesaler stopping sellers or REAs from doing what they otherwise would do?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    I disagree it’s strictly b2b. The seller is rarely if ever business savvy. They’re probably the most in need of an agent with fiduciary duty if any sellers out there. I feel like you focus heavily on the wholesaler to investor part and not the seller to wholesaler. There’s nothing at all b2b about that.

    Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?


    once again Eric you simply do not know how it really works in the real world.. Many agents list fixers as is  Cash only no inspections.. what your describing is a retail transaction with a nice home to an owner occ.. fixer houses go to investors. There is NOTHING that a wholesaler can do that is better or faster than an agent who works with fixer as is houses.. I have bought hundreds of them through agents. Some of the very best deals are bank owned OREO and ALL of those are listed with agents who specialize in those types of properties.

    Great. So, why on earth sellers don't reach out to REA to get the transaction done? Or, better yet, why REAs don't do their legwork to find those sellers, put the property on MLS and sell to investors? Is wholesaler stopping sellers or REAs from doing what they otherwise would do?

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Jay Hinrichs:

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

     You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))

    As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol

    And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

    Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol

    0Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Jay Hinrichs:

    Jokes aside, you are telling me that you have retailed your RE for 91K, which is habitable and operable as a business, with $1300 monthly gross income and 19.25% return per year?  Do you realize how different that is from a similar property that may need 40K in rehab, to be fixed and flipped at whatever price would justify doing it? Why would you even call "WE PAY CASH" guys, other than to troll and prank them? It's like having 20 cars in a garage, all in good shape with maintenance records and all, and calling a local dealer's shop asking for a trade-in value on one of them, while I can comfortably put it on cars.com and sell it to highest bidder or take it off the market if I can't get the top retail dollar on it. Compare that to a guy who has a clunker, lost his job, can't buy groceries and needs cash to put food on his table while he is applying for unemployment benefits, food stamps and jobs. He will be happy if Carmax buys what he has at trade-in value, but Carmax will probably turn him off, so he will end up going to one of the local dealers who will pay him the least amount they can. If he has internet access, may be he will run his numbers through Edmunds.com, at least to know what the trade-in value is. But in any event, that trade-in value will be WAY BELOW top retail dollar he could get if he could afford to list it on cars.com and wait indefinitely to get a top dollar on well maintained, reliable car of the same size and year of make. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Jokes aside, you are telling me that you have retailed your RE for 91K, which is habitable and operable as a business, with $1300 monthly gross income and 19.25% return per year. Do you realize how different that is from a similar property that may need 40K in rehab, to be fixed and flipped at whatever price would justify doing it? Why would you even call "WE PAY CASH" guys, other than to troll and prank them? It's like having 20 cars in a garage, all in good shape with maintenance records and all, and calling a local dealer's shop asking for a trade-in value on one of them, while I can comfortably put it on cars.com and sell it to highest bidder or take it off the market if I can't get the top retail dollar on it. Compare that to a guy who has a clunker, lost his job, can't buy groceries and needs cash to put food on his table while he is applying for unemployment benefits, food stamps and jobs. He will be happy if Carmax buys what he has at trade-in value, but Carmax will probably turn him off, so he will end up going to one of the local dealers who will pay him the least amount they can. If he has internet access, may be he will run his numbers through Edmunds.com, at least to know what the trade-in value is. But in any event, that trade-in value will be WAY BELOW top retail dollar he could get if he could afford to list it on cars.com and wait indefinitely to get a top dollar on well maintained, reliable car of the same size and year of make. 



    Hey Bud they are the ones who  are sending me letters and call me twice a day on that exact address.. the issue for them is they never even look at the houses..
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  • Shane H.
    Member since 2018 · 433 posts · 208 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:
    Quote from @Shane H.:
    Quote from @Account Closed:

    There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

    He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

    You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 


    I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out. 


    Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.

    POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.

    I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it. 

    I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed. 

    Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated. 

    Are you advocating we get rid of real estate licensing? 

     No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit. 

    I disagree it’s strictly b2b. The seller is rarely if ever business savvy. They’re probably the most in need of an agent with fiduciary duty if any sellers out there. I feel like you focus heavily on the wholesaler to investor part and not the seller to wholesaler. There’s nothing at all b2b about that.

    Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?


    once again Eric you simply do not know how it really works in the real world.. Many agents list fixers as is  Cash only no inspections.. what your describing is a retail transaction with a nice home to an owner occ.. fixer houses go to investors. There is NOTHING that a wholesaler can do that is better or faster than an agent who works with fixer as is houses.. I have bought hundreds of them through agents. Some of the very best deals are bank owned OREO and ALL of those are listed with agents who specialize in those types of properties.

    Great. So, why on earth sellers don't reach out to REA to get the transaction done? Or, better yet, why REAs don't do their legwork to find those sellers, put the property on MLS and sell to investors? Is wholesaler stopping sellers or REAs from doing what they otherwise would do?

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

    I brought a deal to a wholesaler who ran the local reic. Offered to split it with him if he’d teach me. He taught me alright. We offered 60k for a 300k arv house. Probably could have gotten 225k as is. He spent half an hour trying to convince her that was it’s value.  Provided nonsense comps in the 200 range as arv. Claimed it needed 100k of work. It was outdated but move in ready otherwise.  Nothing dilapidated by any stretch of the imagination. I was mortified I brought him in. Thankfully the widow had a 125k mortgage and simply couldn’t accept. She sold it off market for 180 a few weeks later. I had run my own comps before we sat down with her and couldn’t believe the bs he was feeding her. I was too embarrassed to reapproach with a real offer after. 

    1Reply
  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Jokes aside, you are telling me that you have retailed your RE for 91K, which is habitable and operable as a business, with $1300 monthly gross income and 19.25% return per year. Do you realize how different that is from a similar property that may need 40K in rehab, to be fixed and flipped at whatever price would justify doing it? Why would you even call "WE PAY CASH" guys, other than to troll and prank them? It's like having 20 cars in a garage, all in good shape with maintenance records and all, and calling a local dealer's shop asking for a trade-in value on one of them, while I can comfortably put it on cars.com and sell it to highest bidder or take it off the market if I can't get the top retail dollar on it. Compare that to a guy who has a clunker, lost his job, can't buy groceries and needs cash to put food on his table while he is applying for unemployment benefits, food stamps and jobs. He will be happy if Carmax buys what he has at trade-in value, but Carmax will probably turn him off, so he will end up going to one of the local dealers who will pay him the least amount they can. If he has internet access, may be he will run his numbers through Edmunds.com, at least to know what the trade-in value is. But in any event, that trade-in value will be WAY BELOW top retail dollar he could get if he could afford to list it on cars.com and wait indefinitely to get a top dollar on well maintained, reliable car of the same size and year of make. 



    Hey Bud they are the ones who  are sending me letters and call me twice a day on that exact address.. the issue for them is they never even look at the houses..

    If they do mass mailings all over the US, based on a list pulled with certain criteria, it's only understandable that they don't look at each property they make an offer on. They may have figured the bid based on rough estimates ($35/sq. feet for repairs, offer 70% of ARV minus repair costs, closing costs and their finders fee). They pay for every single one of those mailings, by the way. And they keep sending it 6-7 times before 1 out of 1000 sellers agree to do business with them (that's 7000 mailings, a high cost to get a deal if you think of it). They are playing numbers game. Just think of it: for 999 of homeowners like you that will never need, consider or sell through them, they will end up finding 1 (one) who will be motivated enough to sell a property through them. They obviously didn't intentionally target you, they are just humans with no clairvoyant abilities and can't know all the particulars of each home owner when they send those post cards. If you had low/no mortgage and don't reside there, it may have been enough under the criteria they used to pull your information, skip-trace to call and send you the cards.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:
    Jokes aside, you are telling me that you have retailed your RE for 91K, which is habitable and operable as a business, with $1300 monthly gross income and 19.25% return per year. Do you realize how different that is from a similar property that may need 40K in rehab, to be fixed and flipped at whatever price would justify doing it? Why would you even call "WE PAY CASH" guys, other than to troll and prank them? It's like having 20 cars in a garage, all in good shape with maintenance records and all, and calling a local dealer's shop asking for a trade-in value on one of them, while I can comfortably put it on cars.com and sell it to highest bidder or take it off the market if I can't get the top retail dollar on it. Compare that to a guy who has a clunker, lost his job, can't buy groceries and needs cash to put food on his table while he is applying for unemployment benefits, food stamps and jobs. He will be happy if Carmax buys what he has at trade-in value, but Carmax will probably turn him off, so he will end up going to one of the local dealers who will pay him the least amount they can. If he has internet access, may be he will run his numbers through Edmunds.com, at least to know what the trade-in value is. But in any event, that trade-in value will be WAY BELOW top retail dollar he could get if he could afford to list it on cars.com and wait indefinitely to get a top dollar on well maintained, reliable car of the same size and year of make. 



    Hey Bud they are the ones who  are sending me letters and call me twice a day on that exact address.. the issue for them is they never even look at the houses..

    If they do mass mailings all over the US, based on a list pulled with certain criteria, it's only understandable that they don't look at each property they make an offer on. They may have figured the bid based on rough estimates ($35/sq. feet for repairs, offer 70% of ARV minus repair costs, closing costs and their finders fee). They pay for every single one of those mailings, by the way. And they keep sending it 6-7 times before 1 out of 1000 sellers agree to do business with them (that's 7000 mailings, a high cost to get a deal if you think of it). They are playing numbers game. Just think of it: for 999 of homeowners like you that will never need, consider or sell through them, they will end up finding 1 (one) who will be motivated enough to sell a property through them. They obviously didn't intentionally target you, they are just humans with no clairvoyant abilities and can't know all the particulars of each home owner when they send those post cards. If you had low/no mortgage and don't reside there, it may have been enough under the criteria they used to pull your information, skip-trace to call and send you the cards.


    yup all of mine are no debt and out of state so you can imagine all the calls i get when we have about 150 props like this all in wholesaler central LOL.. I even get my clients I fund deals for their callers call me LOL..
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  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    2y
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

     You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))

    As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol

    And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

    Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol


     I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Jack Seiden:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

     You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))

    As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol

    And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

    Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol


     I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.


    Hey who you calling Random :)  for someone who has never done a deal he sure has a lot to say.. and I bet if he channeled this to a RE career he could probably do pretty good.. wholesaling is a GRIND.. And at the end of the day there is very little residual or referral business  ..  Like a veteran RE agent/broker you put in your 10 years and if you make it that far your going to get a lot of bizz just by referral without spending money constantly chasing the next deal.. wholesalers are constantly on the Hamster wheel.. My Wife is a top producer 30 year vet and she has not run an add or paid for marketing in at least 10 years or so.. U do a great job your clients call you..
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  • Account Closed
    MD · Member since 2018 · 195 posts · 53 votes
    2y
    Quote from @Jack Seiden:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

     You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))

    As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol

    And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

    Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol


     I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.

    @Jack Seiden - You conveniently ignore the fact that I am not the one arguing, rather defending a position based on my views as a wholesaler, while wholesalers as a group are relentlessly being attacked on this forum.

    @Jay Hinrichs - which I don't mind, btw. The only way to learn and understand the process is to consider all angles and views on it. It would be a terrible forum if it sounded like an echo chamber. 

    0Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    2y
    Quote from @Account Closed:
    Quote from @Jack Seiden:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

     You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))

    As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol

    And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

    Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol


     I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.

    @Jack Seiden - You conveniently ignore the fact that I am not the one arguing, rather defending a position based on my views as a wholesaler, while wholesalers as a group are relentlessly being attacked on this forum.

    @Jay Hinrichs - which I don't mind, btw. The only way to learn and understand the process is to consider all angles and views on it. It would be a terrible forum if it sounded like an echo chamber. 

    That’s like saying we shouldn’t attack drug dealers as a group, the very line of work is bad for society, in nearly every case I’ve seen with a wholesaler they have paid less to a homebuyer, than that homebuyer could have gotten on the market, it’s why investors, myself included like them, but it by definition is a disreputable line of work, if it’s legal and still want to do it, go ahead but don’t think your gonna get a good star for making money in a line of business that exploits old people.
    0Reply
  • Kyle Spearin
    Real Estate Agent · Boston, MA · Member since 2016 · 450 posts · 214 votes
    2y

    I'm wondering how people in this space are going to pivot. If you currently do wholesale deals, how will you work with sellers and buyers? Does it mean just getting a license and selling deals "off market" to end buyers rather than getting them under contract? 

    Super interested in this.

    As for end-buyers like flippers and other value add investors, will you look for other ways to find deals now?

    0Reply
  • Shane H.
    Member since 2018 · 433 posts · 208 votes
    2y
    Quote from @Jack Seiden:
    Quote from @Account Closed:
    Quote from @Jack Seiden:
    Quote from @Account Closed:
    Quote from @Jay Hinrichs:

    finally a decent question from you.  The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
    Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.

    Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.

     You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))

    As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol

    And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

    Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol


     I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.

    @Jack Seiden - You conveniently ignore the fact that I am not the one arguing, rather defending a position based on my views as a wholesaler, while wholesalers as a group are relentlessly being attacked on this forum.

    @Jay Hinrichs - which I don't mind, btw. The only way to learn and understand the process is to consider all angles and views on it. It would be a terrible forum if it sounded like an echo chamber. 

    That’s like saying we shouldn’t attack drug dealers as a group, the very line of work is bad for society, in nearly every case I’ve seen with a wholesaler they have paid less to a homebuyer, than that homebuyer could have gotten on the market, it’s why investors, myself included like them, but it by definition is a disreputable line of work, if it’s legal and still want to do it, go ahead but don’t think your gonna get a good star for making money in a line of business that exploits old people.
    You must be a pharmacist who’s jealous because you had to put all the time and money into becoming one and drug dealers can do it without any of that and make more money in less time. 
    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    2y
    Quote from @Kyle Spearin:

    I'm wondering how people in this space are going to pivot. If you currently do wholesale deals, how will you work with sellers and buyers? Does it mean just getting a license and selling deals "off market" to end buyers rather than getting them under contract? 

    Super interested in this.

    As for end-buyers like flippers and other value add investors, will you look for other ways to find deals now?


     They're gonna drive Uber prolly.

    1Reply
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