Quote from @Shane H.:
Quote from @Account Closed:
Quote from @Jack Seiden:
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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.
I love how you even argued about arguing. Lol
no one’s attacking you. You’re not a wholesaler. You’re an aspiring wholesaler. People who have dealt with them are trying to tell you a tale of caution. Rather than taking that and turning it useful by finding ways to avoid being that snake oil salesman who preys on the weak and elderly, you’ve decided that all of the people who have seen the misdeeds are just jealous. I suppose in a way you’re right. Sometimes I wish I had no morals so I could screw people over without empathy or regret. Unfortunately I was dealt a conscience. I was in your shoes. I took the cautionary advice, researched it from an unaided perspective rather than the one you’re approaching it from. A deal fell in my lap. I brought an experienced and successful wholesaler in. I was appalled by his tactics. No you didn’t “earn” that money if you convince an unsuspecting widow that her home is worth 25% of what it’s worth by inflating repair prices, deflating comps, and pretending to be a cash buyer that you’re not. That makes you a con man. If your hvac contractor tries to sell you a new furnace by telling you it’s more efficient and over one you may save money via energy savings, less repairs, etc that’s fair. If he tells you your furnace is going to explode when it’s not, just to make a sale he’s a thief. Why should that homeowner benefit from the years of experience this contractor has? He has every right to use his superior knowledge to rip them off by scaring them into taking a heloc to pay for a new furnace because it needs a filter replaced.
Let's make sure we don't argue with a straw man. I don't take any of the thoughts shared here as personal attacks. Jay, for one, is sharing a lot of valuable information and so do others. I enjoy reading their posts. Russel was one of the first members here I contacted 6 years ago when I was looking for fix and flip properties. I understand they are hostile to wholesalers as a group, they don't know me and don't necessarily attack me as an individual. In the same vein, when I argue back to defend my position I don't attack them. I defend a position from a different point of view which is not in agreement with what they say. And I welcome anyone to dismantle my arguments on the merits.
At what point did I advocate for abuse of elderly and objected to protections already afforded under the law for those with mental disabilities? Anyone who knows anything about contract law also knows that a contract signed by individual not capable of making conscious decision is null and void in the eyes of the law, just as if their signature was forged. I stated this million times. Did I ever argue against it?
Snake oil salesman, like father of the founder of Rockefeller dynasty who literally sold snake oil and ran from town to town, would be someone like Kiyosaki who charges $30K for courses to teach things about RE that one could learn on this forum for free. Classic "snake oil salesman" strategy in wholesaling would be to open seminars for sellers and charge each seller thousands of dollars to tell teach them how to sell their property for most money on the market, without providing anything of tangible value to them. But I have no such intentions, so why should I caution myself against something that I don't intend to do?
Yes, I still believe a lot of brokers and REAs who are hostile to wholesaling industry are motivated by jealousy and resentment born out of the fact that they had to invest so much time and efforts to get licensed in RE, while wholesaler can get into assigning contracts and earning his average $10K per deal without any entry barriers, overwhelming regulations, caps on commissions and jumping through hoops that they had to in order to serve end buyers and sellers with fiduciary duty to parties they serve in retail market and public. They believe eliminating wholesalers from them picture will help them capture the sales that pass through their fingers and earn them commissions they crave.
As to "morals", please don't feed me that)))) There is nothing moral or ethical about doing business, it's just a fact. Do you remember Pretty Woman, where protagonist tells a hooker that they both do the exact same thing, screw people for money? And that's what EVERY businessman out there does. Anyone who denies it is a hypocrite. You can't keep doing in, in whatever capacity and industry you are, yet preach "morals" from the soap box. ANYTIME you pay someone anything less than the market value of the goods you acquire you could say you are acting immorally. Anytime you profit from a transaction as a middle man, it could be argued that you engaged in moral vice by profiting from labor and value that you stole from other people by inserting yourself in the middle , and we both know that in practical terms this argument is a BS. Our entire economy depends on business transactions, on middlemen, we are not cave men or primitive tribe men who barter goods for their true value, without someone in the middle facilitating the exchanges and money serving as a medium or tool to make it happen. ANY transaction out there has a loser and winner, every single one including your purchase of an ice cream or bottle of soda. So, don't even think anyone can intimidate me with this childish talk about "morals" in business.
What matters to me is criminal law and I know I will not violate it. Anything outside of criminal code between ADULTS with their mental capacity INTACT is just that: a private transaction where two parties agree to exchange the goods at whatever price they agree to.
I ran wholesale operation in the past and consistently negotiated and got liquidation products at extremely low prices, which I could speedily monetize by reselling with 25% profit margin. I used the same negotiating tactics when I bought cars from car dealers, by getting the lowest price possible (after extensive research of the market) , to the extent that I have paid wholesale prices (after hefty discounts and application of all the existing rebates from manufacturer and favorable terms from financing company) on purchases of new cars. At no point I had to LIE to any of the sellers. What I did instead (because I assume that people very often by default think they are super smart and you are liar, no matter what your true intentions and actions are) was very simple: in each transaction, before closing a deal, I did my thorough research of the market and figured for myself how much the product I wanted to acquire is worth to ME. I was HATED by sellers for being a hard negotiator on the price, but I couldn't care less if they loved me or hated me. They wanted money, I wanted their product. I was willing to part with max. X dollars to get the goods they had and if they were unwilling to do exchange I immediately walked out. Never had to beg, pressure, lie or invent the reasons WHY they should sell it to me for X dollars. Always said I respect whatever they think and feel, the product is theirs and they had so much time to decide, to sell it to me or not. I was called shrewd and unconscionable by car dealers working for major auto franchises ,but I couldn't care less about it. Hate me all you want, but it's my business and my money, so sell me for what I want to pay or have a nice life! Only on rare occasions, when I had exceptionally clear thinking and well educated person (which, I will emphasize, was rare in wholesale or car buying business), I would go into details, break down the numbers, show my spreadsheets, sources of information, calculation and justification for the price I offered. For the most part, dealing with people driven by emotions and incapable of rational thinking, I didn't bother with ANY of it. It was as simple as "Here is $5, take it or leave it!". I don't care if the market value of it is $25. You want to sell it for $25, $50, $100? Beautiful, go do it yourself, I will wish you good luck. There is no need to engage in criminal acts and to defraud sellers by artificially inflating numbers, that's probably what brokers or REA would be more likely to do, since their commission would be larger the greater the amount of transaction was. And while I use comps, look up MLS and estimate repairs before making an offer to buy a property, at no point I assume that my contract assignee will care a bit about what I show him on the paper. I am sure any investor with half wits in his head will go ahead and do his own math before deciding on a purchase. So, where all the lies, deceit and snake oil salesmanship is in all of this? )))
