What makes an investor not wholesale a deal themselves?

Question

Why would a struggling investor not use propstream or one of the sites where you can post an all cash deal and instead use a wholesaler they know is making an assignment fee?

Cole Bossert · Answer

A struggling investor might still use a wholesaler, even knowing they’re paying an assignment fee, because finding great off-market deals takes serious time and effort. Cold calling, direct mail, negotiating with sellers, and handling all the legwork isn’t easy, and many investors would rather focus on rehabbing, renting, or flipping instead of spending hours hunting for deals. Experience also plays a role—newer investors might not feel confident negotiating directly with sellers or analyzing deals properly, so they see value in having a wholesaler do the groundwork and present them with a deal that still leaves room for profit.

Stephen Morales · Answer

@John B.I would say most most struggling investors are struggling for a reason. One might be they are not good at sourcing deals themselves and would prefer to rely on wholesalers or realtors to find them a deal. They may also be struggling because they don't have the time or don't want to do the work at all. Cold calling 8 hours a day is not for the faint of heart. You also have the other side of that coin where you're a very successful investor and want to stick to what you do best. One example is a good friend of mine who buys 5+ houses a month, fixes them up and rents them out. He also buys land and does his own vertical developments. He does not have any time to allocate to lead generation or want to learn the skill of lead gen as his skills and effort is best spent doing what he's good at - rehabbing and developing.

Ke Nan Wang · Answer

Many reasons, a lot of them could be not knowing, unfamiliarity factor, maybe overestimating the cost in terms of effort and money, or simply just being lazy. For instance, when someone list a rental property in a slow market, do they take advantage of all the free rental property listing platform that's available to them? Or they only list on a couple popular ones and rather let the property sit on the market than exploding other less popular listing platforms?

On the flip side, a wise investor should soon figure out the most valuable part in this business is network and your relationship with people. Doing deals with people build your network. A lot of times it's worth it to build that relationship. I would glad to pay a wholesaler $15k assignment fee if they bring me a true deal that I can close on. I rather have as many people bring me deals as possible and let these people know that when they bring deals to me, they will get paid. Doing this long enough you will realize you make most of the money from finding deals, collaborating with savvy trust worthy investors, not from pinch pennies and under cut others (obviously I don't mean being wasteful).

What makes an investor not wholesale a deal themselves?

What makes an investor not wholesale a deal themselves?

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