Thoughts on Wholesaling?

Question

Wondering what peoples opinion on wholesaling is

Mustafa Ibrahim · Answer

Wholesaling can work very well if it’s done correctly, but it’s really a marketing and operations business more than a real estate one. The challenge most people run into isn’t understanding contracts, it’s consistently generating motivated seller conversations and knowing how to qualify them properly.

I work closely with wholesalers and investors by helping them generate off-market seller leads and manage the front end of the pipeline. The ones who succeed long term usually treat it like a real business with systems around lead flow, follow-up, and deal evaluation, not just random lists and cold calls.

When those pieces are in place, wholesaling can be a strong entry point into the industry or a solid complement to flipping and buy-and-hold strategies.

Kevin Sobilo · Answer

@Brian Skaff, a few thoughts:

1. Its a stigmatized business. Many people who have heard about it or have dealt with a wholesaler have dealt with DISHONEST people.

A common scenario is that the wholesaler poses as an end buyer, so that the seller thinks the wholesaler is going to buy the property but has no intention. They may promise an earnest money deposit but delay providing that deposit because they don't intend to lose money if they can't bring a deal together.

2. Do you need to wholesale to make money? Not really. If they become an agent and act as the seller's agent they can make a commission on the sale that way AND provide representation for a client who values and respects their work.

In addition, if they desire to "make a deal" for themselves, they could, where allowed, use "net listings" to set a minimum acceptable sale price and get additional money for negotiating a price that exceeds that minimum!

3. Wholesaling is such a messy stigmatized business that regulations are coming along for it. In fact, in my state (PA), you now need to be a real estate agent/broker to do wholesaling legally!

4. Wholesaling is NOT real estate investing. You never invest any capital. You never own any asset. You are a middle man brokering contracts.

So, you don't get any of the real benefits of real estate investing such as the tax advantages, market appreciation, mortgage pay down etc etc etc.

Izaiah Barba · Answer

I've been wholesaling full-time for 5 years now and it absolutely works if you treat it like a real business.Started in college doing it part-time and now my business partner and I grew it to a full fledged business with 20 employees.The reality though is that it's not easy money. The marketing grind, managing buyer and seller expectations, and lead generation take work. But it's one of the best ways to get into real estate with little to no money down.Happy to speak further on this, feel free to shoot me a DM!

Michelle Hai · Answer

@Izaiah Barba Hi Izaiah, I recently just started  wholesaling business a few months ago with bandit signs as my only form of marketing right now. I would love to connect to hear insight and advice from you!

Nick C. · Answer

The failure rate is +90% because most new people think wholesaling is real estate investing, but it's not. It's a marketing job. If you have marketing knowledge and money that can generate off market seller leads, you can succeed. If not, you're toast.

Thoughts on Wholesaling?

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