Buyers list! Lesson learned!

13 Replies

Ok....I'm still screening calls from my 1st direct mail campaign. And although I can recognize a killer deal when I come across one. 

Here's my issue Im getting calls from actual investors who own property so they sorta know the ropes. They understand I'm offer to pay all cash, and a few were willing to give a slight discount however I'm lacking confidence when the numbers are tight. All have been from rental properties in my area. That are generating income. 

Lesson: I figured if my buyer was the buy & hold type. Perhaps they would be willing to pay a little more for a property. This way i would definitely know if there's any money to be made on the deal. Even if it is a small assignment fee. So to all my fellow newbies....buyers list 1st or simultaneously! 

Advice always appreciated? 

Numbers are number. Do your analysis, if the numbers work be confident if they do not work move on. 

So you are looking for people who are unintelligent and "sorta don't know the ropes"?  Why so you can sorta take advantage of them?

This is why I have very little to no regard for wholesalers.  Why not find someone who really wants and needs to sell at a fair price.  I know they are hard to find especially people who know the true value of their house. 

If you find someone who wants to sell their house to be rid of it and don't really care that they are at a disadvantage knock yourself out....go for it.  i wouldn't say anything if all was disclosed as it should be but quoting you it sounds very much like you believe you need to take advantage of a not very sophisticated homeowner.

Originally posted by @Martin Scherer :

So you are looking for people who are unintelligent and "sorta don't know the ropes"?  Why so you can sorta take advantage of them?

This is why I have very little to no regard for wholesalers.  Why not find someone who really wants and needs to sell at a fair price.  I know they are hard to find especially people who know the true value of their house. 

If you find someone who wants to sell their house to be rid of it and don't really care that they are at a disadvantage knock yourself out....go for it.  i wouldn't say anything if all was disclosed as it should be but quoting you it sounds very much like you believe you need to take advantage of a not very sophisticated homeowner.

 Absolutely not, I don't want to take advantage of anyone. I just want to make  certain that I'm doing everything I can the right way of course, and not wasting my marketing funds. That's all. And I actually the seller I spoke with a just second ago. I simply told him "Mr.Seller you would definitely get more from listing it with a Real estate Agent. I didn't invest my time and money  prey on people. I here to learn and grow. Don't bad mouth  wholesalers....instead give useful advice! Especially if you help.

Sorry for the bad grammar. ..Just shocked that wholesalers have a bad reputation. I'm a newbie so whatever bad experiences you may have had, and being that you hold no  regards to wholesalers.... my newbie advice to you, don't conduct business with wholesalers. I'm simply looking for guidance. 

@Shelby Robinson

I am glad to hear your response.  I  reacted to your choice of words not necessarily your true intent.  Most, but certainly not all wholesalers, have no money and little to no experience.  Nothing wrong with being a newbie or not having a boatload of money.  But I  do not like trying to work with time wasters (read people who do not have a buyers list) or worse still not having the proceeds to buy the property if they cannot find a buyer.  You have just tied up someones property for  x number of days while you scramble around trying to find a buyer while they are being foreclosed upon.  

They truly believe they have a sale---and they don't have anything other than a home they cannot sell because it is in contract with someone who cannot close the property and "save" them.  You shouldn't write contracts for property you cannot close on.

Many wholesalers operate as an unlicensed  real estate agent, illegal in most all states.   Even if you are the most ethical person around you are not legal in those states doing what a wholesaler does.

As to it being cheaper than an agent that is a laugh.  Most posts I have read actually charged considerably more than an agent would have charged for their services.  One the other night charged 12.1 %.  You cannot tell me there are agents charging that much.

If an agent doesn't sell the property he doesn't get paid same as you.  If he does sell the property the commission is split with the listing agent and the Brokers involved.

If though you mean that the seller will get a higher price than if sold by an agent that doesn't hold water either.  If you are not discounting from the properties true value than it isn't a deal you will find a buyer for anyway so no you aren't getting them more.

Good luck though.

@Shelby Robinson Wholesalers typically don't have a bad reputation with the investors they work with or with people who understand the services we provide.  It's hard to purchase a property from a buy and hold investor that has cash flowed the property for many years, they know what the value is to them because their properties provide passive income. 

Wholesale deals come from folks who absolutely need to sell their properties.  A buy and hold investor may call you just to see what you're up to, and he/she may have no intention of selling anyway.   You're not taking advantage of anyone, you're actually providing a financial vehicle for them to liquidate an asset quickly.  

Not everyone needs to liquidate their house quickly, so we can't provide our service to everyone.   Absolutely no wholesalers that I know operate as a real estate agent, and if they do they are licensed.  

You have to be very cautious with biggerpockets and the negativity that some folks bring here.  Wholesaling is a definite way to make money and provides a very valuable service to those who need it.  It is not illegal and those who are researching wholesaling should not be discouraged to take action because of the few who maybe don't understand what we do, or assume that all wholesalers are alike.  As with any profession, there are good wholesalers and bad wholesalers.

Keep positive, keep going, take action! Let me know how I can help and I will.

@David Randle

Thanks for the support. 

I can talk Real Estate all day long, but I'm not a lawyer.  If you have legal questions know that real estate laws vary by state.  Wholesaling is based on contract law and the assignment of contracts.  Contract Law is ancient law that any lawyer should be able to speak about. 

I hate when people bash wholesalers! Just because you know a sour apple or two doesn't mean everyone is that way. I don't wholesale to take advantage of people. I wholesale to feed my family, to help others (investors) feed their families, and help sellers continue to feed their families. I hope those who talk down about wholesaler never come across a situation in their lives where they need to sell their property ASAP.

Think about your wording before you post it.

@Chaz Reid and @Shelby Robinson  I suggest you read the following thread.

Getting Busted in Ohio for Wholesaling and Praticing RE without a License

Basically you are acting as an agent when you wholesale and that requires a license unless as I mentioned yesterday you actually purchase the first property and then resell it.  As a principal you do not need a license; when you act as a facilitator you do.

And @Chaz Reid I have yet to meet a wholesaler who performed any faster than a traditional sales agent.  As far a saving someones home I have run into several people who were duped by so called wholesalers who strung them along while their home went down the tubes.  In fact if you look back a few days in the posts there a thread from a wholesaler complaining he lost $7000.  He strung that lady along for at least 75 days and then did not close.  How is that quick?

That's him though @Martin Scherer

When I interact with sellers, I put everything out on the table for them. I don't make any promises I can't keep, and one of those promises is never getting the house sold in less than 30 days. My contract is for 45 days and the seller knows that everything is based off my investors, not myself. They also know that if things don't quite add up properly, we will either need to agree to a different price, extend the contract, or exit the contract. So far as the 75 day thing, yeah... I am lost for words on his action. If you approach a deal and nothing looks promising in two weeks, you might want to reconsider things. I will completely agree with you when there are quite a lot of wholesalers that give us a bad wrap, but there are also plenty of extremely professional wholesalers like myself who try to educate newbies with the do's and don'ts of the business.

I'm currently working on getting a partnership started with someone who is in my market and I was telling him how important it is for our numbers to be correct because they technically represent our level of business ethics. There is no need to lie about things in real estate investing but don't bash people. I'm pretty sure there are crooks and horrible people who work with your niche but I wouldn't speak down about that niche because I know nothing of it.

And lastly, wholesaling is not acting as a agent if the seller knows how you operate. If you start off your business relationship with them under a lie, then that's a completely different story. But if my contract states I will not be purchasing your property but I will connect you with someone who will buy it and I collect a fee, how is that acting as a agent? I'm not getting a commission, I'm receiving a fee for contract and leg work. That simple...

Originally posted by @Shelby Robinson :

... Just shocked that wholesalers have a bad reputation. ...

LOL :)

Sounds like somebody has not yet read the thread titled "The Truth About Wholesaling" ...

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