Investor in the making · Orlando, FL · Member since 2014 · 201 posts · 49 votes
I just saw an online video about the unspoken, and ugly side to wholesaling. It goes into the unstable and emotional state of mind that many sellers are in, when they decide to work with a wholesaler. According to the video, many become extremely angry when they find out that a wholesaler will be making a very nice profit. Some can potentially become violent. Has anyone had any such experience with a seller? I was just curious to know how common that is, and advice on avoiding such conflicts.
I would imagine a wholesaler in that situation has likely not been completely up front about what they do if a seller gets angry with them making a profit.
I would imagine a wholesaler in that situation has likely not been completely up front about what they do if a seller gets angry with them making a profit.
I would imagine a wholesaler in that situation has likely not been completely up front about what they do if a seller gets angry with them making a profit.
Agree with Carl. Yes, often times people are more angry getting duped than the other side making a profit. It is perfectly okay to make profit so long is transparent. For example, I buy from wholesalers and they make a profit off me and we are perfectly happy.
I have never had a seller show any anger or become violent with any of my transaction. They understand that I am an investor and I intend to make a profit on their property within the first few minutes of our first conversation. Their reaction is the complete opposite and they happy are that the transaction closed and we did what we said we would.
We avoid all this by purchasing the property with another wholesaler. Teaming up with someone who has the cash to close has been huge for us. We don't have to assign any of our contracts so the seller never knows the profit we make when we do the final sale. The arrangement we have is this: we find the deal, he makes the purchase, both parties look for an end buyer, and both parties split the profit 50/50.
If you don't know a good wholesaler with cash in your area that is willing to work out a deal like we use, then just do a double close if the profit will be over 5k (or come up with what your threshold for a double close will be). For the smaller profits, just be upfront and honest with the seller. We typically explain that we may not purchase the property ourselves and to help mitigate our own costs/risks, we might make a few thousand to get the deal to the closing table. If they get all up in arms with that over a few thousand, then it's not worth the headache. If you think the deal is good enough to get 5k+, then just do a double close.
I have always been straight forward to the sellers. I let them know I will profit from this transaction. If you are solving their headaches and just not thinking of yourself, the seller is usually calm. You got them a fair deal.
IMO, if a seller becomes angry after knowing what you profited, they were not told the whole truth when the contract was signed.
I have had it happen a few times, even though the sellers knew exactly what was happening. One time it happened with an estate sale deal we were doing and the heir to the property I am pretty sure might of smoked meth. He turned into a pretty bad stalker creep and there is another Justin Stamper in Orlando that he actually was harassing terribly.....Calling their kids schools and trying to get their info and crazy things like that...One day they came into my office( i was not there) and my GC ended up grabbing the dude and dragging him outside because he was clearly intoxicated and being very crazy. The kicker was that he came in with his posse and they were all dressed like Boogie Nights. Ever seen a dude in bell bottoms get choke slammed?!