Are Wholesalers Unicorns?

31 Replies

In other words, do they actually exist?

I am actively seeking rehab/flip properties in St Petersburg and Pinellas Park, FL. I have access to plenty of capital, but I can't find properties. 

I have yet to come across a wholesaler that understands how to evaluate a deal, or be offered a wholesale deal that actually looks profitable and is in my farm area.

I'm doing my own marketing (like a wholesaler) to find offmarket deals (like a wholesaler), but I don't want to be a wholesaler - I actually want to buy properties, and I'd much rather pay an assignment fee for an actual deal than spend thousands on marketing and chasing down motivated sellers.

Maybe it's just my local market, but I'm beginning to wonder if local wholesalers really exist. If you're out there, give me a sign!

Anyone else having good or bad experiences with wholesale deals?

In my experience good wholesalers rarely stay wholesalers. If they're good, those assignment fees start adding up and they soon have the capital and experience to do their own deals, or whatever else they want to do. People who excel at wholesaling and continue to do it are unicorns IMHO.

Have you gone to the Tampa Real Estate Investor's Association meeting? You should be able to find wholesaler's there.

http://tampareia.com/meetings/

Yes.  Wholesalers take many forms.  From those that do it because they don't know how or can't invest.  Some don't know hos to analyze and mistake birdog for wholesaling.

Others are really good at it.  Some, like myself, wholesale properties I analyze that don't match my buying criteria...but they do other investors on my buyers list.

Jeff,

they can be hard to find but are out there. Like Chris said, most of us only wholesale for a certain period of time until we can move onto what really makes us happy. Whether that is buy and hold or flipping properties.

-Yasmine

I agree with @Chris Mills .  If I were an awesome wholesaler I would quickly begin scooping up the deals for myself as soon as I was able.  I never understood the wholesaler angle as a full-time strategy. Lots of work and expertise expended for one-time payday at highest tax rate possible.  I do assign properties that aren't a great fit for me, of course. 

If I was in your area @Jeff Copeland , I would send run properties by you if I knew your criteria.  Do you have specific criteria you are seeking? Single-family homes? Small multi?  Higher end, lower end? You shared "seeking rehab/flip properties".  Thanks.

I've come to many of these same conclusions - 1) Wholesaling is way harder than the gurus make it sound, and 2) If you can do a wholesale deal, it doesn't take you long to realize it makes more sense to invest/flip/hold yourself, therefore wholesalers aren't as plentiful as it would seem.

@Steve Vaughan - Yes, more specifically I'm looking for Single Families, 3/1 or better, in St Pete and Pinellas Park roughly between 5th Ave N and Park Blvd. Purchase price below 75k, and ARV $125k or better (obviously more spread is better, I consider $50k a bare minimum, allowing for ~$30k rehab/holding and ~$20k profit). These price ranges tend to be the middle of our market (our median home value is around $139k).

Obviously for the right deal, I will venture out of my farm area, or out of my price ranges, slightly. I will also consider small MFR's (

Thanks!

@Jeff Copeland that's great you have fine-tuned your criteria so well. That takes a lot of fine-tuning. You are obviously seasoned and knowledgeable. 

I know what I would be happy to try and find what you seek if I was in your area. Do you also have good realtors looking for your as well? It's rare they hit the MLS, but as a cash buyer I would think you would be a valuable guy to know. A cash buyer that knows exactly what he wants would certainly be someone I would like to know well if I were a realtor!

interesting question.wholesaling is for the quickest payday,with minimal funds/risk but towards the bottom for profits that is why many then work the deals further for more profits.

Maybe it's sinking in, if you can do wholesaling well, you won't be wholesaling long. Most of the brand new folks followed the gurus and got to BP, getting a basic education in RE may let them see the light and move on up to higher profits, legally, ethically and in developing a good reputation in the business. Wholesaling by itself is tough to do in most markets I'd think. Good luck finding a good one Jeff! :)

Originally posted by @Joe Villeneuve :

Yes.  Wholesalers take many forms.  From those that do it because they don't know how or can't invest.  Some don't know hos to analyze and mistake birdog for wholesaling.

Others are really good at it.  Some, like myself, wholesale properties I analyze that don't match my buying criteria...but they do other investors on my buyers list.

joe,  i am still anxiously waiting for properties in livonia and westland...

@Jeff Copeland have you been to Larry's meet up on Monday nights?  There are always people announcing deals they have there.  There's also a Thursday morning exchange table one at Denny's that people bring deals, this group is more creative but people bring deals they have and don't want to rehab.  I agree with what everyone else said that a successful wholesaler will become a fix/flipper and whole sale the properties they do not want/can't handle at the time.  I am focusing on whole sale this year to fine tune the methods before I move into fix and flip.  (I've been on the landlord side for 11 years)  I don't market on your side of the bridge but will keep your criteria on my list in case I hear of anything.

Hope to see you at the meet ups.

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They are about as easy to find as an agent that will do the same thing you have asked of them. 

@Adrian Smude - I have been to the Thursday morning Pinellas Wholesale group on a number of occasions. Great group of people and lots of interesting horse trading, but not a lot of actual properties that fit my criteria. I haven't been to the Thursday night group. 

I'm sure there are some nuggets to be found in all of the REIA groups, but my time is very limited with work, family, and real estate.

Thanks for the feedback!

No, if a unicorn showed up at more door, I'd be stoked...

@Jeff Copeland I think there are two issues right now

1: inventory is pretty low right now in St Pete and so many people are attached to the shiny object of St Pete which is inflating even the rehab houses.

2: a lot of good whole sellers have big buyers which they go to first before advertising to other investors.  The big buyers are buying a lot still and don't have much flowing in so these deals aren't being offered to other investors unless they aren't great deals.

I think the better meet up group for you is Larry's Monday night.  Just getting there a few times to network so you are on more lists would be great because of your work schedule.  It starts at 7 but I hear people get there as early as 4:30. 

Thanks @Adrian Smude , I;m definitley finding #1 to be true. And thanks for the tip about Larry's group. I appreciate it!

Originally posted by @George P. :
Originally posted by @Joe Villeneuve:

Yes.  Wholesalers take many forms.  From those that do it because they don't know how or can't invest.  Some don't know hos to analyze and mistake birdog for wholesaling.

Others are really good at it.  Some, like myself, wholesale properties I analyze that don't match my buying criteria...but they do other investors on my buyers list.

joe,  i am still anxiously waiting for properties in livonia and westland...

 LOL.  I know.  They move so fast though.

I don't mind moving fast.  I just never heard from you that u have any since Dec 20th

Hi @Jeff Copeland

We are in a similar boat to you in that we have access to capital and are seeking flips & rentals in St. Petersburg. I would be in heaven if a handful of professional wholesalers sent me 10 properties every week and I just had to evaluate and purchase a couple a month. So far it hasn´t happened and I´m not holding my breath.. 

The problem is that St. Pete is ultra competitive at the moment, especially in the 3 bed SFR with ARVs of $125k range. A light reno with a 20k margin in a clean neighborhood will attract multiple offers.

That means we have to spend a lot of time running around. We have dabbled with yellow letters and in the last six months we have bought with online auctions, local agents and wholesalers. I´d rather not be a jack of all trades, but we are resigned to using multiple (and time consuming) avenues to source our investments.  

Best of luck, and if you find a great wholesaler let me know!   

@Jeff Copeland I too live in an area with wholesale drought. Leaning on wholesalers is not a long term strategy, you know this so why not master the process to allow you to do what you want?

You gotta learn to love marketing. Google Joe Polish.

@Colin Murphy, thanks for the insights. I agree and I'm seeing the same market pressures.

@Mike Osterman , Thanks for chiming in. Your comments echo my point in starting this thread. I find it interesting that probably half of what is discussed on BP pertains to wholesaling, but in reality, wholesaling activity is nowhere to be found. There are lots of people talking about wholesaling, but very few seem to be actually doing it. 

I don't think leaning on wholesalers is a strategy at all, hence Wholesalers are Unicorns (mythical creatures that don't exist).

I do think there are some marketing lessons to be learned in the whole Wholesaling concept though, which is why, as I said, "I'm doing my own marketing (like a wholesaler) to find offmarket deals (like a wholesaler)".

@Jeff Copeland I'm having the same problem in the zip codes I'm interested in.  

The last few months when I see new bandit signs pop up, I always call the number and leave a message emphasizing that I'm a cash buyer looking for a rehab project.  They either don't call me back or they don't have anything that's even close to a wholesale deal.

There is an abundance of "wholesalers" it is the one that actually knows how to analysis deals and then actually find them and lock them up that are the unicorns.

Most are more of the jackasses with a toilet paper tube tapped to their heads... 

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