Where are YOU Wholesaling and HOW is it going, Check In Here!
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Investor · Phoenix, AZ · Member since 2015 · 191 posts · 152 votes
10yI work for a major wholesaler in Houston- headquartered in Dallas. We've been around for a while and close several hundred deals a year-just in the Houston location. I have a ton of respect for the independent wholesalers out there. That is a serious grind that takes real ambition to make successful.
To be blunt- The problem many investors have with independent wholesalers is that many (not all) are viewed as unqualified or inadequate. Let's recognize the truth here, many people who try to start 'wholesaling' are only interested because of the low overhead to buy in, and the fact that you are technically not required to have any credentials to do so.
This has created a large population of 'wannabes' that has flooded the markets with people who don't know what they're doing- which is dangerous. Real estate is not rocket science but you also can't figure it out in a day...or even weeks.
What makes our company (and im sure many others) so successful is that we actively work every day to separate ourselves and our company from that population of wannabes. We do so through many methods but some examples are being a licensed brokerage, hiring people with education and experience, streamlining our processes and procedures, staying consistent with property output, practicing respect and integrity with clients, staying on top of the changing r/e laws, and probably most important- we stay on top of current market data in order to have an educated and in depth understanding of our market.
47 Replies
@Jay Hinrichs I think the main reason most go for the wholesaling route as opposed to RE sales is the gurus. As long as they're preaching how easy wholesale is, how you don't need money, time, or credit, the majority of individuals interested in real estate are going to start by wholesaling.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Nick C. I can see that... just like BP selling dreams so do guru's
on BP though yhou just have about 30,000 guru's all of us giving our personal opinions which really don't account for all that much LOL....
- Professional · Columbus, OH · Member since 2015 · 119 posts · 37 votes10y
Originally posted by @Jay Hinrichs:
@Nick C. I can see that... just like BP selling dreams so do guru's
on BP though yhou just have about 30,000 guru's all of us giving our personal opinions which really don't account for all that much LOL....
At least the majority on BP aren't charging a fortune for a dream that may never come to fruition!
This forum attracts a lot of newbies, so the view to most is that of failing new first timers who show up and vanish. The barrier to entry is lower to just "be" a wholesaler vs. Agent and the mortality rate on agents is exceedingly high too. They're similar professions.
i always smile that the majority of the advice given in this forum is from non wholesalers. Often it's good help but there are many times it's clear the advice is not from someone with experience doing it, only a concept of how it's done.@Jay Hinrichs Valid point and it's not lost on me. My business model is actually not wholesaling. But I chimed in on this thread because I did in fact just complete a wholesale assignment. My primary business model is to take ownership, fix, and resell via my agent. For a number of reasons, it was better for me to just assign this one and move on.
In regards to becoming an agent, yes, I could probably make a killing with this kind of marketing. Makes me wonder why agents don't do more direct mail. I simply don't want to be a listing agent. It's my personal preference. I work hard in several different endeavors and I enjoy what I do. I don't want to add real estate agent to my resume.
I pass many leads onto my agent and I am happy to send the business his way. It's just not my cup of tea.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Graham K. fair enough in this context I see you probably wholesale off your over flow of deals you do not want to rehab...
Agent is full time job to be successful no doubt. but given the option of only wholesaling and creating a life long career that you can make big bucks in ( in the right market) I often wonder if those who spend big bucks on marketing how they would do just listing and selling.
I suspect in your market there are many agents who make well in excess of a million a year I know here in PDX there are many who make 500 to a million...
- Real Estate Investor · Sunny Isles Beach, FL · Member since 2013 · 788 posts · 333 votes10y
I'm wholesaling (among other things) here in South Florida (Dade/Broward/Palm Beach).
- Wholesaler · Orlando, FL · Member since 2015 · 15 posts · 2 votes10y
we wholesale and flip throughout Central Florida. We are acquiring 3-5 deals per week and business is great ! We are now expanding to the Tampa,St.Pete area and on throughout florida the rest of 2016. We offer a mentorship program for anyone wanting to learn the business and make money!
- Wholesaler · Orlando, FL · Member since 2015 · 15 posts · 2 votes10y
we wholesale and flip throughout Central Florida. We are acquiring 3-5 deals per week and business is great ! We are now expanding to the Tampa,St.Pete area and on throughout florida the rest of 2016. We offer a mentorship program for anyone wanting to learn the business and make money!
- Investor · Phoenix, AZ · Member since 2015 · 191 posts · 152 votes10y
I work for a major wholesaler in Houston- headquartered in Dallas. We've been around for a while and close several hundred deals a year-just in the Houston location. I have a ton of respect for the independent wholesalers out there. That is a serious grind that takes real ambition to make successful.
To be blunt- The problem many investors have with independent wholesalers is that many (not all) are viewed as unqualified or inadequate. Let's recognize the truth here, many people who try to start 'wholesaling' are only interested because of the low overhead to buy in, and the fact that you are technically not required to have any credentials to do so.
This has created a large population of 'wannabes' that has flooded the markets with people who don't know what they're doing- which is dangerous. Real estate is not rocket science but you also can't figure it out in a day...or even weeks.
What makes our company (and im sure many others) so successful is that we actively work every day to separate ourselves and our company from that population of wannabes. We do so through many methods but some examples are being a licensed brokerage, hiring people with education and experience, streamlining our processes and procedures, staying consistent with property output, practicing respect and integrity with clients, staying on top of the changing r/e laws, and probably most important- we stay on top of current market data in order to have an educated and in depth understanding of our market.
Originally posted by @Trey Watson:
I work for a major wholesaler in Houston- headquartered in Dallas. We've been around for a while and close several hundred deals a year-just in the Houston location. I have a ton of respect for the independent wholesalers out there. That is a serious grind that takes real ambition to make successful.
To be blunt- The problem many investors have with independent wholesalers is that many (not all) are viewed as unqualified or inadequate. Let's recognize the truth here, many people who try to start 'wholesaling' are only interested because of the low overhead to buy in, and the fact that you are technically not required to have any credentials to do so.
This has created a large population of 'wannabes' that has flooded the markets with people who don't know what they're doing- which is dangerous. Real estate is not rocket science but you also can't figure it out in a day...or even weeks.
What makes our company (and im sure many others) so successful is that we actively work every day to separate ourselves and our company from that population of wannabes. We do so through many methods but some examples are being a licensed brokerage, hiring people with education and experience, streamlining our processes and procedures, staying consistent with property output, practicing respect and integrity with clients, staying on top of the changing r/e laws, and probably most important- we stay on top of current market data in order to have an educated and in depth understanding of our market.
I would say the same about New Western given their reputation.... A simple search here would indicate that.
I've seen instances where New Western only takes payment under a shell company that's not licensed as it protects them from recourse and risk to their brokerage. Shady.
- Specialist · Dallas, TX · Member since 2009 · 20 posts · 95 votes10y
Originally posted by @Tim G.:
I would say the same about New Western given their reputation.... A simple search here would indicate that.
I've seen instances where New Western only takes payment under a shell company that's not licensed as it protects them from recourse and risk to their brokerage. Shady.
So taking title to a property in a separate LLC is abnormal? Isn't that what every real estate investor is supposed to do? I don't know a serious RE investor that would actually take title to real estate in a brokerage entity. That doesn't make any sense but I can see how some brand new investors could think it's strange.
As far as staying in line with the subject here. The real estate wholesaling space has become more and more fragmented as new wholesalers learn the trade and enter the space. Which I think is a good thing for the RE market and also for the investor, it means more inventory and more competition in their favor. There are a only a couple of big wholesalers that have managed to scale nationwide. Obviously in any market flipping distressed real estate can be a very high risk / high reward endeavor for investors and not every deal is going to go as planned, do enough flips and one is guaranteed to fail. The large majority of wholesalers are small and from our research contribute as little as 5-10 deals per year so whether they are great or terrible don't expect negative feedback to be easily found online. Although The larger wholesalers may transact literally thousands of deals per year, and I'm only able to find a handful of negative comments online, so it may not be a true indication of their reputation in the investment community. Also with all that can happen after the property is sold that is entirely outside of the control of the wholesaler; such as poor management of repairs, poor design choices, or lackluster marketing, listing options, or simply disastrous luck not everything can be attributed solely to the buy source. The other side of the coin is that it would be extremely unlikely the successful investors go online and publicly rant about how great the deal was they got from their new "buy source." Especially in this market when you could be at the next property bidding against the competition you have created.
I've done some research into some of the markets we focus on in the US, and particular to deals from "known wholesaler" the estimated ROI was as follows for a few of the markets:
Tampa 57.2%
Pittsburgh 55.2%
Atlanta 54%
DFW the estimated gross profit was $83,000
So in short we think the market is favorable for flipping and the majority of investors are doing pretty well. The trend we found that was interesting was that if a first time investor fails on their first deal they are highly unlikely to continue in the space. So advice for wholesalers out there; Prep your buyers that this is a game of baseball and not every at bat is a homerun like they say in the seminars, and make the first one count.
Originally posted by @Kurt Carlton:
Originally posted by @Tim G.:
I would say the same about New Western given their reputation.... A simple search here would indicate that.
I've seen instances where New Western only takes payment under a shell company that's not licensed as it protects them from recourse and risk to their brokerage. Shady.
So taking title to a property in a separate LLC is abnormal? Isn't that what every real estate investor is supposed to do? I don't know a serious RE investor that would actually take title to real estate in a brokerage entity. That doesn't make any sense but I can see how some brand new investors could think it's strange.
I said nothing about title title of a property, this is in regards to taking payment for a deal.
- Real Estate Investor/Broker · Irving, TX · Member since 2015 · 520 posts · 263 votes10yDoing on average 10 deals a month in the DFW area and we're growing every week. I'm utilizing a variety of marketing tactics that are inside and outside of traditional REI marketing methods. I'm also always open to adding new sales people that are energetic and have a strong RE foundation. At the rate we're going, 25 transactions per month by 2017 is realistic in terms of volume.
- Investor · Phoenix, AZ · Member since 2015 · 191 posts · 152 votes10y
I REALLY want to write a lengthy response and shut down everything you just said but it looks like Kurt has already done that and I have properties to buy and sell.
Bottom line- what you are saying is misguided and false. Classy move though. Thanks for the shout out.
Originally posted by @Trey Watson:
I REALLY want to write a lengthy response and shut down everything you just said but it looks like Kurt has already done that and I have properties to buy and sell.
Bottom line- what you are saying is misguided and false. Classy move though. Thanks for the shout out.
A newbie and friend is suing New Western, to get their EMD back on a deal gone sideways.
Also my point was if you're gonna talk up your company having its license being a great thing, I should point out that you take payments outside of that company to avoid recourse against that license.
I've gotten plenty of PM's and calls from past NW employees who have confirmed the issues I've mentioned.
Search the forums, NW has a poor reputation for a reason.
Regarding New Western, I've done a handful of fix and flip deals. My greatest profit I had was one I bought from a wholesaler - New Western out of Dallas. They're definitely large in the space and know their stuff.
I met Trey at one of New Western's Houston houses and I was absolutely amazed at his market knowledge. By market knowledge, I'm not talking about just ARV's. He knew what pockets of Houston were hot sellers, what pockets had a lot of buildup and better to avoid, which areas had more competition, which areas had more equity, which areas had new home supply scheduled to come in. I'm not just talking about a small area of Houston. We discussed the Woodlands/Spring areas all the way down to Bellaire as well East/West. I walked away very impressed. While some information is readily available, most people will not seek it out and actually be on the pulse of the market. Due to the volume New Western does they truly are on the pulse of the market. I have never met any other wholesaler with the depth of market knowledge.
I would definitely recommend New Western and Trey to anyone looking for a good investment property.
- Jersey City, NJ · Member since 2016 · 43 posts · 9 votes10y
The Wholesaling Game Is Wicked.. I Tell Ya...
I have Some Great Nightmare Stories For You.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes10y
Accidental 'wholesaler' here. More capital wanting to be deployed than property available. Did 3 last year. Engineering 26 units with 3 different sellers now. I buy what I like, engineer what I don't. Good to have a couple buyers of C class and below as well as A class. I like the sweet 'B' spot.
I specialize in plexes for B&H'ers and take my 'assignment fees' in discounts on the property I buy when possible. Then I can own it for a year and recategorize ordinary income to l/t cap gain. If I decide to sell.
Sending out 7k mail pieces over 6 months to receive a one-time pay day at a high tax rate sounds like a job. A bad one at that. Just my opinion. No offense intended.
I find I can generate multiple income points when I engineer lease options, wraps, seller-carry's, etc in addition to just an assignment fee in the beginning. I'd rather be an engineer than an operator. Good discussion!
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