Sick of Wholesalers!!!
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Calgary, Alberta · Member since 2016 · 13 posts · 20 votes
10yWell I must say first and foremost the thing you need to change is your attitude. Because a piss poor attitude will never go far in any walk of life. Personally I'm sick of people using blogs and forums to vent their problems and complaints to the world asking for pity and approval. But that's just me and I don't want to add fuel to the fire I just want an awareness of the ignorance in your comment. Condemning a whole group of people based upon a few you have had bad experiences on is not only ignorant but its discriminatory and puts a bad name out there for the people who are doing good and legitimate business in the world. If you are having bad luck with this I suggest a change in perception... like say perhaps instead of only focusing upon the bad part of what these wholesalers have done, use it as a learning experience on what you now know you have to look for in the future dealings with wholesalers, because like everyone else they are trying to maximize their profits and sometimes there is unethical behavior and stretching the truth. That is why it is "your" job as an investor to do your due diligence before investing in anything. Also another learning experience you get from the bad ones is that there is one less person you have to work with, because now you have learned from your experience. I understand frustration as we have all been through it in all walks of life, but all I ask is instead of using this platform to bash people who work hard everyday to provide for their families in all walks of life, but to come and ask the plentiful knowledge of how to deal better and even people if you have a nice positive attitude, will be more then happy to work with you in the future and share their already established resources with you and eliminate the headache. There is a learning curve in everything and integrity is shown in your words and actions so do choose them wisely! This comes not as an attack but hopefully a reminder that not all people are bad and if you keep to it and be persistent...you will realize the bad ones just made finding the good ones make you that much more appreciative. I wish you the best of luck and I hope you can keep your head up and push through the hard times. There is a lot of good knowledge and resources on this website. I believe in you!
57 Replies
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes10y
The BIG problem with these operators is many are operating illegally, with little or no knowledge, and MANY play games. Go read the forums and start counting the number of posts by "wholesalers" who are running out of time and have no way to assign the contract. Go read the posts how to put in escape clauses to walk away AFTER having led the homeowner to believe their house was sold. Operating honestly and ethically in any business will take you a long ways. Promoting dishonest and/or illegal practices hurts the RE profession in general. Most of these "wholesalers" are not licensed agents and are not held accountable. Agents operating as wholesalers have their state licensing boards to hold them accountable. You will find many posts on BP promoting dishonest, unethical, and illegal practices. Hopefully, the majority of readers will not be persuaded to operate in this manner. Follow the good honest posters that add value to these discussions. I have found BP to be a VERY valuable source of information from knowledgeable, honest operators.
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes10y
@Robin
@Robin Wilk consider getting your RE license. In most states the cost is not prohibitive. Regardless of your ambitions whether it be wholesaler, investor, flipper....an education is required.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Robin Wilk maybe rethink what you think you want to do.
90% of all RE transactions happen through real estate brokerages why try to just be a one man island.
have you gone and interviewed with any Actual real estate companies..
getting a RE license is far cheaper and better in the long run than spending money on direct mail when you don't really have the skills to qualify present and close..
There are many top producers that have teams and when you join a team you actually learn at least part of the business and you get paid for your efforts. .
and if its investment grade properties you want to work in then look at commercial brokerages go interview with them see whats required. We all started somewhere but running around trying to do this on your own. when your undercapitalized and not sufficiently trained and think you going to learn it all on BP well just look at any 3 year old thread on this site.. 99% of the people posting are gone.. its only those that actually make a living at this that are the constants. The rest fade away and have to support their families..
Real Estate is not a get rich quick scheme its a long long play... with ups and downs.. work your way into it...
- Wilmerding, PA · Member since 2016 · 188 posts · 44 votes10y
I think that getting my RE license will come in handy and that will be my first move. Then work up from there thanks for the advice. Time to look up RE license schools either online or in my area.
- Wilmerding, PA · Member since 2016 · 188 posts · 44 votes10y
Quick question the cost of getting my license should be about $300 to $400 in my area is that figure right?
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes10y
While I understand your pain, I would think that it is up to us as the prospective end-buyers to verify the wholesaler's deal analysis and/or comparables, as appropriate and base our decisions on our own findings.
I agree that what ever someone is selling, it would be wonderful if they didn't hype it to the heavens and leave us to sort truth from exaggeration and fiction.
- Homeowner · Tampa, FL · Member since 2016 · 358 posts · 65 votes10y
Originally posted by @John Thedford:
The BIG problem with these operators is many are operating illegally, with little or no knowledge, and MANY play games. Go read the forums and start counting the number of posts by "wholesalers" who are running out of time and have no way to assign the contract. Go read the posts how to put in escape clauses to walk away AFTER having led the homeowner to believe their house was sold. Operating honestly and ethically in any business will take you a long ways. Promoting dishonest and/or illegal practices hurts the RE profession in general. Most of these "wholesalers" are not licensed agents and are not held accountable. Agents operating as wholesalers have their state licensing boards to hold them accountable. You will find many posts on BP promoting dishonest, unethical, and illegal practices. Hopefully, the majority of readers will not be persuaded to operate in this manner. Follow the good honest posters that add value to these discussions. I have found BP to be a VERY valuable source of information from knowledgeable, honest operators.
Like this.
Encourage to post this type of people's name on the board!
- Colorado Springs, CO · Member since 2016 · 59 posts · 33 votes10y
I would only ever consider a wholesalers offer as an opportunity to evaluate a property ready for market. Ask the right questions, analyze the "deal" based on your own numbers and just simply ask...."do the numbers work based on my/our own research" if not, or if the deal isn't properly structured then it presents the opportunity to help train them. If it takes a simple discussion, great. If not, walk away. We all understand our time is the most valuable assest we have, and its either a deal or no deal. Proceed accordingly.
You can waste your time hating them, but they are out there and doing the grunt work at attempting to give some people the needed push to put the houses on the market. Those very houses we want to earn a living off of as well. Anyways, I believe wholesalers can blow up my email anytime and all the time. If it gets too busy, I can always create a separate email for their deals and delegate the reviews to someone else to filter for real deals. Opportunity is everywhere.
- Investor · Spring, TX · Member since 2016 · 25 posts · 7 votes10y
Very interesting that no one has brought up what "Value" means. Two people can hold the exact same property at two completely different values too. I'm surprised this wasn't mentioned. For instance, if you're thirsty on a desert, and I'm selling water for $100 a bottle, I bet that is a good value for you, but if you are in a swimming pool full of drinking water fresh out of a spring, probably won't purchase that bottle. Real estate can be very similar. How many people put money and emotions together? That is the PERFECT home, lets get it no matter the cost. Investors do the same thing when reviewing properties by only looking at ARV. There is so much more in "value" than just numbers.
- Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 937 votes10y
Lots of great thoughts above. Here's another way to look at it.
A property goes up for sale in your neighborhood. The listing says it is super-duper, beyond awesome and is priced well above similarly configured properties in the area. The reason might be the property owner is proud of the property, delusional, upwardly-influenced by a real estate agent or other reasons. Who is responsible if a buyer makes an asking price offer?
Obviously, the buyer.
It should be obvious that previously unknown wholesalers require vetting, just like any newly offered property requires analysis. The more you buy cash, the more likely you are to attract wholesaler attention because you are their target customer.
Wholesalers with whom you have a relationship are probably more reliable and you will also get a good feel for their strengths and weaknesses. They won't be perfect in their analysis. You can't expect perfection. You can choose not to do business with those who are notably inaccurate.
I am not a wholesaler - can't help you there. To me, an effective wholesaler requires practical experience. Interview your wholesaler. Someone who is just entering real estate and sending their first yellow letter is not going to be a reliable wholesaler. A wholesaler with a strong rehab and marketing resume could be very helpful. Ask for a resume. Choose your partners wisely.
Jim.
- Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes10y
On the cost of your license that's way low. Cost for the "classes" is typically about that. But then MLS fees, tech fees, etc. Will get you closer to $1500-2k pretty quickly.
- Wilmerding, PA · Member since 2016 · 188 posts · 44 votes10y
Is that 1500 - 2k total or will there be monthly fees?
Unfortunately, there's a handful of people in South Florida who control the entire wholesale market. Most wholesalers went through their weekend bootcamps and are basically birdoggers for them now and that's why you see the same piece of junk being peddled on dozens of different email blasts. These properties are the leftover scraps that their regular buyers pass over.
- Real Estate Agent · Vienna, VA · Member since 2016 · 289 posts · 253 votes10y
@Upen Mody I agree with you that it is difficult to find a good wholesaler here in SF. Personally, I haven't bought a deal from any of them yet; however, I continue talking to some of them until I can find 1-2 that I can trust. It is the same as finding a good contractor, RE agent, attorney, etc. You will find plenty that don't fin your business model, or don't fit you personality, or don't have ethics, etc., but as long as you find a few good ones, they an help your business significantly.
The way I look at wholesalers is as another source to find deals, but not the only source. Try to find deals using DM, MLS, buying foreclosures, CL, or whatever works best for you in your market, and think as wholesalers as another channel to get for deals. Interview plenty and work with the few you like the most. It may take you some time to weed out the bad ones, but it can be valuable to have a few good ones by your side.
- Real Estate Investor · North Miami Beach, FL · Member since 2016 · 32 posts · 14 votes10y
@Upen Mody Sorry to hear you are having trouble with a few wholesalers Upen. Are you just moving forward and taking their ARV's for face value? Every single time I get a lead from a wholesaler, I run comps myself, and I would never dream of just accepting what they put in their email as fact. Of course it is nice when their numbers align with mine, but regardless i'm going to be moving forward with my analysis, not theirs.
Hi Jay,
This is precisely why I am interested in wholesaling.
I'm 31, a CPA, I make about $80k/year, have a 790 FICO, and I live in South Florida. I've also never owned property before. Although I have about $40k in cash, I also have some student loans (although not an exorbitant amount). I save roughly half my take-home pay, but even at this rate, it's going to take a while before I have enough cash to purchase an investment property.
What do you suggest? Should I get my realtor's license? Would any broker be interested in hiring a part-time agent?
- Specialist · Fort Lauderdale, FL · Member since 2016 · 187 posts · 128 votes10yTotally agree
- Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes10y
I think Jay is right. He's just pointing out the fact that this is NOT an easy business. It's NOT for people who want to get rich quick. It's NOT an easy job. I work 7 days a week, almost 14 hours a day (except weekends. Then it's only 8 hours!). I don't consider myself a wholesaler, per say. I work with investors that I have developed personal relationships with. I find properties that meet their criteria etc. Every once in a while, I'll put out a house on CL or BP, if I don't have a buyer, for whatever reason. The problem is, people think they can make it rich in RE. It "ain't" happening wholesaling! Maybe after a year or two, IF your're extremely lucky. The problem with most (not all), wholesalers, is they're either so desperate to get a deal done or so desperate for cash, because they quit their job, they "fudge" the numbers. They fudge them to get a sale. That's the danger point. I probably know 30 wholesalers in the Chicago area and maybe 2 of them, have decent numbers. The ARV's are way off. The rehab costs are always ridiculously low. That's why I stay away from them. The RE business has people in it that don't know the first thing about running a business and they do very little studying what they need to know, to become successful. I've never seen a profession with so many people that don't have a clue what they're doing. I'm sorry if that offends some of you, but sometimes the truth hurts. I agree with Jay about going back 3 years in the threads. Most of those people are long gone. There is no free lunch. This business is probably the most difficult business I have ever been in. It can also be very rewarding. However, you're kidding yourself if you think you're going to get rich overnight or even in a year or two. That's not to say it isn't worth pursuing. Just be prepared to spend long hours 7 days a week studying, learning, asking and then implementing. Good Luck!
- Investor · Canton, GA · Member since 2014 · 728 posts · 500 votes10ySeems that wholesalers can potentially fill a space not filled by a licensed RE Agent. The distressed house that needs $30k plus put into it and the owners just aren't going to do it for example. Most RE Agents that I have met don't know what to do for that type of property, or are too busy chasing the big fish. As well they should be too! They have to make their living, but it isn't usually working on what flippers or landlords are looking to buy, let's face it. Always, buyer beware, do your due diligence, use your head, know your area where you buy. Don't get mad at someone for not knowing their job, when the most important fact in all this is that you know yours!
- Gadsden, AL · Member since 2016 · 31 posts · 3 votes10y
Wow! Before I read these comments I was excited about getting into this RE business through wholesaling due to the lack of money! I've been studying this for a while now and not only does it seems like an effective strategy, I know I can do this! I think being shady is just who some people are! Whether they choose RE, Law, Medicine, etc. I wouldn't say all are shady because i'm not! Plus i've been conversing with a couple that seem to be staight foward! Plus does having a license make u honest? That's just like saying everyone with a driver's license are good drivers and obey all the traffic laws! I'm going to be a Real Estate Investor and I realize that it won'the happen overnight but with persistence it will! Just have to stay away from discouraging conversations! At the end of the day, A GOOD DEAL IS A GOOD DEAL, regardless if you find it yourself or someone drops it in your lap! DO YOUR OWN DUE DILIGENCE!
- 10yGreg JeanfreauPro MemberReal Estate Agent · New Orleans, LA · Member since 2015 · 146 posts · 127 votes
You should always take the ARVs with a grain of salt as they are just estimates. You need to learn how to estimate your own construction costs and calculate your own ARV. It's not hard to get a Realtor to give you renovated comps and it is not hard to find subs to give you estimates for work. You absolutely cannot depend on anyone to do this for you and this includes listing agents, appraisers, or wholesalers. It's not necessarily that they are being dishonest, but rather that they are guessing the best the can to move quickly. You should not ignore wholesalers, but rather be able to glance at their deals and know fairly well whether or not the deal is even worth looking at according to your own criteria.
- Investor · Galesburg, IL · Member since 2015 · 90 posts · 25 votes10y
Originally posted by @Russell Brazil:
The good wholesalers often wont have some email going out to hundreds of people. Instead they are selling to the same 10 or 20 buyers every time. No need for some email blast since they know who the buyer is already for any given property.
I have to disagree with you on this one. As an active wholesaler, I do have a good list of cash buyers. But I also have a newsletter on my website to gather new cash buyers, and I email that list when I have interest to sell. It is best to have a lot of backup in case the main guys decide to go on vacation, or not jump on the deal quickly for whatever reason. That strategy can also increase the fee in the event that there is a bidding war, and the deal was priced low enough.
- Investor · Galesburg, IL · Member since 2015 · 90 posts · 25 votes10y
Originally posted by @Upen Mody:
I am tired of wholesalers that exaggerate ARV in their listings. Living in South Florida, I feel like pretty much all of them put unrealistic ARV in their emails as there is no accountability. Should I not expect any ethics in this business? Where are the good wholesalers in South Florida??
I'm interested in thoughts on how to deal with this? Should I just ignore the wholesalers and find other channels?
Upen
I think your problem is with the newbies not knowing what they are doing more than any unethical wholesalers. I see inflated ARVs as well, and I always shake my head knowing that they are just getting started. I got a lead on my website today from someone who passed up my JV form, and filled out the seller form instead. They turned out to be a wholesaler. They over offered and have been trying to assign the deal for over a month.
As a wholesaler though, I get annoyed at the idiots telling new wholesalers to contact people they find by searching terms like "we buy houses", or other wholesaling phrases. Somehow they actually think they will find a cash buyer this way when in fact it is a needle in a haystack. I end up having to weed them out from real sellers, or I have to waste my time with phone calls with the usual script. On top of it, the bird dogs come to me trying to bring me a wholesaler held deal.
- Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes10y
Searching for deals isn't easy or everyone would be doing it. I pass on :
-99% of the HUD properties I track((I have bought 300+)
-99% of FNMA and VA foreclosures I pass on
-99.9% of Hubzu and Auction.com I pass on as I place an offer of what I am willing to pay and stick to it
-99.9% of the "deals" wholesalers send me I laugh at
It is the .1 to 1% of the deals I have bought that have enabled me to live a great life. Deals come from everywhere just be ready to act when you find one
- Chicago, IL · Member since 2016 · 13 posts · 2 votes10y
Whew. I guess everyone is entitled to their own opinion. There are dishonest people in eveverything.
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