Wholesaling real estate can be life changing. I know a lot of people who started from nothing and now make 6+ figures annually doing so, that pisses agents off lol. The things I see about wholesaling on BiggerPockets are discouraging and borderline hate speech. Basically, the kids that grew up the nice comfortable middle class neighborhoods, went to college like mommy and daddy told them to are telling people that dont have the credit to get a traditional loan or capital to close on a property that you can't be in real estate. If you don't have a sh*t load of money to spend, or near excellent credit you shouldn't be in real estate, is the summary of the BS I've been reading. Now on to the legal part of it all... Is wholesaling ILLEGAL? No. Wholesaling is simply buying something low and selling it low enough for the end buyer to make a profit. Assignments are legal in most states, some not so much...in every state that doesn't allow assignments I GUARANTEE there's an agent pissed off at guy who made his annual salary in one deal. Guys and gals, remember: From a legal perspective for a contract to be legitimate you have to have the intent and ability to close. The intent comes when you partner with a Transactional lender to fund your deals, you then have the intent and ability to close, if you meet the transactional lenders criteria with the way the deal is set up. Now I can already see someone saying "well if you're wholesaling you don't have the intent to buy" Well...you do. But you're only going to close on it if you can sell it, that's actually smarter to me. Rehabbers buy with the hope to sell, as a wholesaler we buy (double close) when we KNOW we can sell and I advise you to be upfront with your sellers as well. If you're an inspiring wholesaler be careful with what you pay attention to on here, chance are you got into the business due to lack of a big ol' fat bank account, excellent credit, connections, etc. (All the things the guys bashing wholesalers seem to have...hm...) Organize your business, learn the laws, help sellers, be honest with them, and by all mean IGNORE THE WHOLESALING BASHERS ON THIS SITE. I bet none of them had to wholesale their way out of $37,380 in debt and a motel room. They don't know the struggle, they don't want you have a bigger pool than Kanye! But all jokes aside, guys and girls wholesalers get a bad rep because there are some people who mislead sellers, honesty and full disclosure is the key. I understand some people are afraid to tell sellers they wholesale, and that's understandable Don't say that; What you want to do is set up an LLC before you start, get the website the logo, etc. Look credible. Build your buyers list, build your transactional lender team as well, your business is dependent on those things. So what do you say when a seller asks what you do or what the hell the and/or assigns means? "I work with a group of investors (the transactional funders and cash buyers; truth here!) I buy and sell properties to other investors, sometimes I'll assign the contract just to simplify things, that's less in transfer taxes, etc. ....if they don't want you to assign it (yeah some people are picky and sensitive) and the numbers make sense just double close using a Transactional lender, 0 money out of pocket. It's very simple. So, let's go over that again. The "INTENT AND ABILITY TO BUY" comes from having a Transactional lender on your team, develop a relationship with them, get to know them. Too many people just brush off this idea, well let me tell you, the agents are getting tired of us helping sellers and making a killing so they're running to the big bosses and trying to stop it all, one day assignments may be illegal everywhere unless you're an agent, so in case that day comes be ready. Excuse any spelling or grammatical errors... actually don't, I don't give a sh*t. I made my point. Happy wholesaling!

This thread should get a lot of responses:) Your arguments are bogus. Selling a contract is NOT investing. Closing on a deal and then reselling is investing. Laws vary state to state. Regardless of your arguments, most are just unlicensed operators acting as brokers. Most of the time they bring no or little value to a deal. I just saw a guy "wholesale" a property 20% under market in a HOT area. Any agent could have listed the property and got the seller EASILY 30K more after commission. Please tell me how this benefited the seller? p.s.--you want to "shut up" people that disagree with your concept, disagree with a lot of post promoting dishonest, etc. What does that tell the BP readers? If you felt like making a statement about disagreeing with posters (I am one well known for expressing opinions) maybe that would promote better responses? I don't recall any posts from people wanting to "shut up" people promoting dishonest or illegal practices. BTW, what professional licensing do you hold and who holds you accountable for honesty and ethics? Anyone? Your arguments are FALSE and misleading. Some people need to do that to convince themselves they are right.

After reading and digesting all written in this thread, I have done some serious thinking about wholesaling and based on my 38 years experience as a real estate investor, note buyer, private lender and syndicator here are my thoughts 1. People who have the gumption to try and set up their own business, as wholesalers, should be praised for their independence, entrepreneurial spirit, and drive in attempting to become successful. 2. The fact that gurus and their hype lead some to believe that wholesaling is easier than it is, more financially rewarding than it is, and teach ethically questionable practices, is unfortunate. 3. Whether or not a wholesaler needs to be licensed is a question for Judicial interpretation, I do not trust state real estate commissions to make an unbiased judgement. 4. If a wholesaler can't or won't close on a purchase unless he assigns the contract, it is only moral and ethical that he inform the seller of such before the seller signs the contract. If he hedges in any way, then he is not representing himself honestly. However, doing such is not illegal. 5. Real estate brokers model usually precludes them from successfully representing sellers of very low priced houses, or houses needing more than just cosmetic repairs ( although they will sometimes still be willing to list these type properties, they will not put marketing effort or dollars into them, and their success rate of selling them is low). In these situations, a wholesaler may be the sellers only viable option to sell the house. Since rehabbers are better off concentrating on rehabbing and paying a little more for product, wholesalers provide an efficient method of sourcing this product. In these instances, wholesalers add value and provide a needed service. 6. The huge number of unknowledgeable, unrealistic, unethical (intentional or unintentional) and inexperienced wholesalers operating with no oversight produces problems for seller's and hurts the reputation of the real estate industry. Investors fear increased inappropriate governmental regulation will result. 7. Despite widespread misuse of the term, wholesalers are in no way, shape or form real estate investors. Just as brokers, appraisers, inspectors, plumbers, etc. are not real estate investors. To be a real estate investor, one must own real estate as an investment. So, if you assign contracts, or double close, you fail the test of ownership. And if you do take ownership, short term with the intent of a fast flip, you fail the "as an investment " test. You own real estate as inventory, not "as an investment". And despite the belief of some of the wholesalers, the distinction is very important.

@Allen Felker Great Post! I am tired of the wholesaler haters as well. It's basically the same four or five guys that think they are better than the rest. Keep that big ego to yourself, no one really cares. Treat people the way they treat you. Some of us are professionals, and teach the realtors attorneys and investors a thing or two from time to time. I applaud you for breaking it down for those that may be getting started. My advise: be transparent with the seller. Have a great day wholesalers!

I have been on BP since its inception and although there are the pity pat arguments about nothing to do with real life in all its an encouraging place to be. As to the wholesaler haters... I don't see it. I do see some with miss information going around. But heck that's with everything. Now maybe some would characterize me as a hater because I use the word YUCK when discussing assigning and wholesaling. Only because assigning has to be the worst investment strategy UNLESS the Assignor doesn't understand varies financing or resell opportunities. Heck most of the work is in the front side and folks give their profit away because they don't know how to market or finance the property for the entire gain. As to being dishonest when buying a home from a little ole lady at 150 off. I've bought one.. However I made certain she had her son there during the negotiation. And when done he thanked me for buying his moms house. It happened to be the last obstacle keeping her from moving in with him and his wife. BTW I treated her the same as I treat every seller, honestly. Its all about ethical negotiation.

I thought I would share my agreement. PURCHASE AND SALES AGREEMENT DATED: ________________ PARTIES: _______________________________, as Seller, and ___________________________, as Buyer, whose mailing address is _______________________________________ and telephone number is _______________. Buyer and Seller which terms may be singular or plural and will include the heirs, successors, personal representatives and assigns, hereby agree that the Seller shall sell and Buyer shall buy the following legally described Property. • THE PROPERTY DESCRIBED AS: _________________________________________________________ (Street address) City of ______________________ State of _____ County of ___________ Assessor’sParcel Number ____________________: • FINANCING/TERMS/PURCHASE PRICE: The Purchase Price Offered is:$_______________.00.Deposit(s) to be held in escrow byCompany of Buyer’s choice. Deposit to be placed into escrow prior to the closing of escrow in the amount of: $ _______________. 00. Balance to close, (U.S. Cash, certified or cashier's check) not including Buyer’s closing costs and subject to adjustments and prorations Approximate Exact: $_______________.00. City of ______________________ State of _____ County of ___________ Assessor’sParcel Number ____________________: The Purchase Price Offered is:$_______________.00. Deposit(s) to be held in escrow byCompany of Buyer’s choice. Deposit to be placed into escrow prior to the closing of escrow in the amount of: $ _______________. 00. Balance to close, (U.S. Cash, certified or cashier's check) not including Buyer’s closing costs and subject to adjustments and prorations Approximate Exact: $_______________.00. If checked All Cash Purchase. If checked Subject to Existing Mortgages/Loans: See Addendum #_____ If checked Seller Financing and Terms: See Addendum #_____ • CONSIDERATION RECEIPT AND SUFFICIENCY: Seller hereby acknowledges and accepts the amount of consideration as the total consideration for the sale of the property to Buyer. Seller is satisfied as to the amount of consideration and acknowledges the consideration to be a sufficient amount to purchase the aforementioned Property. • APPRAISAL CONTINGENCY: This Agreement is contingent upon a written appraisal of the Property by a licensed or certified appraiser.The Buyer will order and pay for an appraisal on the property. If the appraised value is less than $__________ which is the amount quoted by The Seller as to what the house is Worth in its As Is Condition in Today’s Market, After Repair Value, the Buyer may, within three (3) calendar days of Buyer's receipt of the appraisal, at Buyer's sole option, declare this agreement null and void. Buyer is entitled to a return of all deposits, if any, less the appraisal fee and any other escrow expenses or fees chargeable to the Buyer. Thereafter,neither the Buyer, the Seller nor any brokersshall have any further rights, obligations, or liabilities under this contract. • CLOSING DATE: This transaction shall be closed and the Deed and other Closing Papers delivered in __________ days following the date of final acceptance or on _______________,20_____, or sooner, unless extended by other provisions of this Purchase andSales Agreement, or by written agreement of the Parties and also at the sole option of the buyer. • OCCUPANCY: Exclusive irrevocable possession and occupancy shall be delivered to Buyer, Buyer’s Assignees, or Buyer’s Agents at 5:00 PM on the date this agreement is signed by Seller, on the date of Close of Escrow, on ________________, 20______ or no later than ___________ days after Close of Escrow. If checked Property shall be vacant at least __________ days prior to Close of Escrow. If checked Property is intended to be rented or occupied beyond closing, the fact and terms thereof shall be stated herein. • CONDITION OF PROPERTY: Buyer is buying property in an “As Is” condition. • INSPECTION OF PROPERTY: Buyer shall have until the close of escrow to complete all Buyer investigations of the Property and approve all matters affecting the Property. Buyer may in Buyer’s sole and absolute discretion, give notice of termination of this Agreement at any time prior to the expiration of the inspection period, and upon such termination, all deposits held in escrow shall be returned to Buyer. • COSTS: Buyer shall pay for all normal closing costs. Costs shall not include voluntary or involuntary liens against the property. • NON-AGENCY RELATIONSHIP: A principal with Buyer is a Department of Real Estate Licensee. An Agency relationship between Buyer and Seller does not exist. Seller should seek advice from their legal counsel prior to agreeing to the terms of this Agreement. • TIME FOR ACCEPTANCE AND EFFECTIVE DATE: This Offer shall be deemed revoked unless the Offer is signed by Seller indicating an Acceptance and a copy of the Signed Offer is received by the Buyer on or before _____:01 PM, on __________, 20_____. If a copy of the Signed Offer is not received by Buyer on or before the Date and Time stated above, the aforesaid Deposit(s) shall be, at the option of the Buyer, returned to Buyer and this offer shall thereafter be null and void. • ASSIGNABILITY: Buyer may assign this Agreement. • Resell: Seller is aware that Buyer intends on reselling the property for a HUGE PROFIT. All profits made by Buyer during this transaction relating to the reselling of the property are the sole interest of and solely owned by the Buyer. • TYPEWRITTEN OR HANDWRITTEN PROVISIONS: Typewritten or handwritten provisions inserted herein or attached hereto as Addenda shall control all printed provisions in conflict therewith. • NOT A LOAN TO SELLER TRANSACTION: Seller acknowledges that the buyer is not lending to the seller any monies and this Purchase and Sales Agreement is an agreement to purchase the aforementioned Property only. All monies shall be given to the seller on the day escrow closes as defined in section II. • SECURITY DEPOSITS: Security deposits, if any, shall be paid to the Buyer. All Rents collected shall be prorated and said prorations paid to Buyer. • LIENS: Seller shall, both as to the Property and Personally being sold hereunder, furnish to Buyer at time of closing an affidavit attesting to the absence, unless otherwise provided for herein, of any financing statements, claims of lien or potential lienors known or reasonably expected to be known to Seller and further attesting that there have been no improvements to the Property for ninety days immediately preceding date of closing. • PLACE OF CLOSING: Closing shall be held in the county wherein the Property is located, at the office of the attorney or other closing agent designated by Buyer. • TIME: Time is of the essence of this Agreement. Any reference herein to time periods of less than six days shall in the computation thereof, exclude Saturdays, Sundays and legal holidays, and any time period provided for herein which shall end on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. of the next business day. • ATTORNEY FEES AND COSTS: In connection with any litigation including appellate proceedings arising out of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and costs. • DEFAULT BY SELLER: In the event that Seller should fail to consummate the transaction contemplated herein for any reason, except Buyer's default; (i) Buyer may enforce specific performance of this Agreement in a court of competent jurisdiction and in such action shall have the right to recover damages suffered by Buyer by reason of the delay in the acquisition of the Property, or (ii) may bring suit for damages for breach of this Agreement, in which event, the deposit made hereunder shall be forthwith returned to Buyer, or (iii) declare a default, demand and receive the return of the deposit. All rights, powers, options or remedies afforded to Buyer either hereunder or by law shall be cumulative and not alternative and the exercise of one right, power, option or remedy shall not bar other rights, powers, options or remedies allowed herein or by law. • DEFAULT BY BUYER: In the event Buyer should fail to consummate the transaction contemplated herein for any reason, except default by Seller or the failure of Seller to satisfy any of the conditions to Buyer's obligations, as set forth herein, Seller shall be entitled to retain the earnest money deposit, such sum being agreed upon as liquidated damages for the failure of Buyer to perform the duties and obligations imposed upon it by the terms and provisions of this Agreement and because of the difficulty, inconvenience and uncertainty of ascertaining actual damages, and no other damages, rights or remedies shall in any case be collectible, enforceable or available to Seller other than as provided in this Section, and Seller agrees to accept and take said deposit as Seller's total damages and relief hereunder in such event. • MEMORANDUM OF CONTRACT RECORDABLE, PERSONS BOUND AND NOTICE: Buyer may cause to be recorded, at Buyer's option and expense, in the public records of the county in which the property is located, an executed Memorandum of Contract. This Agreement shall bind and inure to the benefit of the Parties hereto and their successors in interest. Whenever the context permits, singular shall include plural and one gender shall include all. Notice given by or to the attorney for either party shall be as effective as if given by or to said party. • PRORATIONS AND INSURANCE: Taxes, assessments, rent, interest, insurance and other expenses and revenue of the Property shall be prorated as of date of closing. Buyer shall have the option of taking over any existing policies of insurance on the Property, if assumable, in which event premiums shall be prorated. The cash at closing shall be increased or decreased as may be required by said prorations. All references in the Agreement to prorations as of date of closing will be deemed date of occupancy if occupancy occurs prior to closing, unless otherwise provided for herein. • OTHER AGREEMENTS: No prior or present agreements or representations shall be binding upon any of the Parties hereto unless incorporated in this Agreement. No modification or change in this Agreement shall be valid or binding upon the Parties unless in writing, executed by the Parties to be bound thereby. • Clerical Error Waiver:In the event the Buyer at any time discovers that any of the documents executed in connection with this transaction contain an error caused by clerical mistake, calculation error, computer malfunction, printing error or similar error, all parties agree, upon notice from the Buyer, to re-execute any documents that are necessary to correct such error(s). Seller agrees that no party to this transaction will be liable to the Seller for any damages incurred by the Buyer that are directly or indirectly caused by any such error(s). • MARKETING: Seller authorizes Buyer to market property during escrow for Buyers benefit. Marketing is defined as, but not limited to, placing the property for sale in the Real Estate Multiple Listing Service (MLS), advertising in the Newspaper or other periodical, and placing a for sale sign on the property. • Meeting of the Minds Acknowledgement:Seller has thoroughly and completely reviewed the Purchase and Sales Agreement and understands completely all terms and conditions contained therein. Seller further acknowledges having no confusion, uncertainty about any aspect of the Purchase and Sales Agreement and has sufficient experience in real estate transacting to be able to sign the Agreement with absolute confidence in Seller’s ability to comprehend all matters related to it and to the sale of the property. Seller further understands and agrees to have been given sufficient time to read through this Agreement and has also been given the opportunity to seek advice from Seller’s legal council prior to agreeing to the terms of this Purchase and Sales Agreement. The Buyer, their representatives, or Seller’s current situation has not forced Seller into signing this Agreement. • ADDITIONAL TERMS: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Let me get this straight: the agent taught you negotionations, contracts, and showed you the ropes. The agent hooked you up with the lender that your business cannot survive without. The agent helped you with your first deals and your start in the wholesale business. And now you are bashing the agents????? The only hate I see so far is from you. There is a place for both wholesalers and agents and flippers, and some of us work in multiple capacities. Many times I negotiate with the wholesaler if I have a buyer. Stop hating and put your energy into getting more deals closed.

In my experience, there are two reasons wholesalers get a bad rap (both on BP and in the industry) 1. "Honesty and Full Disclosure are Key" - does not seem to be the approach many wholesalers take. The "ZOMG I'm going to make a bajillion dollars my first year" doesn't usually pair well with patience and integrity. 2. I have a suspicion that around 95% of 'wholesalers' have never done a deal, and if they ever get to a first one, they seem to be the least informed person in the deal As with all things, the minority may be giving the rest a very bad name, and I know for a fact that there are good, successful, ethical wholesalers out there - but I honestly don't know if they are the minority or majority. In any event, do what you do, do it ethically and well, and forget about all the critics. Keep up the good work Allen! I like that you're passionate about your profession.

If a wholesaler will only conclude a purchase IF he is able to sell or assign at a profit, and If he wants to be honest with the seller, why doesn't he have as part of the purchase contract a statement that the purchase of the property will ONLY take place if he is able to flip the contract at a profit? Why instead is this point glossed over by "weasel clauses", vague references to "representing a group of investors", etc.? Wholesalers claim to be principals in the transaction, and not intermediaries. But if they are not going to conclude the purchase as a principal, then are they actually principals or are they merely intermediaries disguised as principals? If they are principals then they are in an adversarial role vis a vis the seller (legal definition). If they are intermediaries then they are either an agent for the seller or a intermediary between seller and buyer. In either of these cases they have certain legal obligations to the seller which I doubt any wholesaler complies with. So, wholesalers legal argument rests on the fact that they are principals, despite the fact that they do not do what principals do, which is conclude the purchase (for their own account). Now, whether wholesalers provide an economically justifiable benefit or not is another matter. In a world in which Realtors represented an actual service industry, instead of a profit maximizing semi monopoly with PR and lobbyist to try to convince the public otherwise, and political contributions geared to the interests of sustaining their interests, wholesalers opportunity for profits would be very limited. However, since Realtors will not engage in any activity that does not maximize their profits and minimize their time commitment, the opportunity for wholesalers to profit is greatly increased. Some of these transactions involving wholesalers are of great benefit to sellers, buyers, and the immediate neighborhood. Some are detrimental to sellers resulting in significant financial loss to them. If as I said at the beginning of my post wholesalers would include as part of their contract the disclosure that they will not be concluding the contract unless they are able to resell at a profit, I would have no issue with wholesaling. My problem with wholesaling is when the seller does not understand that the sale is contingent on the profitable assignment or double close, and the resulting possible financial consequences of the sellers lack of understanding.

Folks, "investing" requires an investor to take on a financial risk, it has nothing to do with money in the deal really, a significant risk, not just the chance of losing earnest money, but taking ownership of an asset, accepting ownership and financial risks. A flipper is investing in real estate if they buy it, they certainly take on a greater financial risk by making and paying for improvements in hopes of forcing appreciation. If I buy a house with 100% seller financing, I've taken on a financial risk by signing the note and I take title. Doesn't really matter what I do in the next 30, 60, 90 days or in 5 years, my goal is to make a profit by holding title and paying for that house. If you don't take title and take on a financial risk with the dirt, you're not investing in real estate, you're an "operator" such as investing your money in options, you might be an options investor but you're not a real estate investor, you fall in to the real estate operators category. When and if you take title, along with accepting financial risks, then you become a real estate investor. I didn't take a poll, but most members on BP are operators, not investors in real estate. When you joined BP, you automatically get tagged by BP as an investor, that is simply marketing hype for the site, it's meant to pump you up, join the exclusive club of "investors" it's simply a cool title for social networking. It's a badge you get to wear on BP, nothing more. Everyone has an ego, in psychology we have an "Id" that little character that sits on your shoulder telling you how great you are, we have a mental picture of ourselves as to our social acceptance, this picture needs to be somewhat fairly assessed to be mentally healthy, too much of a higher opinion makes you egotistical and too little is low self esteem, that breads anxiety and depression. A good marketeer or sales person plays on your Id to motivate you, this can also be leadership, influencing others to do what they normally would not do. If you want to know what makes the "world go round" study psychology, you're constantly being "played", another reason to have a good BS Meter! So, we will always define ourselves generally a bit better than others see us, keeping this in check realistically is key to our personality. I'm often amused by some of the BSer's on BP, you can spot those whose favorite word is "I" and can't make a post without pumping their ego, then like a room full of junior high groupies following them, they'll dream up more stories to tell. But, it is a social site! I've accepted the popular term "investor" on BP, I'm amused when newbies begin a post with "I'm an investor in" everyone needs an identity, it's a hard wired psychological need. I don't see any harm in their impression of themselves on BP, but a bit more care might be in order when someone is speaking with someone who really is an investor, one with experience and means as they may be laughing behind that smile, knowing the difference between an operator and an investor. I'm not a shrink, but I did read a psychology book once! Okay, several..... And, Allen, I thought everyone on BP was in the "in crowd" membership status is another ego trip that is sold, (there are advertising advantages with Pro membership) but there is no reason to set yourself on the "outside" unless that is where you want to be. All investors and operators are welcome here! Just don't screw it up...... :)

How to shut up the Wholesale bashers

Bryce Davis

Los Angeles, CA · Member since 2014 · 113 posts · 17 votes

10y

If you actually want to be an investor then buy your first home with equity and use that equity to buy an investment opportunity. You could always use primary mortgage loan and flip it after 2 years and not pay capital gains. If you do not know what loans to get then google it.

Wholesalers that initiate a deal and never own the property are garbage. A wholesaler that finds a deal buys it and then markets it is another story. Someone could easily buy a property that has equity then market it to investors. Heck you could even do some basic renovations so someone could get it financing. I have no respect for people that tie up properties for 5k - 10k. Anyone can do that and your are not helping the owner.

0 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

So, once you find a buyer on the MLS do you close on the property first and then sell?

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Michael Quarles Love the line HUGE profit... I bet most wholesalers cringe at that one.. LOL.

Podcast Guest on Show #222

JLH Capital Partners51 Review

Website View Page

0 Reply

Bryce Davis

Los Angeles, CA · Member since 2014 · 113 posts · 17 votes

10y

Originally posted by @Nathan Paisley:

There are several way's to wholesale and not all deal with a distressed seller. On a side note, I tried getting an agent (friend of mine) on board with me 4-5 years ago and his "mentor" told him not to work with me. The funny thing is this "mentor" who was an agent himself told me a story of how he walked away from a property he owned describing it like, pulling up to a red light in a car, opening the door and just walking away like nothing ever happened"! What a guy! Fast forward my agent friend funded our last flip together and is freakin out about how much money he's gonna make because we brought the wholesale deal and he funded it.

I believe the vast majority of agents (like 98%) don't further their investing brain power past what they learn while getting their license...

@Nathan Paisley

It not just agents it is people in general. I am retired in my 30's from real estate and do very well. I have offered my services to key friends and family that have acted interested in making their lives better. I even offered them to make a percentage of the profit on my deals, since they don't have the cash I offered sweat equity. NONE of them have ever taken up my offer on anything. Whether it be free books, training, classes, investing, everything. People are LAZY!! They work 9-5 and expect their lives to change by the 1-5% raises that they MAY get. They want to have nice things or be wealthy but wont do anything about it. Yet they will spend 400.00 to go to a sports game.

One of my favorite stories has to do with sports.

A man and his wife get free box seats to go see their favorite sports event. They scream at the players and opposing fans. "We Scored, We Won"! Yet what don't realize that the winners of the game are the players are the field. The fans and spectators have absolutely nothing to do with the skills and talent it took to win. The winners are on the field PLAYING the game. The FANS just watch the talent.

Also the real winner is the owner of the box seats. The person that worked 16 hr days for the chance to own that box seat. Yet probably hardly ever uses it. It more a marketing technique used by those that are successful.

3 Reply

Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

10y

Some issue seems to exist with wholesalers calling themselves investors. I think we can all agree that finding a below market property, tying the property up with a purchase agreement, and then assigning that agreement for a profit is not investing; it is a business. Same scenario but double closing with some of your own money has a small investment aspect to it - but as in investing working capital in a business - not as in purchasing an investment. Some posters seem to think that by spending money on advertising, bandit signs, earnest money, they are INVESTING in real estate and hence are real estate INVESTORS. They are neither. They are investing their money in their real estate related business, and hence are owners of a real estate related business.

Not sure any of this matters at the end of the day, except that real estate INVESTORS are tired of getting a bad rap (rep?) because the public and press lump them together with wholesalers, flippers, etc.

Private Mortgage Financing Partners, LLC

Website View Page

3 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

dude, not everyone has good credit and even the people who do dont want to follow your traditional bread and butter strategy, get over it. Wholesalers, wholetailers, DO help sellers, if you categorize an entire group of people based on a few stories you heard or a few things you've seen you have the same mentality as a racist.

You're the type of person this post was aimed at, you're telling people if they can't get a loan, etc they can't get into real estate, WHY NOT? because YOU didn't do it that way? You sound like an idiot, your arguments are based 100% on OPINION.

Get off the thread dream killer. People like you are the reason I ALMOST didn't take the leap to change my financial situation, luckily I ignored idiots like you.

There's things I can't say or call you on BiggerPockets so, I'll end it on this note: YOU MADE IT BECAUSE OF GOOD CREDIT, JOB, ETC IM MAKING IT BECAUSE I HUSTLE.

3 Reply

Felipe Aguila

Lender · Avondale, AZ · Member since 2016 · 2 posts · 1 vote

10y

Allen Felker... Respect my friend, keep on hustling.

1 Reply

Adrienne Bryson

Flipper/Rehabber · High Point, NC · Member since 2016 · 276 posts · 183 votes

10y

Can I ask, how is wholesaling through contract assignment NOT investing?

In order to get that contract in the first place, a wholesaler has put in time - in searching, letter writing, driving, qualifying leads, negotiating, checking out properties, etc, which can take months or even years - as well as money - for books, classes, lists, even hundreds of dollars on stamps - and for people like me that DON'T have thousands and thousands of dollars to blow, that's a lot! I'm taking time and energy and money away from my own family to put into getting leads, for other investors, for a relatively small profit.

Putting something in to get more out is investing, plain and simple. Just like putting "sweat equity" into a house for money on the back end is investing.

It's easy to turn your nose up when you "have it like that". I don't. I'm not going to leave anybody high and dry, but contract assignment is the way I can scrape myself off the bottom and get the capital to start really buying for myself.

Call me scum, call me garbage, call me whatever you want. But those that I've helped thank me, and that's what matters to me.

4 Reply

Shaq Jones

Real Estate Agent · NJ, NJ · Member since 2016 · 30 posts · 23 votes

10y

I was totally following both sides of this argument because both sides were making great points, but you lost me with the "ghetto" talk. Let's not act as if the ghetto doesn't have home owners that need help as well. Any good real estate agent or wholesaler would be able to help people regardless of what you may feel is an acceptable area or not. Some people have no problem going into the ghetto to rent out their holds and that's fine, but let's try not to bash one thing to promote whatever story you're selling. Because let's be real there are investors HERE that buy homes in the "ghetto" rent and hold them or may plan to because it's a little more affordable to start off that way (me). You guys should know that being in the field and all. Also, the professional term instead of "ghetto" is urban areas or inner cities. I guarantee if you were to use either of those to explain an area, people will know exactly what type of area you're talking about. As a professional, you should learn to stay away from stereotypical titles. Not trying to bash anyone, but since this seems to be a teaching moment, you can't educate if you're not open to learn as well. Now carry on, I'm learning from this. Let's just remember to keep it classy, there is enough money out here for all of us to make. We do things differently, but we also have to respect one another and our differences of opinions. I'm sure we can all give a story about a shady wholesaler AND a shady Real Estate Agent. Just like everything in life you cannot escape the slackers in life.

3 Reply

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

10y

I agree with Allen's comment as to close on the deal and then sell, but you aren't really wholesaling as it is commonly known, you're a buyer, then an owner then a seller and that is the proper way to do this. But, after that, I have to draw the line. There are several ways to buy without using much money, you also don't need credit or a job, but you do need more knowledge and that is what's grossly lacking in the real estate space.

Someone who believes they know will never learn.

Michael Q is one heck of a marketeer, he could sell ice to Eskimos in the Arctic.

Again, the problem is that real estate isn't ice and a different attitude is required in dealing with real property, but Michael also knows this.

Anyone who represents themselves in court has a fool for a client. That also applies to drafting legal documents or contracts. A biased contract can be set aside easily if push comes to shove. Seems most investors and operators use contracts for eye wash, so long as you stay out of court that can work.

Seems too, that with a little bit of knowledge contracts can be made to sound pretty good, but view them in a different light, on one hand you're saying I'm dealing with a distressed seller........oh really, well then that may just mean they aren't dealing from an informed position and aren't dealing as a prudent person! You can't have it both ways. So your biased one sided contract can cause you more trouble than your lawyer's mind will allow while dealing with someone acting under duress.

Now, incurring expenses is not investing, most here are real estate operators, not investors!

But, the gurus devised the term to help market their folklore, investor sounds cool, important, like you have money, just sounds better than operator, so investor is used and there are some pretty wild justifications trying to keep that ego trip going. US Tax Code defines "Investor" and "Operator" it's in law, not some whipped up guru book.

Not long ago I read a post of a young lady who basically said she was so proud of herself now after being jobless, she could tell her family that she was on BP and that she was a "real estate investor" , poor young lady, her family probably knows she's misguided but they still love her I'm sure.

Gee, 2 months ago I couldn't spell "Reel Estate Envestar" now I are one! :)

Don't forget, birds of a feather stick together.

With people, it's not really about having good credit or money, those that can't pull up their own boots use excuses for failure and to justify doing the wrong thing. That's because it's easier to stay on the bottom rung socially and professionally. When I started out I had no money, no credit and no real job, today, I have money and credit but I still don't have a job, LOL! You get there through knowledge, something most are just too lazy to acquire. (like beginning wholesalers on BP)

Now, back to Allen, in your last rude post you said you're making it because you hustle, well that's good, but if that's all you do then you're probably more of a hustler than an investor. It's pretty clear you don't know real estate as you probably think you do, especially as to valuations of property and services.

If you want to be an Eagle, stop acting like a Crow.

Oh, and please get off the ceiling inferring other posters are idiots or calling them names and YELLING at us, otherwise the powers to be here will be sending you off to fly with pigeons.

Good luck :)

2 Reply

Michael Quarles

Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes

10y

@Jay Hinrichs I am always amused that some folks think that someone who is proficient in sales and negotiation is somehow taking advantage for folks.

I think the opposite. Those who understand negotiation aren't afraid of honesty. We realize that it's an asset.

When one understands the concept of character closes they then understand the power of disclosing and thus its effectiveness.

Btw I have yet to have a seller complain about that paragraph.

6 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

@Bill gulley, I understand you're one of the "good old boys" and part of the in crowd with the higher ups on BiggerPockets, and that's cool. I learned a lot from you, but what do you mean exactly when u say I don't understand real estate as far as "Valuations of properties and services"? I'm always willing to learn more from more experienced professionals:-) I never said I knew it all, don't even think I implied it, heck, YOU even said u agreed with some of it.

Also, it's funny you call my comment "rude" yet there's a guy calling all people of a particular profession Scum bags, explain your logic..

I'll wait.

0 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

Plese teach me more about valuation Bill. So I can retire even earlier.

1 Reply

Bryce Davis

Los Angeles, CA · Member since 2014 · 113 posts · 17 votes

10y

@Allen Felker

Your comments on here make people not want to want associate themselves with you. I could not even imagine you in a deal. I respect your "Hustle" you call it. I called it good work ethic. You call everyone else good ole boys. As someone that is married to an African American I hope you are not pulling a race card.

As far as your comments about credit etc.. You have no idea where anyone has come from. I personally started invested with a 545 credit score. I purchased properties that I knew the seller could finance. I paid them payments until I paid them off in 10 years. I also purchased a condo in an area that was not in the best area but I knew growth was coming. Because it was in a low income area I was able to get 98% financed with a bad credit score. I was able to turn a 160% profit in one year due to my research.

Good luck in your pursuit.

1 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

One more thing and I promise im done.

@Bill you mentioned something about one sided contracts ...have you ever read those iPhone Apple agreements where have to click disagree or "I Agree" now that's a one sided agreement if there ever was one, so is Apple a bad company too? Wait no, they can't be because they're worth billions right? I feel like most of your comments are grounded in opinion...someone mustve screwed you over lol.

1 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

Actually BRYCE I've gotten a lot of colleague requests from my comments, once again your OPINION BASED comment has been shattered.

I'm not here to be liked though, there's people who don't like me because of my skin color, do I cry at night because of it? NO.

1 Reply

Adrienne Bryson

Flipper/Rehabber · High Point, NC · Member since 2016 · 276 posts · 183 votes

10y

I'd love to go that route to get started in buy & hold.

0 Reply

Allen Felker

OP

Wholesaler · Madison , WI · Member since 2016 · 79 posts · 64 votes

10y

Guys let's just end this discussion. It got out of hand, you don't have to agree with me for me to make money and help sellers.

0 Reply

Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

10y

As I explained in my first post on this thread, at least one method of "wholesaling" is actually brokering, and other methods have brokering aspects to it. When one acts as a principal the other party knows they are (legally) adversaries with the opposing party.

Wholesalers, "helping" home owners, are implying that they are acting as "advisers" to the home owner needing to sell. But if that it true, AND they are making money by purchasing at the lowest price possible, then they are engage in a conflict of interest, and arguably advising a homeowner while they have a financial incentive to provide misleading or incorrect advice.

So, this leaves three scenarios. One - the wholesaler acknowledges he is a principal, in an adversarial relationship with the seller, and discloses to the seller that he will be attempting to profit by assigning or selling the contract, and that he will not be closing if he can not assign or sell at a profit. I am totally okay with this.

Two - same as above, but the wholesaler leaves the seller believing that the wholesaler's intent to close is NOT necessarily contingent on his finding a buyer or assignee at a higher price. I am NOT okay with this because it is not being honest; the wholesaler is portraying himself as a end buyer when he is not, and the seller has a much less solid deal then he is led to believe.

Three - The wholesaler portrays himself as an adviser (see above), helping the homeowner market his home. I'm am NOT okay with this under most cases because the wholesaler most often does not have the real estate knowledge, experience or oversight to do this competently. And, in undertaking the task of acting as an adviser, success would not be measured by how much money the wholesaler made on the deal; it would be measured by criteria appropriate to the seller.

While I am no great fan of the rel estate brokerage industry, we must admit that the educational requirements leaves them with more basic knowledge and understanding of the real estate laws and process that the vast majority of wholesalers, and much more knowledge than new wholesaler, whose training emphasized how to get a homeowner to sign a contract and how to create a buyers list. And that licensed real estate salespersons are overseen by licensed real estate brokers, whose business depends on making sure the salespeople operating under their supervision do not engage in blatantly ethically questionable practices.

As per full disclosure, while I do not operate as a real estate broker, I do hold current real estate brokerage licenses in three states.

Private Mortgage Financing Partners, LLC

Website View Page

2 Reply

John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

10y

Geeez....

felker has now gone to calling people "racists"

his comments about people being raised in certain neighborhoods, with silver spoons also has somewhat of an animosity in it

So, anyone that disagrees with him is now a racists, and I am also MAD because I wasn't born with that silver spoon and momma and daddy didn't shower me with money to make money. Not everyone is born with the same "opportunities" as wealthy people, but we all have opportunities to make of ourselves what we desire. It appears felker has a chip on his shoulder from him past. He is the ONLY person here talking race. I post in many threads with no regard to race. I am glad to contribute to any respectable thread about making money in an honest manner. ANYONE who promotes dishonest dealings will never get a positive input from me.

@Bill Gulley

The "good ole boy" does seem to insinuate something...yes!

0 Reply

Kenney Vangalder

Amarillo, TX · Member since 2016 · 27 posts · 5 votes

10y

Allen Felker please oh please Mr. Felker contact me! Love what you're doin! I've been wholesaling for about 3 months here in Texas and would love to hear some tips from you! Thanks in advance!

1 Reply

James Stoughton

Investor · Yorba Linda, CA · Member since 2013 · 20 posts · 6 votes

10y

"Can I ask, how is wholesaling through contract assignment NOT investing?"

It just occurred to me that wholesalers are not investors. Unless they actually invest money or take ownership of a property. As far as I know this doesn't occur when assigning contracts. Facilitating deals puts them in the realm of real estate agents, just without the licensing/ professional standards associated with being a professional. So I think a wholesaler calling oneself an investor isn't quite accurate.

3 Reply

Shaq Jones

Real Estate Agent · NJ, NJ · Member since 2016 · 30 posts · 23 votes

10y

@ John Theradford I think you're over reacting a tad bit. You started off extremely credible because you are looking out for people, stick with being an informative source. Don't let opinions bring you to a place where it makes u look bad.

0 Reply

John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

10y

@Don Konipol

This man has now resorted to calling respected BP posters "idiots" if he disagrees with him. In one of my previous posts I mentioned the "ignore" feature. I have only used it once but this case may require a second use. When people cannot win arguments with logic and honesty they resort to name calling and accusations. If felker had ANY respect when he started this thread, I don't know that he has much now. See ya later...I am off in my Bentley for dinner on my yacht...thanks to my glitzy upbringing, the millions in my trust fund, and of course..the fact that I didn't have to waste my time getting an education and learning how to make money the old fashioned way...

0 Reply

John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

10y

@Shaq Jones

felker is the only one on here calling names and insinuating racism to those that disagree with him. Correct or not correct? You will find my posts trying to be constructive in LOTS of threads with NO concern as to race, religion, etc. When people get desperate they change subjects and resort to name calling. People disagree with me..and I don't call them names. They may be right and I learn something from them.

0 Reply

How to shut up the Wholesale bashers

How to shut up the Wholesale bashers

Most Popular Reply

137 Replies