Wholesaling as a whole....is fake

Wholesaling as a whole....is fake

Dover, DE · Member since 2016 · 86 posts · 32 votes

As a business owner already, I have seen many say, "You are so young, how did you start?" "Where did you get the funds to do it?" or "Where did you learn what you know about business?"

I answer all the questions as honestly as possible, give them the path to do something similar if they want to, and then help them along their way when they ask for it.

Yet as emails eventually begin to go un-answered, loaned out books tend to stop getting read, and invitations to seminars or groups seem to be forgotten, I have found that people simply are not motivated. They catch a glimer in their eyes when they see success and want to know how to do it to. But it only takes one tough day, one early morning, or a simple realization that what they are doing may be tough, to make them quit all together.

That leads me to "wholesalers".  

The flakes of the Real Estate world.

I say this with a grain of salt, being that I myself have wholesaled deals, and I have met some of the hardest working, truly motivated individuals who are wholesalers themselves.

But I would generously say that out of the 10 people who say they are wholesalers that only 1 has ever done, or ever will do, a deal. 

Why is this?

How do people see the light and turn away?

They want to be financially free, but can't accept a challenge?

Is it only my generation, the millennials, that feel everything will be easy?

They say they want to be millionaires one day, but only have the mindset of an average man. 

Average minds don't make millions.

Average minds do not chase their dreams, make it to where they wanted to be, and then keep going.

Why is it that when someone is given a blue print to success (List of Books, Unlimited RE knowledge of BP, etc.) that they think "one day" there will be a better opportunity to start?

I do not understand. 

I say this all in light of losing my job, and continuing.

Of cutting ties with people that were dragging me down.

Rising at 5 each morning to better myself. 

Of doing what SUCCESSFUL people say to do.

Why NOT follow the path that has proven time and time again to work?

I do not understand.

I am simply tired of talking to people that want me "to join a buyer's list for great deals" and then not hear from them again. 

I am also sad, to see that this generation thinks this world is going to hand itself over to them. 

Not just wholesalers, but lack of motivation in general.

Whether or not you wanna be rich, simply get by, or have some other goal. Why not chase it with everything you have?

I simply want to be financially free. Not rich. Just comfortable. And to MOST of all, do what I love.

Because if you do not love what you do, you won't succeed, 

Why would you have the gift of life, and not try to embrace it?

That is my vent. 

So what do you think?

Does this subject frustrate anyone else?

What is your opinion?

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Realtor · Fort Lauderdale, FL · Member since 2016 · 271 posts · 144 votes
10y

I think your thread is mistitled. It should read "Winners win and Losers lose...in any field". 20% of the people will always do 80% of the work in any field.

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  • Realtor · Fort Lauderdale, FL · Member since 2016 · 271 posts · 144 votes
    10y

    I think your thread is mistitled. It should read "Winners win and Losers lose...in any field". 20% of the people will always do 80% of the work in any field.

  • Investor · Orlando, FL · Member since 2016 · 1k+ posts · 780 votes
    10y

    I agree. I have been a wholesaler for more than 17 years starting in St Louis MO doing preforeclosures and now in Orlando doing lots of distressed properties. I have built my business where I now have over 50 off-market properties all over central Florida for sale. I also have 25 small (less than 50 units) multifamily in Chicago IL. I'm helping investors find deals that they could find themselves. 

  • Dover, DE · Member since 2016 · 86 posts · 32 votes
    10y

    @Account Closed it is just a matter or motivation. Everyone knows what they have to do but almost nobody does.

  • Investor · Orlando, FL · Member since 2016 · 1k+ posts · 780 votes
    10y

    That is the main reason I'm on BP. To help as many newbee investors learn what it's really like to wholesale and help them get their first deal. 

  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    It doesn't take 15% or 25% down (ie, any prior work/savings/success) sitting liquid to be able to say "I'm a wholesaler!" so naturally the label often attaches itself to folks that have never experienced any prior work/savings/success. It's also had more get rich quick charlatans than any other form of making money in real estate, further exacerbating things. 

    I was super excited when I closed my first wholesale deal as wholetail (before knowing the term "wholetail" existed), but since then I think... one?.... person I've talked to about it actually made it into a real deal. But the number of folks that really love talking about it has been nearly endless. Which is in part my fault, I need to enforce some sort of "must be this tall to play" policy that consists of an amount of capital (evidence of past work/savings/success at some point in life). 

  • Atlanta, GA · Member since 2016 · 57 posts · 16 votes
    10y

    Thanks @Zachary Foust because I have often thought the same of Wholesalers.

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    10y

    The Pareto principle gets skewed I think when trying to help or 'mentor' those that have demonstrated nothing but poor money management skills and a vision of easy riches. Of course their fire soon dies! Not having a why other than easy money? You want them to read something? Put in a little effort? LOL The 80/20 ratio in that situation is more like 97/3.

    That's awesome you want to help others, Zachary. I would suggest adding an action step or 2 to help seekers so you don't get burned out. When folks ask me I tell them to do some digging. Go to the library and check out a RE book. After reading it, they may tell me about it for 15 mins over coffee.  Save your sanity and altruistic tenancy while you're still young!

  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y
    Originally posted by @Steve Vaughan:

    The Pareto principle gets skewed I think when trying to help or 'mentor' those that have demonstrated nothing but poor money management skills and a vision of easy riches. Of course their fire soon dies! Not having a why other than easy money? You want them to read something? Put in a little effort? LOL The 80/20 ratio in that situation is more like 97/3.

    That's awesome you want to help others, Zachary. I would suggest adding an action step or 2 to help seekers so you don't get burned out. When folks ask me I tell them to do some digging. Go to the library and check out a RE book. After reading it, they may tell me about it for 15 mins over coffee.  Save your sanity and altruistic tenancy while you're still young!

    That's probably a great alternative way I could let folks fulfill the "must be this tall to play" requirement that I've been kicking around in my head. Traditional REI it's easy because there's no point in talking before you've got that down payment. Wholesalers technically don't need capital to get started, so I could have a mental capital asset requirement consisting of "what's your favorite real estate investing book that you've read and what were your top 3 takeaways?"

  • Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
    10y

    Any industry / niche that teaches and preaches that you can get rich quick, not work hard, not have money, not have good credit, use other peoples money, but have financial freedom, vacation year round while cashing checks, etc is going to draw in tons of people who do not work hard, do not have money, do not have good credit, but want financial freedom, want to get rich quick, want to vacation year round while cashing checks :) You get my drift. I have nothing against honest wholesalers who have an intent to buy a property and close on it not dependent on another real buyer. I do have a problem with so called experts who teach crap to people for a fee. In most cases, this is just piling on. Most people who have no money, have bad credit, and do not want to work hard but want to get rich quick have a more fundamental issue that needs correction. Salesmen know this, but they sell them a dream knowing damn well the overwhelming majority will fail. With that being said, this is not just common to wholesaling. The world is filled with examples of people being sold dreams.  

  • Dover, DE · Member since 2016 · 86 posts · 32 votes
    10y

    @Steve Vaughan and @Chris Mason

    I agree that Steve's "Mental Capital" is a fantastic way of approaching it. Having some skin in the game and proving motivation not just at the beginning, but showing true drive for what you are going after is a good idea.

  • Saint Peters, MO · Member since 2016 · 193 posts · 37 votes
    10y

    Not everyone is made to be a business person or an entrepreneur and that's fine. People get into something and they find out they don't value money as much as they value free time or comfort. We shouldn't look down on people that do.

  • Saint Peters, MO · Member since 2016 · 193 posts · 37 votes
    10y
    Originally posted by @Daren H.:

    Any industry / niche that teaches and preaches that you can get rich quick, not work hard, not have money, not have good credit, use other peoples money, but have financial freedom, vacation year round while cashing checks, etc is going to draw in tons of people who do not work hard, do not have money, do not have good credit, but want financial freedom, want to get rich quick, want to vacation year round while cashing checks :) You get my drift. I have nothing against honest wholesalers who have an intent to buy a property and close on it not dependent on another real buyer. I do have a problem with so called experts who teach crap to people for a fee. In most cases, this is just piling on. Most people who have no money, have bad credit, and do not want to work hard but want to get rich quick have a more fundamental issue that needs correction. Salesmen know this, but they sell them a dream knowing damn well the overwhelming majority will fail. With that being said, this is not just common to wholesaling. The world is filled with examples of people being sold dreams.  

     Well, to be fair, the reason people do this is so that one day they don't have to work hard. I'll submit that someone flipping burgers at McDonald's works harder over a ten year period than the most successful wholesaler. The difference is that the wholesaler's hard work is all front loaded.

  • Dover, DE · Member since 2016 · 86 posts · 32 votes
    10y

    @James Danchus

    I Do not intend to judge, belittle, or look down upon anyone for choosing a different path in life. 

    If that is how I come off, I apologize. What I mean to portray is the lack of motivation in our field. 

    Deciding something is not for you and pursuing another venture, is fine and should be respected.

    I only mean to say that those that claim the title of "investor" and have hardly even "invested" time into learning about what they are doing. 

  • Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
    10y

    @James Danchus My issue is this belief being sold that you can not have money, not have good credit, not have experience, but can get access to other peoples money and have great success from the beginning with little of your own effort. I guarantee you that if a new wholesaler has no money, no credit, his/her *** better have time because they are going to have to work extremely hard to generate leads, build credibility, negotiate, and close deals! Again, that is life, not just wholesaling real estate in my opinion. I would go so far to say that a new wholesaler with no money, no credit, and no experience is similar to a McDonald's worker in the beginning, lol.

  • Saint Louis, MO · Member since 2016 · 2 posts · 0 votes
    10y
    Hi! I'm not sure I'm replying correctly as I just joined about 12 hours ago and this is my first forum post but, I like the topic and while reading through saw a number of experienced and knowledgeable pros who actually want to help newbies! I figured - the worst that can happen is I come off as new but, at least I can then learn :) Here's my shortened background (foreword before question): I'm Kristen, I'm 30, I live in St. Louis, MO and while I don't own any properties nor have I flipped/renovated/rehabbed any homes (at least for profit, I have helped friends) I am INCREDIBLY passionate about REI and getting into the house flipping (I'd ABSOLUTELY LOVE to focus on historic homes). When I was 20 I was diagnosed with an auto-immune disease that I'll live with for the rest of my life. I went to college at Mizzou and double majored in broadcast journalism and sociology. Unfortunately, my auto-immune disease didn't mix well with my career as a journalist and I had to quit, move home to Michigan, focus on healing my body and moving forward. 5 years ago I met my fiancée who's from St Louis and I moved from Michigan. I love the St Louis area and I'm happy to be here. Getting back on my feet has proven very difficult. Unfortunately, I had to take out student loans for college (and degrees that I don't get to use), my credit went from being perfect to being in the toilet due to being so sick for years and years, my income has been random for awhile as I've been working to get healthy and find something I love and works for my body, and any savings I had accumulated has since been long gone trying to stay afloat in the hardest of times. This isn't a pity party or a want for attention or anything like that - this is me taking control of my life and doing something I have such a passion for! So, my question (you've probably figured it out by now, lol) is this: how does a newbie like me get into this field without the options of traditional loans (or even unconventional loans that only take into account my credit)? How can I make sure I'm successful? What types of properties do you recommend? And, I think most importantly, what do you know now that you wish you'd known when you first started? My apologies for the lengthy post! I truly look forward to hearing from anyone!
  • Los Angeles, CA · Member since 2016 · 30 posts · 11 votes
    10y

    @Kristen Overmyer I'd start by listening to every episode of the BiggerPockets Podcast. Once you do that I can pretty much guarantee you'll have a sense of where to go from there. 

  • Flipper/Rehabber · Chesterfield, MI · Member since 2016 · 94 posts · 35 votes
    10y
    I, for one, cannot understand all the complaints against and actual hostility toward wholesalers. They merely provide investors with information about potential deals. This is a tool for investors to find deals! Investors review the information as presented by the wholesalers and either ask for more information and verify or say not interested. In my view, wholesalers are very valuable to investors. And if some people are saying that not all investors are competent, you can say that about practically any other line of work as well. If people are saying that sometimes wholesalers are wide eyed and not realistic about what's involved in wholesaling, that is true about most things when people first get started. Let's show a little tolerance, shall we?
  • Saint Louis, MO · Member since 2016 · 2 posts · 0 votes
    10y

    @Rotimi Lademo - thank you very much! I'll begin tonight :) 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Jim Bowser  two distinct things going on.. One is the public perception promulgated by either guru pitches Blogs on BP or posts on BP and other places that recommend those starting in real estate start as wholesalers because you don't need money training or anything else and you can make money on deals.. Usually more money on one deal than most people make in a month and sometimes half a year or full year.

    So that draws in the dreamers..

    What is not discussed is how darn difficult it is to wholesale and the fact that if you are going to be successful you do need SKILL ,, Capital ,, TIME and some knowledge about your industry.. So for the legions of folks with neither skill Capital or knowledge of industry to jump right into a business that is really quite complex and difficult to bust into.. the failure rate is I would suspect as stated between 95 and 99% of those that try it will not continue.. they may put out untold thousands of direct mail piece but lack the skill and capital to put the deals down.  Then were are they at they are broke.. LOL.. and the only one who made money was the direct mail folks.

    And when you look at buy hold investors that are true investors  wholesalers are NOT investors they are simply intermediary's or sales folks... these buy and hold use their capital from the jobs to buy income property so they can build up cash flow and nest egg.

    there is rarely a post from a newbie wholesaler that does not go like this.

    " HI I am sam I am new I am going to wholesale so I can then get some money so I can then buy and hold."  Well how about just having a nice job and buy and hold you don't need to go blow a huge amount of money on something that is so tough and so fraught with failure so you can buy and hold.

    @Zachary Foust  can't speak for millennials  its just wholesaling is not something that many can do for any length of time and be successful at it.. especially undercapitalized non RE educated and no sales skills folks they just can't make it no matter what they do.  its not for everyone.. just like everyone can't be a doctor or a pilot or other unique skill sets.

    And show me a undercapitalized business of any vocation that can make it more than a year without going bust..

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    10y
    Originally posted by @James Danchus:
    Originally posted by @Daren H.:

    Any industry / niche that teaches and preaches that you can get rich quick, not work hard, not have money, not have good credit, use other peoples money, but have financial freedom, vacation year round while cashing checks, etc is going to draw in tons of people who do not work hard, do not have money, do not have good credit, but want financial freedom, want to get rich quick, want to vacation year round while cashing checks :) You get my drift. I have nothing against honest wholesalers who have an intent to buy a property and close on it not dependent on another real buyer. I do have a problem with so called experts who teach crap to people for a fee. In most cases, this is just piling on. Most people who have no money, have bad credit, and do not want to work hard but want to get rich quick have a more fundamental issue that needs correction. Salesmen know this, but they sell them a dream knowing damn well the overwhelming majority will fail. With that being said, this is not just common to wholesaling. The world is filled with examples of people being sold dreams.  

     Well, to be fair, the reason people do this is so that one day they don't have to work hard. I'll submit that someone flipping burgers at McDonald's works harder over a ten year period than the most successful wholesaler. The difference is that the wholesaler's hard work is all front loaded.

    "Well, to be fair, the reason people do this is so that one day they don't have to work hard"?

    In light of the post you were replying to, you would actually be trying to be fair to the "Salesmen (who) know this, but they sell them a dream knowing damn well the overwhelming majority will fail"!

    I don't really think that those making-money-off-dreamers salesmen need encouragement!...

  • Dover, DE · Member since 2016 · 86 posts · 32 votes
    10y

    @Jim Bowser this is not geared toward the lack of value for true wholesalers.  This is about people who waste true investors time, posing as wholesalers. That have merely put on the disguise that was given to them by these gurus who are preaching vacations and cars. 

  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    10y

    I see just as many people in other areas of investing end up being ' flakes'.  Wholesalers are just like flippers or landlords.  It is just a different way to make money in real estate investing.  I would be the pass/fail rates are very similar if there was a way to measure it.   You are correct in that most people don't focus the right energy on the task in front of them and because of this they fail.  

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    10y

    Simply put, wholesaling is a poor business plan.

  • Rental Property Investor · Saint Louis, MO · Member since 2014 · 313 posts · 326 votes
    10y

    When it comes down to it, people are animals and our animal DNA pushes us to survive through the least amount of effort possible. A wild cat has the ability to eat, drink, and defend itself for its entire lifetime, but bring it indoors and feed it for a few weeks and it won't leave because well heck, life is a heck of a lot easier in here with this person doing everything for me. People today can eat without ever cooking, let alone hunting or farming, sleep without ever building a house, and chores like washing and cleaning involve pretty much setting timers and pushing buttons or hiring someone to do it for you. If you can't get a job to afford any of those things, no bother, we've got programs that will steal from productive people to buy them for you.

    This is was makes entrepreneurs unique. They're like the wild cats who might be raised in the domesticated life, but never fit in and eventually and turn away because while it might be more work, the life outside brings with it so much more freedom. Most people are just house cats who are born, schooled, and trained to be behave well while domesticated and then go on with a fairly structured and comfortable life that lacks any real freedom. Like the house cat, they might tire of the lack of freedom from time to time and make a break for the door when they see the shiny light outside, but they will be howling out on the back steps a few hours later once they get hungry or it starts to rain.

    My point is, don't be surprised that most people don't want to do the work it takes to live a life of freedom. This is not to say that making the choice to live a structured life as an employee is wrong or less fulfilling in any way. Heck, it's the life I live right now. That being said, those of you trying to teach others about the other way to do it, don't be shocked when you lead horse after horse to water and they refuse to drink. It's not just millennials or "kids these days". There are centuries of human social evolution and programming that's gone into making the majority of people behave the way that they do. One book or one podcast isn't going to undo all of that. Frustrating as it may be, just try to lead by example, produce good content, answer questions when asked, and let people make the decisions they want to. They might not be better off for ignoring your good advice, but at least you'll feel sane at the end of the day!

  • Mansfield, TX · Member since 2015 · 22 posts · 7 votes
    10y

    @Zachary Foust I agree with your statement on millennials, we all want to be millionaires but don't want to work for it.

    Everything is and has been given to us because most of our parents worked hard to do that, and don't want their kids to struggle like they did. I think this may have caused a lack of motivation in our age group. I have noticed very few millennials are motivated to do any work really. We are accustomed to coasting by in our lives, staying comfortable and not putting yourself out there. I'd love to find a way to help people my age find motivation, and work towards something they love to do!

    Great post, this got me thinking!

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