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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Most Popular Reply

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.

See this reply in the discussion

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  • Homeowner · Edmonton, Alberta · Member since 2013 · 35 posts · 6 votes
    10y

    Great discussion going on here.  Really appreciate the mention of there being no correct way to do things and everyone can choose their own path.  I try and spread this around to my friends haha, there's no right or wrong in life (I've read a bit on Buddhism).

    Anyways, back on topic! I have known about this site for a few years now and have read posts, some books, and used to listen to podcasts. My issue is that I don't have the motivation! I have been interested in REI for a long time, done some renovation work and own 2 houses in which I rent out floors and rooms. I am becoming older (only 31 I know) but also becoming lazier. This is just the topic I needed to help work on my motivation. As mentioned above by the OP, doing what successful people do and making life changes will help I feel. Reading books more, motivational and REI books should probably help. I don't really have any friends that are interested in this sort of thing, and some of my friends even laugh at me when I talk about all the crazy ideas I have (wholesaling or dreams/goals), because they have the mindset of buying your house, paying it down and working the rest of your life.

    I just wanted to thank everyone for the discussion and tips and welcome any more advice.  Every month I keep telling myself I should start taking action but never do.  I feel I'm on a tight deadline as I may go overseas for a 6 month working visa.  When I come back I may not be able to get my job back with it's cushy salary.

    See you around =)

  • Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    It comes down to barrier to entry.  Every business or industry has them.  For some, like wholesaling, it is extremely low.  The barrier is basically just calling yourself a wholesaler. There! You've done it! You're a wholesaler!

    But then the real barriers hit. A little bump like reading a book will knock out a lot of people out, let alone actually contacting homeowners, marketing, and getting a deal.

    How many kids are in a band who never play one gig?

  • Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
    10y

    I guess it depends on what you consider a flake for wholesalers. I don't consider people who only whole sale real estate investors but real estate salespeople.  Most people I hear that say they like to help newbie investors are people who are selling average deals that experienced investors would not buy.  If you are finding good deals then you only need 2-3 investors to buy all your deals.  The problem is if you wholesale full time then you are basically selling to real estate investors so my experience is the best wholesalers are people who wholesale some but also are true real estate investors themself. @Account Closed

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

    And how many deals have you done Charles? I bet not any. You obviously don't know what you are talking about.

    I have bought many houses in my 17 years as a full time investor. I am selling houses now to other investors so I can raise cash to buy small MF properties. I recently moved to Orlando so I have not found the property I want to buy yet.

    All of the deals I have are a wide variety of % of ARV and in need of rehab. There is a property in my list of over 50 properties for every taste in investing. What do you have available to sell????

    I CHOOSE to be a wholesaler because it best suits my financial plan at the moment. And I do help newbie investors all the time. You can see my many posts doing just that. How are you helping others? Obviously not, because you are just running your mouth off not knowing what you are talking about.

  • Rental Property Investor · Raleigh, NC · Member since 2016 · 396 posts · 995 votes
    10y

    The problem is several factors.  One, as many have pointed out is that it has zero barrier of entry, and the hype for huge paydays attracts many people who will attempt it only to fail prior to their first deal.  Many have no previous experience in sales, or real estate, yet continue to pass themselves off as professionals making life difficult for both the seller and the end buyer since often the newbie wholesaler doesn't truly know what they're doing. 

    Second, of those that are successful wholesalers, I would argue that many graduate from wholesaling into buy/hold scenarios.  While you are just getting started building a financial empire wholesaling is perfectly fine, but in the long run, why would someone continue to find 100k value homes contract them for 80, and reassign to a buyer for 90.  Sure you made 10k, but why not take a little time to secure proper financing and make the entire 20k instead?....plus appreciation, plus rental income.  You already spent so much time finding the deal, why do all that work for only half of the profit?

    Some people continue to wholesale because they enjoy it, and if that's you @Account Closed then that's great.  But you would likely be in the minority. 

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

    @James Wise 

    Investigations are made by the Bureau of Real Estate's Enforcement Section on the basis of written complaints received from the public. To initiate an investigation, the CalBRE must determine two things:

    1. That the individuals or companies involved are under the CalBRE's jurisdiction. The Department has jurisdiction over real estate licensees, subdividers and unlicensed persons who have performed acts which require a real estate license. See to find out if an individual or company is licensed by the CalBRE.

    this straight form the CA BRE... if you think for one minute you can simply start a website and do everything a RE agent does and never close on a property someone in the RE community will turn you in.. that's a given.

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

    @Account Closed

    Great conversation! Love all of the input on my piece form the beginning. 

    I would say that wholesaling is a mixture of being a great negotiator and having a great knowledge of real estate. Those are two traits that follow any great RE investor.

    Wholesalers are a great part of the life cycle of REI. Saving time and money for full time investors that don't have time to find deals.

    They are vital and invaluable in certain situations.

    The motivation of certain individuals simply strikes me at times when I see that light bulb go off in their head, and then they expect the rest of the work to be easy. Like some of you pointed out. That is what most GURUS portray.

    Do you believe that a full time wholesaler is a true investor if they have not flipped, nor held onto a property? 

    Your thoughts?  

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

    I have held onto many properties in St Louis and of course learned how to invest properly. Now I live in Fl and am semi retired and will not do any more rehabbing. I am now finding good deals for other investors while raising cash to buy multifamily properties for passive income. I have been a trainer for more than 35 years and I enjoy helping others. That is the only reason I'm on BP.

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    10y

    @Zachary Foust, you asked: "Do you believe that a full time wholesaler is a true investor if they have not flipped, nor held onto a property?"

    My answer is: no! Wholesaling is a JOB.

    They only become investors if/when they put their "pay" into investments that generate their own return (eg. buy-and-hold rental properties). You understand the difference? My 2c...

  • Olympia, WA · Member since 2015 · 6 posts · 2 votes
    10y
    Wholesaling is full of people that wish they had the opportunity to really learn all there is to know to get your first deals under your belt. Truth is, while sailing is a mind f@$!, and it takes a massive learning curve. You not only need a very good mentor but you need a lot of experience in front of sellers to really get good. To accomplish that, you obviously need a lot of marketing, data and direction. This of course is all filed by money. It's too difficult to build this foundation while doing it part time. Ok ok maybe you can do it part time but it will take for ever and life will suck. So, my take in this post is that yes, there are a lot of flakes in this business but I believe that if more people had all that is needed to give it a real go at it, there would me more that stuck around. Truth is, most of the flakes get fed basic education at the seminars that does not have real depth so they inevitably fail. I am a very successful wholesaler and thank my lucky stars I was able to position myself to get all of the above. If you are new and want to pay the price to learn how to do this, find a mentor who will take you under his wings even if it's for crumbs and bust your *** to learn until you can do it all yourself. Oh yeah, and never stop educating yourself.
  • Dover, DE · Member since 2016 · 86 posts · 32 votes
    10y

    @Brent Coombs Okay I can see your take on that, to play devils advocate though, wholesalers do make an investment into theirselves in order to get deals. Capital is needed to get deals done. Whether it's the few thousand needed to market via direct mail, or it is the hundreds needed to fill your gas tank each day while driving for dollars, if done full time. Money out into business cards, paying bird dogs, etc. 

    Wholesalers, if they are legit and motivated, I believe do have to put their wallet ahead of their work to do what they need to. Just some thoughts of mine. 

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    10y

    @Zachary Foust, well ok, maybe akin to running a business, but, still a job. The investing part comes when profit is set aside to BUY investments (eg. shares). 

    Using your logic, everyone who gets paid after successful effort is an investor. I think, not!...

    Or conversely, everyone who fails to be paid for their wholesaling dream is a dudded investor?

  • Investor · Orlando, FL · Member since 2012 · 822 posts · 303 votes
    10y

    @Zachary Foust ^^my home girl is opening a hair salon and she just bought scissors to do it.

    she is an investor now right?

    LOLOLOL Just kidding. 

    ACTUAL WHOLESALERS who ACTUALLY SELL AT LEAST ONE HOUSE A MONTH are not the flakes yall are talking about, nor do they fall into any of these nonsense categories of people. All the wholesalers that run in my circles are hard working cats who also all do other things in the RE world. I do not really think anyone who actually understands real estate investing 100% focuses on wholesaling real estate. But who knows, maybe I am just lucky to be surrounded by hustlers. ;-0

  • Investor · Orlando, FL · Member since 2012 · 822 posts · 303 votes
    10y

    Also, this whole "if you do not love what you do, you will not succeed" is some nonsense that you read on some white girls starbucks mocafrapachino or a chipotle bag....because that **** is the opposite of true.

    could think of 2348345 things I'd rather do than manage crews and deal with contractors, buyers, sellers, and RE agents.....but we still succeed. over and over and over again.

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    10y

    "Hard working cats"! Exactly! ie. not investors (until they do those "other things")!

    @Justin Stamper, all the best for your home girl's business (job). All the best...

  • Investor · Orlando, FL · Member since 2012 · 822 posts · 303 votes
    10y

    @Brent Coombs Wholesalers are not investors. They sell property to investors. Its all transactional money. Transactional money stops flowing when the transacting stops= j o b

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    10y

    @Justin Stamper, er, I'm the one who made the same point, remember?

    (You meant to tag @Zackary Foust)...

  • Investor · Orlando, FL · Member since 2012 · 822 posts · 303 votes
    10y

    @Brent Coombs not arguing with you, just making it clear for everyone reading this. 

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

    @Justin Stamper  

    Only playing devils advocate. I agree 100% with what you guys are saying! They are valuable pieces to the REI world, but not actual investors. That takes research, projections, risk, immense knowledge, etc.

    Glad to have this great conversation. 

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

    I have been a rehabber for many years. THATS A JOB. When I wholesale a property it is not a job because I choose to do this investing this way because I help inexperienced investors get their first property and then I help them through the whole process. As I grow my cash I will invest in a small MF when I find the right one for my buying criteria. 

  • Hilliard, OH · Member since 2015 · 54 posts · 18 votes
    10y

    Wholesaling can be just as automated, or more, than other forms of investing. A wholesaler is more of a marketer w/ strong high level analysis skills.

    Anything can be a job, if you don't find a way to remove yourself from it. So unless you are a buy/hold who has a management company do 100% of the work, you are to some degree fulfilling a "job" role. (not trying to create a debate over the definition) This would include flipping, albeit to a greater extent.

    Wholesaling also (unless you have a realtors license and a very idealistic view on your industry) decreases risk (in my opinion) when compared to flipping or even buy/hold. Yes the margin is lower, but moot point if you get hit w/ a lawsuit, major repair, or lack of a renter and your on the hook. (yes I realize you still have equity)

    If you know your stuff, the process of a wholesaler should become more and more streamlined than other forms of investment. (Naturally a noobie will find it far from that, as with anything)

    Note: This is also assuming a fairly liberal view on what the wholesaler participates in. But really, it is all about minimizing acquisition costs. Also, I feel like this role is better suited to a particular group of people who - in my humble opinion - don't fit the persona or maybe demographic as the typical investor I have personally met in the industry. Perhaps that is why there is a lot of negative feedback on the subject.

  • Engineer/Real Estate Investor · Renton, WA · Member since 2015 · 368 posts · 120 votes
    10y
    Originally posted by @Zachary Foust:

    @Account Closed

    The motivation of certain individuals simply strikes me at times when I see that light bulb go off in their head, and then they expect the rest of the work to be easy. Like some of you pointed out. That is what most GURUS portray.

    **Preface Post-I've never closed a deal and in the Learn and Save $ phase.** 

    I think part of the problem is there is a disconnect between what GURUS preach during seminars (having been to 4 myself) and what is actually required to begin wholesaling and investing using OPM (since they love to use this as a sales tactic). 

    Obviously it is possible to use OPM, however what most newbies don't understand is that it requires 

    Proof of Concept

    Like Chris mentioned earlier they need some type of proof you are capable of doing business. I get that. I will network with people at meetups, but I don't expect to walk away from those meetings with any access to money until I prove myself. 

    The same was true with my job in the corporate world. I graduated with a degree in mechanical engineering and took an extended internship, because the company I wanted to work for needed to know I wasn't a dummy. Proof on concept is necessary and I think many of the types of people being discussed in this post aren't aware of that. 

  • Rental Property Investor · Julian, NC · Member since 2016 · 78 posts · 100 votes
    10y

    I agree also.  I have found that many are not willing to make sacrifices ( of time, friends, reading, educating via mentors (as mentioned) etc.) to look at the bigger picture and plan for when they are my age (60).  I have been in real estate for over 30 years (starting in my 20's).  My husband and I are comfortable.  We are low keyed folks, drive older vintage vehicles (which I love), and do what we love at this stage of our lives.  

    It's a sad state of affairs when I couldn't even get family members involved decades ago even though I was begging them to get into real estate especially in Brooklyn NY.  Now, many have had to move because they cannot afford the rents there anymore.  As my mom used to say, you can lead a horse to water, but you can't make em' drink!   Sad, but oh so, so true.  

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

    @Denise Brown-Puryear   yes the idea of apprenticeship seems to be lost in this whole idea of wholesaling ... and or flipping   and or many things real estate related..

    and I get that you take a late night TV add were this nice couple is holding a 40k check up on a flip they did without any of their own money and all within 120 days.. and they say they are regular folks and if they can do it.. you can to you just need to follow  this great instructor.

    Can that happen of course it can.. is it frequent of course its not.

    I see all the time these folks wanting this wholesaling stuff and NEVER talk about being a top producing agent or a very good commercial broker.. this is were careers are made.

    Once you put your dues in and as long as you remain personable etc etc.. Real Estate sales for the public in whatever form.. either commercial or resi  can be quite rewarding ... and it frankly gets easier you simply live off of referrals.. My wife has been at it 25 years her business is 100% referrals not one dime spent on marketing.. but to start you do need to market.. I think this is what is missing.

    wholesaling is transactional your only as good as your last deal you always have to be marketing.. can you get referrals sure you can.. but its not like building a career.

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

    @Ryan Cameron @Pete Perez @Denise Brown-Puryear  @Riley Gilson @Jay Hinrichs

    Fantastic point Riley that wholesaling is, or at least can be, a very automated business. The business in itself can be quite lucrative if people truly set their minds to it and go after it with their heart. 

    Pete, you have the right mindset for being someone who has not yet struck a deal. Proof of concept is a vital tool in investing. Getting at least one deal done can lead to the legitimacy an investor needs to do multiple. 

     Jay and Denise, both your insights are very knowledgable. Denise that is sad when you can't get your closest family or relatives on board with you. Jay apprenticeship and mentoring have been approaches to real estate that have been highly overlooked. I agree. That is a great avenue toward gaining a lot of free knowledge. 

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