What questions should I ask a wholesaler in an interview?

Question

Hey everyone,

When interviewing different wholesalers in any given area, what questions do you ask that help you determine if you want to work with them?

Thanks!

Eric Sztanyo · Answer

Wow, @Jay Hinrichs, I thought this was a place I could ask questions and gain wisdom from experienced investors like yourself, not a place to get berated.

I've been investing for 5 years, but I've never purchased from a wholesaler before. In my city right now, inventory is low, and I decided to test the waters with wholesalers as a form of acquisition. I don't really see an issue with that. Of course, I had a list of questions, but I wanted to see how other investors have approached this relationship. Yes, Account Closed, I wanted to see comps, property calculations, more info, etc.

The heart of my question was - how do you find wholesalers you can trust? For example, I've met with a few locally now and I've known fairly instantly who I can trust and who I can't. One group in particular has set up their operation in a way that they do not invest personally in SFHs anymore because they saw it as a conflict of interest with their investors. They didn't want to be perceived as picking off the best properties for themselves, so now, they invest in multi-families. I think that is pretty legit and a selling point for me as an investor.

Other questions I had asked were -

• How many properties have you sold this year? 
• How many clients do you have?
• How much repeat business do you get? 
• Tell me about your business. 
• Tell me about you, personally. 
• Do you have connections to contractors? 
• What's the average time for one of your flips?
• Where in town are your properties? 
• How do you come up with your ARV? 
• How do you come up with your rehab budget? 
• Do you include holding costs in your profit estimate? 
• Do you have stats for how accurate your ARVs have been?

... And many other questions as the conversation went on.

So, I had a number of questions for myself. I simply wanted to ask the community what they look for.

Nick C. · Answer

There's only one question to ask - can you find good deals??

If the answer is yes you should work with them. True 95% of them don't know what they're doing, but who cares? You shouldn't be relying on the wholesaler for anything other than the address (and sometimes they screw that up). You should be pulling your own comps and coming up with your own repair estimate. If you're relying on the wholesaler for that, you're playing with fire.

Who cares if it's their 1st deal or their 100th. If it's a good deal, it's a good deal. If they're incompetent help them through the process. Do that and the next time they get a good deal guess who they're going to call. If they're new and don't know what they're doing 9 times out of 10 the house will be grossly over priced, but also it could be underpriced. Even better for you!

My guess is no matter what they answer to your questions 99% of the houses you're going to get have no hope of being a deal. The biggest problem with wholesalers is the aforementioned low bar of entry and the gurus pushing it on people who are unhappy with their situation like it's some kind of gateway to easy riches. It's just a job, only it requires more work and stress for very little pay for a very long time.

Kuba F. · Answer

@Eric Sztanyo you'll eventually find how  good comedy this is.  Trust comes over time from performance, and that legit 5% can be a useful part of your deal flow, but really as @Jay Hinrichs said, they are just providing you leads so don't worry if it's their first, or 100th, and you don't need to interview them like you're getting married.  Does the deal make sense? -- is the only question, and that's one you have to ask of yourself.

Jay Hinrichs · Answer

in yoiur situation I would just get the lead from the wholesaler and you do your own due diligence.. if they want to provide due diligence thats find but it can't be trusted its your dollars not theirs.

approach just like your buying any other asset.. you do the ground work and satisfy yourself on condition and values etc.... do not rely on the seller ( wholesaler).. as human nature creates an atmosphere of puffing to down right mis representation  LOL...

Jay Hinrichs · Answer

was not berating you ,,, you asked what questions to ask.. those are the questions I ask.. as 95% of wholesalers you will run into ( and you will find this out for yourself) are new  have never done a deal.. have no clue as to what they are doing and are not capable of answering your 12 questions with any accuracy  they just want to pimp deals and be done..   Again there a always the exceptions great if you find one... but you will find this out for yourself... look at threads that are titled

what the heck is wrong with wholesalers

you will see many other venting their frustrations with these folks.  the bar to entry is below low ... so generally speaking thats what you get..

Each bigger market I fund deals in will have one or two that are legit.. but thats the extent of it generally.

Account Closed · Answer

Just like any job you need to find qualified individuals that can provide the details on a property they are promoting.

Jay Hinrichs · Answer

Account Closed  most wholesalers are not agents and their comps are pie in the sky... this is what really erks most investors when wholesalers send over their deals that are not deals.  big waste of time I wont even respond to a wholesaler anymore

Account Closed · Answer

That is what you have to find out before you move forward with any wholesaler.

Account Closed · Answer

As an investor, licensed agent & a wholesaler in Orlando I always tell my buyers that I'm an agent for other investors on any deal that I don't have an equitable interest in the property (contract) or I tell them I have a contract on the property. Also I give them as much info as possible on the condition of the property and estimated cost of rehab. Also I give them reliable comps on the property and my calculations as to the profit potential if they decide to rent it or if they want to fix it up and resell it. That is the questions you need to see if any wholesaler can provide for you.

Eric Sztanyo · Answer

Yup. Good advice @Jay Hinrichs. Thanks.

What questions should I ask a wholesaler in an interview?

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