Why am I running into the WORST wholesalers?
Hey BP!
In 2017, so far I have run into about eight wholesalers who were:
-Marketing properties they did not have under contract
-Daisy-chaining deals 3 and 4 deep
-Marking properties up 200 or more percent
-Dealing with properties that were not theirs to market
Is this normal? Or did I just manage to dive to the bottom of the pool?
More importantly, what are some good ways up front to tell if I am dealing with a reputable wholesaler? Thanks for the advice!
Most Popular Reply
I got tired of dealing with bad wholesalers also, so once I found a really good legitimate one, I partnered up with them to work with me fulltime. I provide them with leads, they do all the leg work and negotiations and acquisitions of deals for me, then once they have them under contract, I have first right of refusal to purchase the property at the contracted amount, plus I pay them a flat acquisitions fee. On the ones that I choose not to purchase myself, they get to wholesale them to whomever they choose for whatever markup, and once sold, they pay me a flat fee for the leads I provided. Its a win win.
I do try to educate wholesalers who contact me with bad deals, it happens daily. Usually someone has sold them on the ideal and thrown them to the wolves with no real direction. I typically see the same issues you do, inflated ARV's. misleading Repair Costs, etc. The majority of the wholesalers out there are more like bird dogs working for someone else and trying to learn. Most get burnt on any deals they do generate and only last a few months trying.
My biggest pet peeve are the ones who call me representing themselves as an investor wanting to buy one of my homes, when they know they don't have any money and have never purchased a property in their lives. If they said they're a wholesaler or even working with investors looking, that's one thing. But, I've even asked, so are you the investor or are you wholesaling? And they start scrambling for words and usually lie. When they do lie, I get their contact info and tell them Ill send them a purchase agreement and wiring info. I usually never hear from them again. Be YOU, be Honest, be Successful!! There's nothing wrong with wholesaling, if done right.