What are your biggest warnings about wholesaling?

Question

Ethan Summers · Answer

@Tyler Scott Hello Ive been wholesaling in my very competitive market for going on 3 years now!Ive sold over 55 properties and in my opinion the common misconception is that wholesaling is easy. If finding a deal under market value was an easy task flippers would have no need for individuals that wholesale. The most important thing ive learned is how to stay in the forefront of not only potential sellers mind, but also staying connected and close to great buyers that you can trust who have no issue watching you make money on a deal that they are funding! I envy you and wish I even had an instrest in such a challenging but rewarding business model at such a young age. @Sean Walton gave some great advice take heed and go kill it!!!!

Account Closed · Answer

@Tyler Scott  Here's a pretty good forum post on wholesaling to get you started:https://www.biggerpockets.com/forums/12/topics/380162-went-bankrupt-trying-to-wholesale-heres-my-sage-advice

Sean Walton · Answer

Hi @Tyler Scott welcome to BP.

If there are a lot of people in your market you can spend a lot of money on marketing before you find a deal. I've spent about $4000 so far with no deals. I have more money than time so I'm not doing things you can do such as door knocking, driving for dollars, cold calling. If there is no one else in your market wholsailing or marketing for off market deals then you can spend a lot of time and money educating your market that it is socially acceptable to sell at a discount to you.

Some states are cracking down on assigning of contracts if you have no intent to close on the contract if you can't find a buyer it can be considered brokering without a licence. Do some research into this. i know California only allows you to assign 8 contacts per year. You may want to get your real estate license as a way to avoid this issue but then you need to disclose to the seller that you have a non-agency agreement with them.

You are young and have a lot of time. I would say keep educating yourself. Listen to all the podcasts on wholesailing and flipping. Learn how to determine repair costs and ARV. Gurus get a bad name and don't pay anyone more than $1000 for a course or promise slices of your first deal but there are some good programs out there. Check out the BP reviews of courses/gurus see if any sound appealing.

Try and see if there is anyone in your area doing what you want to do and offer to bird dog for them if they'll show you the ropes.

Louis Davis · Answer

@Tyler Scott There are a lot of business where you ask "why isn't everybody doing it?" The reason being is because not everybody realizes the work that goes into these businesses. The thing is, you aren't missing anything. What you are reading is the facts. The only thing you are missing is taking action. Get out there and start talking to people in your market. Find out who is wholesaling in your area to help you gain more information. There isn't much to the business outside of locating a seller that will sell you the property at a discount, then finding the buyer to fund the deal with your markup in there. Everything else is a learning experience.

Hope this helps,

Louis

John Sterling · Answer

Tyler

I have some experience with this. Finding true wholesale deals IS the challenge in my market.  Then finding the rehabbers/flippers who you can trust to deliver and close is the next issue.

Your market may certainly be different.

John

What are your biggest warnings about wholesaling?

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