Wholesaler perception as unethical?

23 Replies

My first post I believe to BP although I’ve read numerous posts within multiple forums. I get a feeling from the community here - specifically buyers - that the wholesaler is unethical 99.9% of the time and not to be trusted with deals. I’m ready to begin working on moving into real estate starting with wholesale to fund other eventual real estate strategies (flips, buy/hold, multi tenant, etc). However, will this negative connotation of wholesalers in general cause setbacks? Thanks in advance for your thoughts.

@Eddie Garcia I have also been reading alot of the "wholesaler bashing" that has been going on in BP forums. It seems that there is a general consensus that wholesalers do not add value to the transactions and are usually dishonest and unethical in the way they conduct their business. Not to even add in the fact that most claim its illegal. 

My thoughts are this, Wholesalers can and do add a value to the realestate community. They generally market for off-market properties and provide a service to property owners that want to sell their property without having to dress it up for the MLS. I tend to think of wholesaling as the "pawnshop" alternative for houses. Do you think the WE BUY GOLD people pay what the piece of jewelry is worth? No.. they pay a scrap price, that price is well below market value for a complete piece of jewelry but who wants a broken ring? Its the same concept. WE BUY GOLD businesses and pawn shops offer a service. So do wholesalers.

As far as the legality goes, consult a local attorney. Personally I feel certain that there are more areas that you can assign equitable interest in contracts vs those you can't. However it is a gray area almost everywhere. Of course the Licensed side of RE isn't going to support the unlicensed brokering of houses regardless of the method used. But I say if you do it transparently and ethically, then rule the gray area... 

Originally posted by @RJ Browning :

@Eddie Garcia I have also been reading alot of the "wholesaler bashing" that has been going on in BP forums. It seems that there is a general consensus that wholesalers do not add value to the transactions and are usually dishonest and unethical in the way they conduct their business. Not to even add in the fact that most claim its illegal. 

My thoughts are this, Wholesalers can and do add a value to the realestate community. They generally market for off-market properties and provide a service to property owners that want to sell their property without having to dress it up for the MLS. I tend to think of wholesaling as the "pawnshop" alternative for houses. Do you think the WE BUY GOLD people pay what the piece of jewelry is worth? No.. they pay a scrap price, that price is well below market value for a complete piece of jewelry but who wants a broken ring? Its the same concept. WE BUY GOLD businesses and pawn shops offer a service. So do wholesalers.

As far as the legality goes, consult a local attorney. Personally I feel certain that there are more areas that you can assign equitable interest in contracts vs those you can't. However it is a gray area almost everywhere. Of course the Licensed side of RE isn't going to support the unlicensed brokering of houses regardless of the method used. But I say if you do it transparently and ethically, then rule the gray area... 

not taking a position here but there are plenty of homes that sell on MLS as is.. just look at any bank OREO non of them ( banks use whoelsalers to sell there boarded up foreclosures.. they use legit auction companies that have real estate licenses in the markets they serve or they list with OREO brokers.. those that have not ready for prime time can list and sell as is.. happens every day.. that's not an argument.. but I get those that are distrustful of any one of authority type thing.. same folks don't have checking accounts etc.

the ethics argrument only comes to play when taught by on line gurus

1. tell the seller your the cash buyer when you are not... and no one can tell me this is not how its done 99% of the time I get 10 or more yellow letters each and every week that say the same thing and I know those are not real buyers.  so that's a moral dilemma.. not telling the truth up front in your advertising.

2. subject to your partners approval when you have no partner.

3. leading sellers on to think they have a solid deal when in fact the ONLY way it will close is if you can resell it.. this causes a lot of harm to those in distress IE foreclosure I have bought many a home that a wholesaler could not get their act together and I stepped in and bought it behind them.

and then you have license laws.. I mean if licenses were not required to bring two parties together for compensation IE assignment fee then for sure I would not be licensed I don't like having to do CE all the time.. and pay dues etc etc.. 

those are what folks talk about.

the idea that wholesalers are the only ones that can sell messed up properties because realtors can't that simply not true.. A broker will list it as is where is and price it accordingly.  And it will sell.. especially right now.

Wholesalers are looked upon as unethical because they often inflate ARV, underestimate repairs and tell the seller they’re a cash buyer when usually they have no cash.

I’m not saying there is no value there, I’m saying most wholesalers are like what I mentioned above.

As far as it being illegal or not that depends on the state

Regarding wholesaling, I'm taking a TX approved RE licensing course that describes wholesaling as a legal assignment of contract. I was a little surprised to see this even in licensing course.

Hi @Eddie Garcia

I think what you are referring to specifically is "Contract assigning". Which is a form of "Wholesaling". In itself "contract assigning" is in no way unethical (in my opinion). You have something under contract, you plan on fixing it up and selling it, then I come along and offer you 10K more than you paid "as is where is" and you sign your contract over to me. In itself there is nothing wrong with that. The problem comes in when you couldn't buy it unless I show up and offer you more. Then it's just a shell game, that's what people in general have a problem with. 

@Jay Hinrichs

not taking a position here but there are plenty of homes that sell on MLS as is.. just look at any bank OREO non of them ( banks use whoelsalers to sell there boarded up foreclosures.. they use legit auction companies that have real estate licenses in the markets they serve or they list with OREO brokers.. those that have not ready for prime time can list and sell as is.. happens every day.. that's not an argument.. but I get those that are distrustful of any one of authority type thing.. same folks don't have checking accounts etc.

I can't help but get the impression that you are indeed taking a position here. It appears to me that you would like everything to go through the MLS just because it can. Yes distressed properties are sold everyday on the MLS. Doesn't mean that everyone wants to go that route. And if I contract a property before it hits the MLS do I not have a right to do with my equitable interest as I see fit? I found the property, I negotiated the purchase, I have all options and remedies available to me that anyone else would. I understand the intent or ability when signing the contract. Save that discussion solely for those that default on that agreement.

the ethics argrument only comes to play when taught by on line gurus

I understand that most guru's teach some unethical approaches. I wont even try to defend that subject. However some do teach the core concept of finding a great deal, contracting that deal, and assigning that contract for a profit, while being transparent to all parties involved. And in my eyes, thats an ethical strategy. 

1. tell the seller your the cash buyer when you are not... and no one can tell me this is not how its done 99% of the time I get 10 or more yellow letters each and every week that say the same thing and I know those are not real buyers. so that's a moral dilemma.. not telling the truth up front in your advertising.

I can tell you this is the way I do it, I tell the seller that I work with a group of cash investors ( I do ) and that we purchase these properties to rehab and resell. I also let them know that while I will be contracting under my name that I will most likely be closing under a different entity depending on which partner (cash investors are partners in these transaction, no?) expresses the most interest in the property. 

2. subject to your partners approval when you have no partner.

Please see above

3. leading sellers on to think they have a solid deal when in fact the ONLY way it will close is if you can resell it.. this causes a lot of harm to those in distress IE foreclosure I have bought many a home that a wholesaler could not get their act together and I stepped in and bought it behind them.

I know of alot of agents causing harm to home owners as well. Have you ever heard those stories? I can't solve the problem of bad apples in every batch.

and then you have license laws.. I mean if licenses were not required to bring two parties together for compensation IE assignment fee then for sure I would not be licensed I don't like having to do CE all the time.. and pay dues etc etc.. 

A couple of things here. You are a licensed to represent the seller. You have a responsibility to represent the sellers best interest. That should indeed require licensing and oversight. However, I have no responsibility to the seller other than what we agree upon in writing. If they agree to the deal being contingent upon whatever contingencies then that is 100% legal and ethical. Once I enter into this agreement with the seller I am not taking compensation for bringing them to a buyer. I am fulfilling my obligation to my agreement with them. If that agreement is fulfilled by an assignee then that is ok, because my contract was assignable. Now if I signed an agreement with them and said, I'll find you a buyer at x amount, if you will give me x amount... then..... 

the idea that wholesalers are the only ones that can sell messed up properties because realtors can't that simply not true.. A broker will list it as is where is and price it accordingly. And it will sell.. especially right now.

And the idea that the MLS is the only option available to a seller is ludacris

there is no equitable interest in a contact as done by wholesalers  that's the biggest misnomer going.

but of course unless you are in front of a trier of fact that can be debated.

of course MLS is not the only option. Hell I have not listed anything on MLS in 15 years LOL .. now my wife does but I don't and we build new home communities.. so those are not the Provence of wholesalers.

Every market is different that's for sure..

I just wonder why we just don't get rid of real estate licensing and that whole thing and just all wholesale and do contracts without any over site.. do you have any thought on that.. why is there a real estate agency. ?  @RJ Browning

Ya know in China there is no real estate agency anyone is free to do what they want.  

I for one would love to stop paying dues and going to CE.. 

The biggest complaint from those who don't wholesale, which I feel is justified, is the inability to close on the property if you can't find an end buyer. If you pretend you can close, when you really can't, and then cancel on a contract because you can't find a buyer, that's pretty unethical. If you tell a seller that you don't intend to close yourself but work closely with a large group of investors who can, and you will bring them a buyer for a fee that the buyer will pay, I don't see a problem. 

The other big complaint I see if robbing a seller of their equity. If you're presenting an offer and telling a seller that it's the most money they're going to get, it's unethical. I walk through the numbers with potential sellers and give them the comps so that they can make an informed decision. I make it very clear that I intend to make a profit and that the only way for me to accomplish that is to buy their property for under market value. Sellers are motivated for different reasons but if they're willing to sell at a discount then nine times out of ten it's because they have a problem that needs to be solved. 

I have the ability to close on every deal we put under contract but I still choose to wholesale about half. My risk tolerance on a deal is probably lower than most and I am happy to let others take on the big projects. 

Out of several hundred deals, I have never had a seller come back and complain or be upset at a closing table. I have, however, had countless tears of joy and many thank you cards. 

Originally posted by @Braden C. :

The biggest complaint from those who don't wholesale, which I feel is justified, is the inability to close on the property if you can't find an end buyer. If you pretend you can close, when you really can't, and then cancel on a contract because you can't find a buyer, that's pretty unethical. If you tell a seller that you don't intend to close yourself but work closely with a large group of investors who can, and you will bring them a buyer for a fee that the buyer will pay, I don't see a problem. 

The other big complaint I see if robbing a seller of their equity. If you're presenting an offer and telling a seller that it's the most money they're going to get, it's unethical. I walk through the numbers with potential sellers and give them the comps so that they can make an informed decision. I make it very clear that I intend to make a profit and that the only way for me to accomplish that is to buy their property for under market value. Sellers are motivated for different reasons but if they're willing to sell at a discount then nine times out of ten it's because they have a problem that needs to be solved. 

I have the ability to close on every deal we put under contract but I still choose to wholesale about half. My risk tolerance on a deal is probably lower than most and I am happy to let others take on the big projects. 

Out of several hundred deals, I have never had a seller come back and complain or be upset at a closing table. I have, however, had countless tears of joy and many thank you cards. 

how is your deal flow these days.  I was funding a bunch of stuff in Orlando and the bigger wholesalers have left the business because the deals have really dried up.. I do see this as a  nature progression.. wholesaling was a whole lot easier 5 to 7 years ago with the low hanging fruit.. now to me in certain markets not sure why anyone would do it.. got to be pretty tough..

It will always work in low value asset areas were there are tons of vacant homes or D class rental stuff were sellers just want out.

I can see that for sure .. I have funded probably 3k to 4k of those over the last 2 decades. 

PS those wholesaler shops were all licensed they were just too high volume to take the risk of the state shutting them down there in FLA

Contract Assignment is a fine way of getting started in your investing career.  THAT IS WHY BIGGERPOCKETS TEACHES IT.

Where WHOLESALERS get in trouble is that many don't know what they are doing.  

Wholesaling has been recently talked among real estate gurus as a way to invest in real estate without putting any money into the deal.  This is true but some bad practices that give wholesalers a bad name are:

1.  Not putting money in escrow.

2.  Not understanding who they are selling to

3.  Are not upfront with the sellers that they may assign the contract.

4.  Legality of the practice (You'll hear alot about that here)

5. Not accurately determining the ARV and the PP

Now I've seen enough bashing forum to know what will be happen.  I throw in my 2 cents that there are many bad wholesalers just as their are many bad agents.  The problem is their is no board to hold wholesalers accountable. @Eddie Garcia   The way to preserve your repuation is the zeal, honesty, and trust you build with everyone you meet.

I just wonder why we just don't get rid of real estate licensing and that whole thing and just all wholesale and do contracts without any over site.. do you have any thought on that.. why is there a real estate agency. ? 


I'm not against licensing by any stretch of the imagination. I'm against those that are licensed feeling like they have more entitlement and more of a monopoly over transactions than what they actually do. In my first response to the OP I mentioned the analogy of the WE BUY GOLD business. Just because I think there is a legitimate niche for that service doesn't mean that I think Jewelry stores should go out of business. I think that when it comes to owners and properties that there are many different scenarios. As a wholesaler there are scenarios that I can't provide a service to.. I understand that. However, there are scenarios that I can. That is why my marketing campaigns are targeted towards those situations. 

@Jackson Pontsler   Every state has their rules on this..  so I got tired of wondering in MY state how they handled unlicensed brokering IE bringing two unrelated parties together with expectation of compensation and this is done through marketing choose the method e mail  flyers craigslist etc.

so I check on a mail chimpanzee I got from a wholesaler and sent it to my state regulator with the question 

Hey why do I have to be licensed and they don't.. 

here was my reply 

State of Oregon - Real Estate Agency

Frances Hlawatsch | Financial Investigator

Best regards,

Thank you again for the information, if I have further questions for you during the investigation I will certainly reach out.

The Agency is well aware that unlicensed “wholesalers” are rampant in our jurisdiction. Addressing the problems is like trying to put out small individual fires in a forest that is burning. The Agency’s investigations are complaint driven, so we rely heavily on the public, and our licensees to bring these individuals to our attention.

Thank you for getting back to me. The advertising copy you attached to your email came out perfectly and will be very helpful. Thanks!

So there you go.. and if you listen to BP on the wholesaling subject they encourage all to check with there state everyone has a different spin on this.

the ones I know that are like Oregon are

OHIO 

Florida 

but like my regulator said unless someone gets a complaint filed against them there is no way for the state to do anything but once they do... its going to cost that person in legal fees a fine and a cease and desist.. I know I have been onb the butt end of this before..  and so have a few of my bird dogs.

I would be just as happy to see us not need real estate licenses so I did not have to pay fees and do CE.. 

but that's not the law of the land. 

Originally posted by @Jay Hinrichs :
Originally posted by @Braden C.:

The biggest complaint from those who don't wholesale, which I feel is justified, is the inability to close on the property if you can't find an end buyer. If you pretend you can close, when you really can't, and then cancel on a contract because you can't find a buyer, that's pretty unethical. If you tell a seller that you don't intend to close yourself but work closely with a large group of investors who can, and you will bring them a buyer for a fee that the buyer will pay, I don't see a problem. 

The other big complaint I see if robbing a seller of their equity. If you're presenting an offer and telling a seller that it's the most money they're going to get, it's unethical. I walk through the numbers with potential sellers and give them the comps so that they can make an informed decision. I make it very clear that I intend to make a profit and that the only way for me to accomplish that is to buy their property for under market value. Sellers are motivated for different reasons but if they're willing to sell at a discount then nine times out of ten it's because they have a problem that needs to be solved. 

I have the ability to close on every deal we put under contract but I still choose to wholesale about half. My risk tolerance on a deal is probably lower than most and I am happy to let others take on the big projects. 

Out of several hundred deals, I have never had a seller come back and complain or be upset at a closing table. I have, however, had countless tears of joy and many thank you cards. 

how is your deal flow these days.  I was funding a bunch of stuff in Orlando and the bigger wholesalers have left the business because the deals have really dried up.. I do see this as a  nature progression.. wholesaling was a whole lot easier 5 to 7 years ago with the low hanging fruit.. now to me in certain markets not sure why anyone would do it.. got to be pretty tough..

It will always work in low value asset areas were there are tons of vacant homes or D class rental stuff were sellers just want out.

I can see that for sure .. I have funded probably 3k to 4k of those over the last 2 decades. 

PS those wholesaler shops were all licensed they were just too high volume to take the risk of the state shutting them down there in FLA

Our volume of deals has dropped from where it was in 2010-2013 but the lack of supply has increased our net on each deal. We send out over 100k pieces of mail per year though, so I am not sure how anyone new could compete unless they had substantial backing. 

We haven't had a D class property in a very long time, although those were the majority of our deals several years ago. As times have changed, we've adapted and continue to try and zig when others zag. 

I am licensed as well, and have been since I started. After three years I went ahead and got my brokers license so that I didn't have to pay a fee for each deal I did. Retail real estate is not for me though and I have the license to stay out of the gray area and save 3% on listing fees. 

Originally posted by @RJ Browning :

I just wonder why we just don't get rid of real estate licensing and that whole thing and just all wholesale and do contracts without any over site.. do you have any thought on that.. why is there a real estate agency. ? 


I'm not against licensing by any stretch of the imagination. I'm against those that are licensed feeling like they have more entitlement and more of a monopoly over transactions than what they actually do. In my first response to the OP I mentioned the analogy of the WE BUY GOLD business. Just because I think there is a legitimate niche for that service doesn't mean that I think Jewelry stores should go out of business. I think that when it comes to owners and properties that there are many different scenarios. As a wholesaler there are scenarios that I can't provide a service to.. I understand that. However, there are scenarios that I can. That is why my marketing campaigns are targeted towards those situations. 

 if you see my post above you will see the response I got from the state of Oregon when I sent a wholesaler direct advertising I received via e mail.. pretty clear in our state.. but also pretty clear unless you piss someone off and they turn you in.. or the real estate brokerage community actually bands together to turn in every wholesaler they run into.. its just like speeding we all do it.. right.. 

so its the same thought process you have thinking agents feel they are on higher moral ground.. .. they are on legal ground but there are crappy agents for sure.. I have owned 3 brokerages and fired many a crappy agent. LOL.. 

this is the response I got when I asked my state why an unlicensed wholesaler can advertise like an agent. 

State of Oregon - Real Estate Agency

Frances Hlawatsch | Financial Investigator

Best regards,

Thank you again for the information, if I have further questions for you during the investigation I will certainly reach out.

The Agency is well aware that unlicensed “wholesalers” are rampant in our jurisdiction. Addressing the problems is like trying to put out small individual fires in a forest that is burning. The Agency’s investigations are complaint driven, so we rely heavily on the public, and our licensees to bring these individuals to our attention.

Thank you for getting back to me. The advertising copy you attached to your email came out perfectly and will be very helpful. Thanks!

her words not mine

@Jay Hinrichs I understand as I stated in my previous point the legality is always questionable and I don't wish to bash anyone.  I think we can both agree that the key to success in real estate is: your relationship with whoever you deal with.  Doesn't matter if you're broker, flipper, property manager etc if you can't build meaningful relationships in this buisness you will have no long term success.

Originally posted by @Braden C. :
Originally posted by @Jay Hinrichs:
Originally posted by @Braden C.:

The biggest complaint from those who don't wholesale, which I feel is justified, is the inability to close on the property if you can't find an end buyer. If you pretend you can close, when you really can't, and then cancel on a contract because you can't find a buyer, that's pretty unethical. If you tell a seller that you don't intend to close yourself but work closely with a large group of investors who can, and you will bring them a buyer for a fee that the buyer will pay, I don't see a problem. 

The other big complaint I see if robbing a seller of their equity. If you're presenting an offer and telling a seller that it's the most money they're going to get, it's unethical. I walk through the numbers with potential sellers and give them the comps so that they can make an informed decision. I make it very clear that I intend to make a profit and that the only way for me to accomplish that is to buy their property for under market value. Sellers are motivated for different reasons but if they're willing to sell at a discount then nine times out of ten it's because they have a problem that needs to be solved. 

I have the ability to close on every deal we put under contract but I still choose to wholesale about half. My risk tolerance on a deal is probably lower than most and I am happy to let others take on the big projects. 

Out of several hundred deals, I have never had a seller come back and complain or be upset at a closing table. I have, however, had countless tears of joy and many thank you cards. 

how is your deal flow these days.  I was funding a bunch of stuff in Orlando and the bigger wholesalers have left the business because the deals have really dried up.. I do see this as a  nature progression.. wholesaling was a whole lot easier 5 to 7 years ago with the low hanging fruit.. now to me in certain markets not sure why anyone would do it.. got to be pretty tough..

It will always work in low value asset areas were there are tons of vacant homes or D class rental stuff were sellers just want out.

I can see that for sure .. I have funded probably 3k to 4k of those over the last 2 decades. 

PS those wholesaler shops were all licensed they were just too high volume to take the risk of the state shutting them down there in FLA

Our volume of deals has dropped from where it was in 2010-2013 but the lack of supply has increased our net on each deal. We send out over 100k pieces of mail per year though, so I am not sure how anyone new could compete unless they had substantial backing. 

We haven't had a D class property in a very long time, although those were the majority of our deals several years ago. As times have changed, we've adapted and continue to try and zig when others zag. 

I am licensed as well, and have been since I started. After three years I went ahead and got my brokers license so that I didn't have to pay a fee for each deal I did. Retail real estate is not for me though and I have the license to stay out of the gray area and save 3% on listing fees. 

I was funding deals for Altura . in Orlando.. I think anyone who thinks wholesaling in todays market is the road to rich's does not understand how hard it is and how capital intensive it is..  100k post card or mailing is beyond most ability to fund or track for that matter.. Along with license issues every large wholesaler that I fund deals for in Florida is licensed..  

You have to be licensed to do someone elses car brakes/house electric/plumbing/cut kids hair for profit. You can legally do your own with no license.

If you decide to open up a shop and then have me "sell" you my car/house/kid for $1. You do the brakes/electrical/plumbing/cut kids hair and then "sell" me the car/house/kid back for $120 is that legal and ethical?

Some say "yes"

Others say "it is a veiled attempt at skirting regulations".

Who will decide in the end? The judge or regulator who is handling the criminal case. OR the judge presiding over the civil case when someone brings a suit.

What is saved?

Spending a couple hundred dollars to get licensed and working in the open.

Do I personally care?

Not at all, it keeps the regulators busy and away from measuring the distance of my signs to the road/ font size of brokerage information and doublechecking that I didn't miss a checkmark in a box.

My intent is not to use wholesaling as a primary strategy to financial freedom but more so to build funds for other RE investment. Possibly 5-15 good solid honest deals.

From what I’ve read it looks like the general consensus is a broker / RE license provides a level of credibility BUT not necessarily required if it’s not your primary strategy.

@Eddie Garcia also make sure you check your state laws as that varies by state.

Besides what’s mentioned above I think we should also clarify what investing is. I’m not sure wholesaling or being a real estate agent is really investing.

It’s a way to make an income which is a job. Investing is I stick some money and I make a return. It shouldn’t require hours and hours of my time. Flipping, wholesaling and being an agent all sound like jobs to me.

Lending and landlording (with a manager) is more like investing.

But that’s a debate for another day

@caleb understood. Investing certainly should mean less hours. My goal isnt to become a realtor/broker but in fact exactly what you described. I have some cash to invest but looking to increase my reserves by wholesaling several properties (if possible). As far niche/strategy I’m still looking to finalize that. Haven’t yet decided what works for me.

@Eddie Garcia ,

There are many that say Wholesaling is a quick way to some cash and I will disagree. Just as I disagree that being an Agent is a quick way to cash. Most wholesalers make the money I spend on advertising look like chump change. Those 5-15 deals are not going to be just profit centers. Expect to spend some real money getting those leads (like hundreds to thousands for each one). Generating and working those leads takes some real time and real energy. Before I got my first closing I spent over 5 grand just in advertising etc. That was with a well known company behind me helping to generate leads (a different one).  

Obviously this is not related to the original "ethical" question. But agents don't just open doors and cash checks. Wholesaling is no easier and no more fruitful. over 80% of agents fail out in year one and an additional 80% of whats left on year two. There is no metric for wholesalers who fail to launch, but I am sure it is just as bad. Neither is by any means easy. If I was looking at throwing some cash up quick, I would get a part time job and just throw those paychecks into an account. Wholesaling is a full time job with zero guaranteed paycheck, but guaranteed expenses (just like being an agent). Not trying to kill your motivation or say wholesaling is wrong, just make sure you know odds are it's paying less than minimum wage in the beginning. If you make 10 deals in the first 2 years, you will stick with wholesaling as a career because you have a knack. If you don't you will find another avenue to make money to invest.

Good luck in whatever you decide!

@Mike Cumbi - thanks for the advise. I'll take into consideration for sure. I mean if I spent $800-$1000 to make a potential $5-10k (minus expenses and cost) I would def consider that a win and time well spent. I understand the energy and time it would take. Spending 5-15 hours a week outside of my professional living is definitely worth the effort if I can get those results. Doing your research so you're marketing to the correct potential market is also key.

@Eddie Garcia @RJ Browning

I agree that wholesalers can and do add value BUT the practice has become very popular and it can be hard to weed through all of the people who you don't want to do business with.  

I think wholesaling is valid way to enter the REI. Although not the fit for me. I will say though that you need to distinguish yourself from the pack of wholesale people on social media who just have shadiness written all over them.

One simple question is why on God's green earth would anyone get into wholesaling without getting a Real Estate License in their state first??? 

One just to protect themselves.  Two just to give them one ounce of trustworthiness that they know what their talking about.  

Most house flippers I have met seem to favor REOs off the MLS or simply contacting motivated sellers themselves. A lot of experienced flippers have been burned or almost burned by wholesale deals.