The Truth about Wholesaling!

The Truth about Wholesaling!

Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes

There are so many people and companies out there who claim to be wholesalers and many more newbies who claim to want to start out in wholesaling as a means to get started in the biz.

Let me tell you about a recent experience with a so-called wholesale deal: You be the judge too!
A property was offered to me as a wholesale purchase.
It was offered at $270k with only $10k in rehab (so claimed the wholesaler) and the exit value they provided was $350k. With these numbers, the deal is at 80% of value which is pretty much the most I could pay. I explained that the exit price appeared to be on the high side (just from my expert knowledge of the area) and that $10k in rehab is pretty rare. I was then told that they may be willing to sell to me at $260k (so obviously they had at least $20k in mark-up at their OG price, which by the way is fine if the deal had a good spread, this one was bare)
With that reduction in mind, I went to the property.
It was very close to the freeway and the freeway noise could be heard quite loudly from the yard and slightly from the inside with all doors closed. This decreases values some what. Next, I found that the condition of the property was no where close to $10k in minor rehab. The kitchen had no place for a refrigerator with the current layout and it was poorly designed. The cabinets appeared to be newer, but done cheap and laid out poorly. The countertops needed replacement to granite, and new kitchen appliances. All flooring needed to be replaced, there was some foundation issues from the earthquake of 94' (Northridge quake), the bathroom was in need of a full gut and rehab new, all bedrooms needed new light fixtures, closet doors, and some electrical upgrades, plus the driveway needed to be re-surfaced and the chain-link fence removed and replaced with a more appropriate wood fencing for curb appeal. Both interior and exterior needed paint, and all windows should be replaced new (requiring some minor stucco repairs as well.)
After my evaluation, it was determined that the exit value was $300k ($319k as the max high list point) and the rehab was $30k and could be $35k.
At a $260k purchase and $30k rehab with $310k exit, this deal is at 93.5% As such, it is an oxymoron to use the word deal to describe this investment. I only pray that some sucker does not get screwed on this property.

The moral of the story: To be a true wholesaler, you must give out true and accurate figures, otherwise you make a bad name for yourself.

To be a true wholesaler you need these 3 main ingredients:
1. The ability to contract RE at great discounts.
2. The ability to build a real buyer's list (real cash buyers with a real proof of funds)
3. Ability to evaluate your market and ability to peg rehab numbers. Both of these require a vast knowledge of the local market conditions and the know-how to quote repair items.
Without ALL 3 of these items, you CAN NOT be a successful wholesaler.
To add a 4th item, you should be honest, provide accurate numbers, and provide as much due diligence to your potential buyers as possible. This will allow you to keep your buyers coming back for more deals.

669Reply
11,042 views

Most Popular Reply

Member since 2010 · 16 posts · 124 votes
15y

Maybe they are a new company that have ambition but lack some experience in evaluation. I hope you left the same results you described in your post on their website or emailed them what you found. Maybe it will give them some insight as to what to do/not to do before putting another property like this on the market. All of us begin making dumb mistakes and misjudgements, it's only bad when we ignore feedback from those who can offer wisdom.

See this reply in the discussion

911 Replies

Jump to latestLatest
  • Accountant · Denver, CO · Member since 2012 · 154 posts · 61 votes
    9y

    @Erica M Chambers charge what the market will bear.  When a rehabber buys a house from you and sells it, they don't mark up the price by a percentage of their cost so that the end buyer has a "fair price".  They check comps and sell their house to the highest bidder for what the market will bear. Maybe their "fee" or "profit" whatever you want to call it for rehabbing the house is $0 or $10,000 or $500,000 just depends on how good the deal was and how good the rehab was and what the market was willing to pay on the sale side.  

    Nonetheless they will sell it for the best offer they get and in my opinion you should do the same.  I've done wholesale deals from $1,000 to $40,000, it just depends on the deal and if it makes sense for the buyer. But how much I make or my percentages are irrelevant, get the house to the buyer at a price he wants to buy at.

    For example (just for simplicity)if I buy a house for $1 with an "as-is" Value of $100,000.  I am NOT going to sell it for a wholesale fee of $10,000 (10% of gross margin) I'd wholesale it to the highest offer I get.  In my market people pay 70-80% of Value depending on area.  So i'd wholesale that for a minimum of $70,000. My buyer would be happy as heck too that he got a great deal.

    Just make sure you know at what price it is a good deal for your buyer, and then make your fee however much it is you got it under that price.

  • Philadelphia, PA · Member since 2017 · 26 posts · 11 votes
    9y

    Thank you @Account Closed and @Will Barnard.  I assumed that there was an industry standard or "rule" regarding wholesale mark ups.

  • Will BarnardPro Member
    Moderator
    OP
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    9y
    Originally posted by @Erica M Chambers:

    Thank you @Account Closed and @Will Barnard.  I assumed that there was an industry standard or "rule" regarding wholesale mark ups.

     Make sure you read my post carefully, clearly Baltazar did not. There is no "industry rule" and I was very specific that every deal and every market is different. My example of 10% of the spread was something that worked out for both sides in my market at the time, it changes every time though and was merely an example of my personal past experience, not a rule.

  • Wholesaler · Waldorf, MD · Member since 2015 · 459 posts · 245 votes
    9y

    @Erica M Chambers, as @Will Barnard stated it depends on a lot, but especially your negotiation skills and your market. I wholesale in a market where you can get 100K ASSIGNMENT FEES.  I stress assignment & not doing a double close, in other words the buyer knows what I put the property under contract for and she/he knows the fee they are paying & doing it gladly because it is a DEAL for them. I myself haven't done a 100K deal, but I'm working on a deal know where IF it closes I will reap 50K+. The deal has been dragging on for 2 mos, so I'm praying it closes within the next 2 weeks. I have done a 1K deal, it was my second deal ever.

  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    9y

    I can't believe this thread is still standing strong.....Alot of interest in Wholesaling!

  • San Diego, CA · Member since 2015 · 77 posts · 22 votes
    9y

    When I started getting serious about REI, I was planning to do flips here in SoCal. It turns out that with the thin margins, high cost and my lack of experience, I decided that this market has too much risk for me.

    That's why I decided to try wholesaling in a different part of the country. I want to provide a good service for my investors and sellers, gain a good reputation and finally become profitable. (I spent too much on "education")

    I appreciate any advice on how to do this well.

  • Will BarnardPro Member
    Moderator
    OP
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    9y
    Originally posted by @Mark Mathews:

    When I started getting serious about REI, I was planning to do flips here in SoCal. It turns out that with the thin margins, high cost and my lack of experience, I decided that this market has too much risk for me.

    That's why I decided to try wholesaling in a different part of the country. I want to provide a good service for my investors and sellers, gain a good reputation and finally become profitable. (I spent too much on "education")

    I appreciate any advice on how to do this well.

     Aside from your comment about lacking experience and the tighter margins here in So Cal, I disagree with your risk assessment and desire to go out of state to wholesale. Many people are successfully wholesaling here and while the market is competitive, deals can still be had. The only risk a wholesaler is exposed to is if they back out of a contract and hurt their reputation, I'm not seeing any other risks associated with this strategy.

    Secondly, and to answer your question, you do this strategy well going out of state the same way you would do it locally. You learn the market up and down, you learn how to properly evaluate rehab costs and ARV, and you build systems to locate motivated home sellers. It is easier to do all of that locally from a logistics standpoint, doing it out of state would require you to travel there and spend quite some time there learning the market and building your trusted team.

  • San Diego, CA · Member since 2015 · 77 posts · 22 votes
    9y

    Thanks @Will Barnard for your reply. Perhaps I wasn't quite clear. I meant that doing flips here in SoCal is too much risk for me. I won't even consider trying to do flips out of state. 

    My chosen method for finding properties did not turn up much response here, while in Texas I have gotten better results so far. Probably I need to improve my method for finding deals.

    It would be great if I could spend a lot of time doing this. Unfortunately, I haven't yet earned enough to quit my job to go full time. Still working on that. There's a lot I can learn from different contacts through email and other information sources, including right here on BP.

    Thanks again.

  • Property Manager · Romeoville, IL · Member since 2016 · 10 posts · 5 votes
    9y

    Great Article. I am a little confused as to why you didn't walk the property yourself before you made the purchase with such tight numbers.

  • Business Owner · Wisconsin Dells, WI · Member since 2017 · 38 posts · 26 votes
    9y
    Wholesaling is great...if it's your first deal...
  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    9y

    And this thread just keeps on going......LOL!

  • Miami, FL · Member since 2015 · 30 posts · 2 votes
    9y

    Yep.. not everyone does the due diligence well done..

  • Will BarnardPro Member
    Moderator
    OP
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    9y
    Originally posted by @Bobby Leach:

    Great Article. I am a little confused as to why you didn't walk the property yourself before you made the purchase with such tight numbers.

     Who are you directing your question to?I started the article but did not purchase anything with tight numbers sight unseen so I am unsure what you are referencing here.

  • Investor · Wilmington, NC · Member since 2016 · 32 posts · 12 votes
    9y

    I saw that there was 666 replies, so I needed to reply to get it off that number! 

    Love the original post Will. As someone new to RE investing, I am looking to start off wholesaling in a desirable east coast city that is starting to see some real appreciation in property value. 

    I greatly appreciate this BP community and truly excited to pick through these forums day by day. 

  • Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes
    9y
    I had a similar experience recently. Received an email from a wholesaler on a property claiming only 5k in repairs needed. Just looking at the pics provided it was obvious the property needed a new roof, some windows, exterior trim, garage door, full kitchen and flooring. Kind of tough to do all that for 5,000!
  • Investor · Middle River, MD · Member since 2017 · 191 posts · 127 votes
    9y

    Why not add to this eternal thread. :)

    I bought my first two rehabs (flips) from wholesalers back in the day (2003). The first guy was legit. The second guy was trying to screw me over with overly low rehab estimates. I knew his estimates were low, but I liked the house anyway. Luckily it was 2003 and by the time I got it back on the market in 2005 the market had gone up enough that I made $50,000 anyway. In fact, I made $50,000 on each of them. The first took 6 months part-time and the second was more like 12 months of work, but we got distracted with contract work, so it took longer.

    I haven't bought any others from wholesalers since. The last one I was directly involved in came off the MLS. The profit was $22,000 on that one.

    My advice is to never take the word of any wholesaler. Do your own due diligence. I just looked at one where they tried to say the comps were $200k and the rehab work was $35k. They were correct on the rehab estimate (if I did it myself) but the ARV comps for this exact house in this exact street were more like $120k. You have to be precise with comps because one or two streets over can make a huge difference sometimes.

    Always look in person. Always knows the comps. Always do your own repair estimate. And always have $10,000 cushion somewhere in your numbers for unknowns.

  • Olathe, KS · Member since 2015 · 5 posts · 1 vote
    9y

    i only work with buyers i know or who come highly recommended. I will only do deals that work for them and my sellers. I know alot of wholesalers play games, but to me i want to be respected and maintain good relationships. Ive learned alot from many good people in this business

  • Investor · South Jordan, UT · Member since 2017 · 16 posts · 8 votes
    9y

    To be a true wholesaler you need these 3 main ingredients:
    1. The ability to contract RE at great discounts.
    2. The ability to build a real buyer's list (larger, the better)
    3. Ability to evaluate your market and ability to peg rehab numbers. Both of these require a vast knowledge of the local market conditions and the know-how to quote repair items.
    Without ALL 3 of these items, you CAN NOT be a true wholesaler.

    To add a 4th item, you should be honest, provide accurate numbers, and provide as much due diligence to your potential buyers as possible. This will allow you to keep yo buyers coming back for more deals.

    Do you think all realtors will be honest with you about a property you are interested in buying? Sorry but it is hit or miss. Same with wholesalers. As a buyer you must do your own due diligence. In time you may find an agent or wholesaler that the numbers are close to yours, but you must not blame others for a bad investment. In the end it is you who is putting up the dough. So have at least 3 contractors walk the property and give you an quote that matched the rehabbed comp materials. If the sold used granite and hardwood then you must do that too. Not just paint and carpet and expect to get top dollar. Can't just put lipstick on a pig.  You must also look at sold comps in the last 90 days or properties that were rehabbed for full value. Finding comps that meet this criteria is not always possible so you will have to use judgement as comps are the only way to determine property value. You are trying to determine the selling price for a flip, and what a person will pay for that property after you rehab it is not possible to predict, so you must use your best judgement. Being located near a highway may be a deterrent for some, but being 5 minutes walking to the grocery, school or close to work may be a benefit to a buyer who plans on living there.  

  • Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    8y

    @Will Barnard Let me start by noting that I have major respect for the business you have built. I did some reading on your profile before commenting on this thread just so I knew who I was talking to. I'm talking to a pro.

    The following is going to sound like an excuse or a cop out but it is neither. It is an honest observation that warrants consideration before we dish it out on "wholesalers" ability to estimate construction costs.

    1. The cost of rehab will vary on whether or not the end buyer is a diy-er or has a crew and how much he mixes the two.

    2. The cost of rehab will vary on the contractors he uses. While there are accepted industry averages (decided by who knows who) they are not the rule. Each company will have their own prices.

    3. The cost of rehab will vary on the quality of materials. Is he going to do high end or low? Where will he get them? Will he over do some aspects and cut corners on other?

    Those are only 3 and there are more. I don't think you don't know this but I needed to make the case here. Obviously the guy in your original post was lazy and not even trying. I have construction experience which helps me get in the ball park of some kind but even then it's not always gonna be accurate.

  • Specialist · San Antonio, TX · Member since 2012 · 462 posts · 294 votes
    8y

    Joshua,

    Although this was directed, @Will Barnard... I thought I would throw my two cents into the discussion. Any wholesaler who is going to provide an estimate must do so conservatively. They do not have the luxury to assume the buyer is going to DIH (him/herself)... You have to estimate it as if the buyer was using a third party. 

    Anything else is a flaw.

    Next, in regards to the type of material used... This goes to the area of the house and what the price point is from the median pricing. 

    Example: In San Antonio, if a house's ARV $125K, then it is most likely the buyer is not going to place granite countertops or real hardwood floors. Now does it mean s/he wouldn't? Of course not, but that would not be par with the area or buyer you are marketing to... Vs. a higher end location such as Alamo Heights (up to six to seven figure homes). Unless the buyer buys the home at a steal, then s/he may never recoup that money in a home with higher-end materials in a lower budget home.

    I don't want to dispute any or all validity in your post, but this is where experience plays a large part in where the rubber meets the road.

    Again, just my two pesos.

    "Big" Henry

  • Will BarnardPro Member
    Moderator
    OP
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    8y

    @Joshua Howaniec You make some valid points and I don’t disagree. That said, Henry responded with basically what I would have. 

    Certainly someone like myself can do a rehab for less than a newbie as my contacts, experience, etc enable me to get it done for less and I have greater buying power for material discounts. That said, a wholesaler needs to be able to calculate what the average Joe can expect to pay for the rehab and simply get it close, I would not expect them to nail it on the dine. They should also assume a rehab budget based on hiring contractors. Regarding the do it yourself guys, I have found that even if they are successful n saving money on labor, they often lose that savings in time and time is a cost.

    Quality of materials has more to do with the market and the individual house. It would be foolish for any rehabber to pick materials so far beyond what is called for in that area (or vice versa).

    That all said, you comments should b recognized by all looking to wholesale and realize that they need to ay attention to the rehab numbers while factoring in your comments.

  • Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes
    8y

    @Will Barnard

    If I have a deal under contract able to sell to a cash buyer for 70% ARV then what ARV% profit should I make sure my buyer has after he pays for repairs? I want to set this deal up right.

  • Real Estate Investor · Phoenix, AZ · Member since 2014 · 44 posts · 18 votes
    8y

    This should be its own forever caregory. Great comments and observations.

    The wholesale gurus are adamant and nearly rabid in their approach to sell you on their program. And it's touted as the best way to get started. Actually another way with less risk is as a deal finder with an acquistion team.

    After having some wholesale "deals" evaporate or chasing just a the first couple that couldn't even meet me at the properties, or didn't know the power of an ooptionc or contract in general I was losing ground quickly. 

    Daisy chain, wholesale, ARV as medium rehab, ARV as extreme rehab, ARV as a rental buy and hold, real GOOD comparable sold properties.

    That still is a dance and education that is done today.

    Some areas and times and properties need to be at 60-70% ARV minus repairs. Some at 75 or 80% and depends on ARV price and Investor.

    Birddogging for one Big Wholesale Co here in Phoenix area, I came across a property that actually had, something like"will take care of after PROBATE is over" written on the door. And a phone number.

     My friend and one of the acquisition team members and the executor all met together.

    There were two groups of investors including us. The number the investor offered was 120k. He estimated 40k in repairs. Anyway, they had me keep in contact, and about once a week I'd call the executor to see how he was and he'd give me updates as to what his nieces and nephews (out of town) were considering and how best to dispose of his sister's estate.

    This went on for 2 or 3 months. If it all came together my friend and I who knocked on doors and called people and left flyers (or fliers) would get $2500 to split. We were both living in a warehouse at the time and this sounded great.

    But, the investment company was trying to retool so a different less aggressive less go getter type was filling in.

     So, when the executor finally said he was close to making the decision and that he had an offer at 150k and allowed all interested investors to make their offer. 

     "We" would not offer more than 120k and the vibe was off. I just was sure there was a deal here. I think this is one of those times where I should have gone it alone- tied up my own option or purchase contract and wholesaled it...but I didn't have the guts.

    And no real good close mentor was around to guide me through. It sold for 152k and in weeks later sold at 190k!!!!! I looked it up again recently and saw it sold last year (one year later) at $360k!

    When the investor group wouldn't pull the trigger or find a way to compensate for all the flier sticking, knocking and getting their phones to ring...my friend...bolted...never to work with them again. Ugh.

    I'd see another one or 2 that I did not go full tilt into like an option that was shortened and expired. 

     I'd later see that though the wholesalers controlling it couldn't get it done that it sold within 2 or 3 months for 40k over my option.

    Last year I had a Joint Venture with a local mentorship school and got mt first successful wholesale deal done! The ARV depended on adding a bedroom and the wholesale fee was 8k! Awesome....ish!

    I got 20% of that...$1600.

    My next deal was what I call a micro wholesale deal. I Joint Ventured with a Realtor who put up the Earnest Money.

    A townhouse-There was one or maybe 2 complete renos in this complex of townhouses...and so the high comp put its ARV at 145k

    But...not many investors liked this comp although it was beautiful. The townhouse needed some work, to rent or live in...It was occupied and the dogs that had resided there left their marks. Walking in when it was warm and wheww the scent was strong.

    We finally had to just assign it to a couple getting financed and it was a skinny deal, but my friend who owned the place was so glad we could get it done.

    I'm not a real estate agent but in the beginning of 2007 I got licensed... It was a real struggle jut to keep my license or renew it...never had enough money set aside for emergencies ugh...

    I think it was 2011 when I finally let it go.

    I'm still trying to crack this real estate nut wide open.

    I work with about one to 3 other acquisition teams. I see many wholesalers sending in 'deals' and when trying to comp sometimes its close and other times the number of floors was different. Ugh Lol...

    And the tendency is high ARV low rehab estimates. And bad comparables.

    I don't have access to MLS and am considering a subscription to NetValue or maybe paid to redfin... Or something as many agents won't comp for you, and Zillow solds, and Trulia info, and realestateabc can sometimes give you a very inaccurate picture of the market.

    Anyway, sometimes a micro deal of less than 2 or 3k to split with your JV partner is the thing...and if it helps that seller because you were able to solve their problem after agents, and other investors could not make the numbers work and seller not having money to put into the deal...

    Well, a micro wholesale or low assignment deal may be helpful.

    Now the house I have undercontract in escrow in Virginia.... Well, they just found 2 more liens and a foundation problem and the $1000 dollars I borrowed from friends for a % of profit... Is at risk...

    Auction Flipper program that is out there is missing some pieces....jus' saying...

    (Mash of guru voices in my head... "...But you can make 30,000 in 3 weeks and with fast action bonuses we'll send you a compass and your own embossed business cards made entirely of tin foil!

    Just as Leonard Stinkbottom-

    Yeeeep, I was livin' in a cardboard box and wore the same pair of pants for an entire year...and now my Networth is 50 million dollars!

    If I can do it, you can too!"

    ("Disclaimer, you may lose a lot of money learning to make a lot of money but we'll make a lot of money and tell you...you can too!")

    Anyway, thanks for this slot.

    The truth about wholesaling is it takes work and should not be the only method you ever use...that is for sure!

    Thanks Bigger Pockets...for this forum and your podcasts and books and recommendations.

  • Fresno, CA · Member since 2017 · 5 posts · 4 votes
    8y
    Originally posted by @Will Barnard:

    @Bryan - Good advice to ignore all but the proven ones.

    The property I posted about above was offered by a company called Arrow Capital Group here in CA. If anybody else has had similar experiences with them, please offer your words of wisdom here.

    I have to speak up here and politely object to ignoring all but the proven ones. As a newbie, who is looking to get into real estate investing but with out the cash to get some serious deals going, wholesaling seems like a good entry level experience builder. First, being ignored is not going to give you a way to prove yourself. I am not getting into wholesaling with some delusion of grandeur that I am going to make $20k on every deal. But rather if I can pull $3k-$8k and build my reputation, my bank roll, and my sources for acquiring BRRR property then I am on the right track. Shouldn't the deal be looked at and used to make a judgement? If I am new, but have a good deal, say a contract that nets me $8k and with ballpark numbers to show you getting it for 65% ARV then you would turn me away because I wasn't referred by someone else?

    A one sheet could outline the deal, and from that your experience should tell you if the deal is worth looking at further?

  • Investor · Phoenix, AZ · Member since 2017 · 583 posts · 919 votes
    8y
    Originally posted by @Jeffery Rymer:
    Originally posted by @Will Barnard:

    @Bryan - Good advice to ignore all but the proven ones.

    The property I posted about above was offered by a company called Arrow Capital Group here in CA. If anybody else has had similar experiences with them, please offer your words of wisdom here.

    I have to speak up here and politely object to ignoring all but the proven ones. As a newbie, who is looking to get into real estate investing but with out the cash to get some serious deals going, wholesaling seems like a good entry level experience builder. First, being ignored is not going to give you a way to prove yourself. I am not getting into wholesaling with some delusion of grandeur that I am going to make $20k on every deal. But rather if I can pull $3k-$8k and build my reputation, my bank roll, and my sources for acquiring BRRR property then I am on the right track. Shouldn't the deal be looked at and used to make a judgement? If I am new, but have a good deal, say a contract that nets me $8k and with ballpark numbers to show you getting it for 65% ARV then you would turn me away because I wasn't referred by someone else?

    A one sheet could outline the deal, and from that your experience should tell you if the deal is worth looking at further?

    The reason people don't want to deal with unproven ones is they likely don't have correct numbers. 95% of the wholesale deals I look at have either an incorrect ARV or incorrect rehab, enough to make the deal not worth my time. And these are from wholesalers who do deals.

    In a perfect world, you're right, one sheet should be enough to tell me if I want the deal or now. However, if that sheet wasn't prepared correctly, what good is it? We only have so much time in a day, and can't look at every single sheet that every single newbie wholesaler prepares. So, an experienced flipper is going to choose to look at experienced wholesaler's deals first. Then, that leaves the newbie wholesaler with a newbie flipper. Talk about a disaster waiting to happen. If neither one is experienced enough to get the numbers right, that flipper is likely going to lose money on the flip. In fact, I think a lot of the wholesalers I see on BP in my area prey on flippers who don't know their numbers, which really irks me. I try to call them out on their "deals" in the marketplace as much as I can. 

    My advice for every new wholesaler is to do 2-3 flips with your first deals. If you don't have much money, try to find a seller willing to do financing the property 100%, with interest payable when you sell your flip. Then, find a HML willing to pay for 75%+ for the rehab. This shouldn't be hard to do if you give them first position on the loan. Out of pocket, you'll be paying 25% of the rehab, at most. That's not a lot to ask for. After you do this 2-3 times, you'll have the experience to run the numbers correctly for the rehab budget and ARV. Show this to an experienced flipper and they'll take the time to go through the deals you bring them. That's if you still want to wholesale. Who knows, maybe you'll decide you want to keep flipping.

    I understand the catch 22 here. You want to wholesale because you don't see another way to get started. But, you need to have flipping experience to be able to be a good wholesaler. Where there's a will, there's a way. Figure out a way to come up with $5-10K, and do your first flip using the method I just mentioned. If you have a job, family, friends, you can come up with $5-$10K. 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.