Wholesaling Homes: Opinion
NC · Member since 2019 · 8 posts · 3 votes
So I saw someone asking a question about wholesaling and another person shot them down and said if they’re not a broker they’re basically the lowest of lows in real estate investing. It was also said that if a wholesaler brought a deal to that “buyer” they’d cut out the middle man (wholesaler) and go straight to seller with all the information and just buy it straight from the source.
My question is, why? Why was/is it that big of a deal? This was something I was interested in and I’ve always been interested in wholesaling but that kind of changed my look on it and was sort of discouraging to read as a new investor.
There are definitely people out there who don't like wholesalers. Honestly, that's on them. Wholesalers provide a very legitimate service. Buyers often don't have the bandwidth to do proper marketing. So we do it for them. If you meet someone who doesn't like wholesalers, you have two options. Convince them you're legitimate and valuable (and then live up to it), or move on. I was at a REIA meeting a few weeks ago. The rehabbers there were begging the wholesalers to bring them deals. If it worked for the rehabber, they didn't care what the wholesaler was making.
That said, some "wholesalers" out there are not professionals. They bring bad deals to the buyers, they try to screw over the seller, and they don't know what they're doing. Remember, we're also doing the seller a service, but if we are trying to screw them over, we're doing them a disservice, and then we earn the "lowest of the low" badge. I get the feeling there are too many bad wholesalers out there. You need to rise above and prove your worth to both sides.
As for going around you, if you're doing it right, they can't. You already have the property under contract.
There are definitely people out there who don't like wholesalers. Honestly, that's on them. Wholesalers provide a very legitimate service. Buyers often don't have the bandwidth to do proper marketing. So we do it for them. If you meet someone who doesn't like wholesalers, you have two options. Convince them you're legitimate and valuable (and then live up to it), or move on. I was at a REIA meeting a few weeks ago. The rehabbers there were begging the wholesalers to bring them deals. If it worked for the rehabber, they didn't care what the wholesaler was making.
That said, some "wholesalers" out there are not professionals. They bring bad deals to the buyers, they try to screw over the seller, and they don't know what they're doing. Remember, we're also doing the seller a service, but if we are trying to screw them over, we're doing them a disservice, and then we earn the "lowest of the low" badge. I get the feeling there are too many bad wholesalers out there. You need to rise above and prove your worth to both sides.
As for going around you, if you're doing it right, they can't. You already have the property under contract.
You've also probably heard that wholesaling is basically like being an agent without the license. In some states it's illegal and they do crack down on it. From what I understand, most states do not enforce it. Or they view it as being legal. Some feel that it's not a big enough problem to address, yet.
At any rate, there are many wholesalers in your area that are doing a great job. There are some that give wholesalers a bad name by misleading the seller or walking away from a deal.
Regarding a buyer going around you. In my opinion, that happens so rarely that you shouldn't concern yourself with it...………..Good luck.
If that person went on this forum or any other and openly admitted to ripping off someone else, that speaks volumes about that person, not you. This is a moral decision they need to come to understand, so I would not take advice from such a person.
It is true that there is a lot of negativity surrounding wholesaling, but that's only because just like every other "profession" in real estate, there are horrible people involved. Those that do this business the right way, enjoy a very lucrative business. Those that do it wrong, have limited to zero success and cause the entire concept to have a bad name, as if no other concept suffers from this.
Research your state and learn exactly what you need, to successfully start and complete a wholesale transaction. I don't know about NC, but in Texas, we have a very effective way of protecting our interest in any property. I imagine there would be similar ways to do this, in all states, but you would need to discuss with an attorney.
If I had to guess, most of the people that speak out against wholesaling, simply don't understand the process and just how much work goes into it. It is so much easier to visit any one of the websites that have houses for sale, and hope that there are enough deals there to mean anything. The investors that put in enough time, quickly learn to love working with wholesalers, because we deliver what the MLS just can't deliver.
If you work hard to deliver quality deals, you will never have to worry about finding investors with a strong moral compass, they will find you.