Wholesaler offer question

8 Replies

How much negotiation room is there when you're dealing with a wholesaler? Since dealing with a wholesaler doesnt really give you a due diligence period, and since you are already getting a significant discount in most cases how much wiggle room is there???

Wow,  I do hate buyers who are liars.   If it's 'and or assigns' on the contract you could have the initial seller, who is getting the shaft, can and may retaliate.   It depends on the property, but if a flipper wants more than 5k for the finders fee move on.  Every house I see gets an offer at 90% of asking, but at some point, you will find Realtors are your best friend.  Licensed for a reason.

I think some wholesalers try to take too big of a bite out of the deal. I've never purchased from a wholesaler although I do get some properties presented. There just isn't enough meat left on the bone for me to bite. We've purchased all of our properties off the MLS.

Originally posted by @Andrew Moullin :

@John Teachout would you buy from a wholesaler if they weren’t being so greedy?

Andrew

Yes, I'd buy from a wholesaler. I don't know how greedy they are, maybe they're just not good at negotiating with the seller. All I know is that the ask prices I see make the properties uninteresting. Also, we  buy in a fairly small area (about a 50 mile diameter circle) and there aren't that many wholesalers that work that area (that I'm aware of)

 

Originally posted by @Elioe Burgos Jr :

How much negotiation room is there when you're dealing with a wholesaler? Since dealing with a wholesaler doesnt really give you a due diligence period, and since you are already getting a significant discount in most cases how much wiggle room is there???

It depends on the deal. I don't focus on what the wholesaler is making as that's like focusing on what the original owner paid for the property. The only thing that matters is how much you are willing to pay. You need to run the numbers and make offers where you need to be and where the deal works for you. 

@Elioe Burgos Jr

I buy from wholesalers all the time. You just have to run the numbers thoroughly. To me it doesn't really matter if they make 5k or 100k if the numbers work in my favor I make an offer accordingly.

@Elioe Burgos Jr Good Morning! This is a great question! Wholesalers generally have great off market properties that you can make money on. They can only profit what they negotiate. You have the power as the buyer to say how much you will pay. After you've done your due diligence on the numbers and give them a price you can pay for the property, there is only so much they can make from there unless they ridiculously cheat the owner. As long as your numbers work and you'll make your potential profit, do you really care how much they make? If so, you may want to market to motivated sellers and directly negotiate your own deals for full profit. Hope this helps! :) Happy Friday! 

Thank all of you!  The answer my gut was telling me was given.  No matter what stick to the numbers.  I was hoping that was the deal.  This gives me the confidence I needed to make  wholesaler offers.  Thanks again!

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