Issues/Concerns With Wholesalers As Cash Buyers ?

Question

Good Morning , Fellow BP'ers. As you know I am an wholesaler with a little bit of experience under his belt. I want to service my current cash buyers and future cash buyers better. I just want to pick your minds for a bit, and would like t to know what are some issues or problems are you having with current wholesalers and what can we do to resolve these issues to better serve you ?

SN: I am currently marketing in the Gwinnett & DeKalb County area if you would like to work with me in the future.

Jerryll Noorden · Answer

Most wholesalers are doing it wrong. They are manipulative, dishonest, exaggerate the ARV, and underestimate the cost of repairs. (sorry for being so bluntfully direct)

Wholesalers need to focus on providing value, first to their sellers, but also the cash buyers. Fix this and wholesalers will be so much more succesful.

Anthony Dadlani · Answer

@Eli Bellevue

@Jerryll Noorden has some valid points.

We think wholesalers should analyze the property has a fix and flip.  If there is room to make money as a flipper and the wholesaler can still make a profit , it’s a valid deal. We have been buying in Atlanta for over 20 years and very few wholesalers actually bring valid deals consistently..

Best of luck in all your endeavors.

Nick C. · Answer

Don't do this:

HOT DEAL! Needs to be gutted, needs new roof, new hvac, new windows, new drywall, fix water damage throughout, rebuild an addition, add a garage, add a 2nd bathroom, new flooring, new kitchen, new appliances, paint, landscaping, redo driveway, redo layout (used to be a triplex but is now sfh), remediate sinkhole, replace asbestos shingles with siding, upgrade electric from fuse box, replace cast iron pipes throughout, put in a pool.

Estimated rehab: $15 - 20k

Or this:

Comp #1: 200k

Comp #2: 205k

Comp #3: 193k

ARV: 330k

Don't do those 2 and you'll be way ahead of 99% of wholesalers today.

Michaela G. · Answer

I refuse to get onto any wholesaler lists and only find my own deals. There's so much b.s. going on in Atlanta.

I remember, before the market crashed, GA REIA had 3000 members and every guru would come to town repeatedly and hock their wares. I'd go to the main meeting and laugh my a$$ off when seeing wholesale flyers of 'deals' in the neighborhoods I specialized in. The thing is that those wholesalers always found a willing buyer. Can think of one particular wholesaler that got together with money people and they offered their 'deals' with financing rolled in. Every newbie was buying from them and they usually never did a 2nd deal. But there were so many newbies in line, just champing at the bit, that they didn't have to worry about it. Unfortunately, those people are still around.

The problem also is, that it's hard for an honest wholesaler to compete. They might offer properties with realistic numbers - 40K profit, when the others offer 80K profit. It's hard for a newbie to tell the difference., but 80k sounds much better.

Jasmine Grier · Answer

What I've learned while building my cash buyers list is to contact your cash buyer to understand their EXACT buying strategy. Also, to truly bring them value by being indubitably honest with them and the seller. You must find the WIN-WIN in all situation and if its not then being up front about it. Cash buyers love to work with us, its all about relationships and results. Building a true and professional relationship with the cash buyer and seller and producing results through your hard work. @Eli Bellevue I truly hope this helps.

Joe Cassandra · Answer

I'm in ATL and on the list (some we signed up some we didn't) of over a dozen wholesalers.

Unfortunately, MOST propose their deals in the mindset of the 'greater fool' theory.

They know there is some newbie out there desperate for a deal that'll pay --- worst overpay --- and so they'll sell their deal.

The biggest problems I see with wholesaler numbers around here:

1.) Especially in a nice area (like East Cobb), they'll take the ARV of a nice traditional brick house and use it as a comp for their split level that happens to be in the same neighborhood. "House went for $500k...this house is a little smaller and thus could gof for $475k" when really, it's probably $375k.

2. ) Their pictures are atrocious. Geez...can't people take pictures in a logical order and put them in a folder in logical order. It's like staging a house...you want more people to come to your open house, make it easy for them to picture what the house looks like! Sometimes it's like putting together a 1,000 piece puzzle.

3.) They can't tell you how they calculated repairs. They pull it out of their @$$. "Oh this looks like $25k rehab." But it needs a new roof and hvac. That alone is $12-$15k...

4.) (realtors do this too and it's sick), they draw a 1 mile circle around their property and cherry pick comps to justify value. Especially in ATL neighborhoods, THiS DOES NOT WORK. Neighborhoods and streets change in an instance. Same in OTP areas. You'll have 80's neighborhoods right next to a 2000's+ updated neighborhood. Those are 'not' comps.

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The market is hot for wholesalers...so they're pushing thinner deals and some investors are biting because they're speculating on appreciation.

For a bit, many have gotten lucky.

I'd recommend:

TO STAND OUT:

1.) Have a website where you're recording updates, walkthrus and such. Builds credibility

2.) Don't send out bad deals just for the sake of sending out deals. Yes, you want to stay top of mind, but it's better to provide valuable info we appreciate rather than junk deals (or worst...daisy-chaining deals from other wholesalers)

Issues/Concerns With Wholesalers As Cash Buyers ?

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