Wholesaling Scam or Savvy Business?

Question

Today I read a great article written by BP Member @Rich Urban on his site.

http://southfloridainvestors.com/why-is-every-real-estate-wholesaler-pushing-eachothers-stuff/

The article discussed Wholesalers taking other Wholesalers' deals and marketing them at a higher price.  Rich said he noticed it when he got 6 emails selling the same property for 6 different prices!  He was on multiple buyers email lists.

Rich's conclusion posed the idea that there is only a handful of "REAL" Wholesalers in South Florida!

What are your thoughts?  Is this an unethical scam or an innovative strategy?

Wayne Brooks · Answer

Hey Zach, we may be neighbors!  There's nothing innovative about this, maybe more a sign of laziness, or inability to find their own deals.  I get this a lot too, and of course guys sending me "wholesale deals" off the MLS, and marked up.

David J. · Answer

I don't care how many people make money off a house or how much they make before I buy it. If the numbers work for me I will buy it from whoever brings it to me.  If the numbers do not work for me I delete the email. Analyze the property based on your criteria and pull the trigger on the winners and flush the losers.  There are some wholesalers that get sent directly to trash now because they repeatedly sent me deals that sucked.  Every couple weeks I sift through the trash to confirm and the result is the same each time.

Zach Bechard · Answer

Thanks Tj Hines, This is all new to me, and I was shocked when I discovered this.  I am glad I found it early, rather than getting caught in the middle of a deal like this without knowing.

Tj Hines · Answer

You are going to find quickly the longer you stay in this business the circle becomes smaller. You will also quickly find out who all the serious players are and the guys who just have in their hand in the pot in between.

It's not unethical neither is it a scam. Wholesalers help other wholesalers out and quite frankly if your not in that circle then yeah you may pay a price higher than per say if you are dealing directly with the seller.

Once your added to everyone's list then this is a scenario that could most definitely happen, but this is nothing new by a long shot.

You have wholesalers who deal directly with sellers to sell the property and then you have wholesalers that deal directly with other wholesalers. Your job is to always figure out if possible who is in control of the deal.

Hope this helps!

Wholesaling Scam or Savvy Business?

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