Why does "Wholesaling" have a negative connotation?

New to Real Estate · Houston, TX · Member since 2020 · 32 posts · 15 votes

Hi Everyone! I'm newer to BP, the forum that is, but I've been a huge fan of the podcast over the last year and a half. I've learned a lot and I'm grateful for the platform! I'm interested to hear from different people if they think "Wholesaling" has a negative association and why? Any thoughts, feedback or questions are welcome!

Thanks in advance, Friends!

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Nick C.

Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes

Lying to sellers, lying to buyers, lying about ARVs, lying about rehab costs, annoying marketing tactics. And all this stuff could be ignored and wouldn't be such a big deal except there's sooo many of them. So one here and there isn't a big deal, but being inundated with texts, cold calls, and unsolicited emails from them and their VA's making the phone unanswerable is a bummer.

And I know the common response will be that there's some good ones out there, but they are few and far between.

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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
4y
Wholesaling is sort of a grey area legally. They are basically selling real estate without a license. I don't have a problem with it if the seller is fully aware of what is going on, but some of them don't. I've bought one property from a wholesaler and I know the sellers were well aware of what is going on, in fact they were there for the close. That particular property had an unpermitted house on it in addition to the main house. Now this was Mississippi, where such things are largely ignored but lenders care. In other words, it had to be a cash deal and those are the sorts of properties wholesalers should deal with, IMO. What I object to are wholesalers who snatch up properties on MLS without ever planning to buy them and then attempt to sell them to someone else at a profit. When I spotted one wholesaler was doing this with a property I had intended to bid on I asked my real estate agent to let the seller's agent know and made a backup offer with a close in 14 days. As expected the wholesaler didn't have a buyer in time and since now the selling agent knew what was going on he refused to extend the close and I ended up with the property.
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
4y
Asking why wholesaling has a negative connotation is like asking why we don't all buy our sports tickets from scalpers.
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