Wholesalers w/ online presence - only scraps left?

Question

The prevailing sentiment around here is that listings on sites like Loopnet are basically ones that have been summarily rejected by first line buyers with a solid broker relationship. Same thing for MLS listings. Almost all of the best listings and off-market deals are typically offered to close business associates before they hit Zillow, etc. That's the nature of the biz and the reason why networking is so important. I'm noticing that there are many wholesalers who have scaled up to such a degree that they have robust websites with all of their available inventory for perusal and sale to newer unestablished investors (among others, of course). Is it safe to assume that these wholesale listings are no different from Loopnet and MLS in terms of their "meat on the bone" quality? I have to imagine that the ones that made it on the websites for general public consumption were passed over by more trusted and experienced investors first, thereby making them much riskier for a novice buyer. How far off base am I? I mean absolutely no disrespect towards these wholesalers at all. Just trying to get a handle on how these things work.

Dave Passey · Answer

Hey @Simon Hernandez,

I think this is a very fair and interesting question. The company that I work for is not huge, but we are pretty good size in the Dallas, TX area and we typically have a decent inventory of houses for sale. Our process is to send out an email to all of the investors on our buyers list when we have a property. After that, we call investors that we have a closer relationship that we know do work in that area. Typically we know this because we have sold them a property before. We have, however, recently started to list our properties on our website at the same time as we send out the email marketer. Not everyone has access to all of the information though because the world is full of shady people and we regularly used to have shady investors go to the seller's house and try to cut us out of the deal. We blacklist people that do that and notify all other wholesalers in the area about that person too. It makes it very difficult for them to get deals after that, but I digress.

But basically for us, our inventory is available to everyone all at the same time. Obviously we are trying to make money and so we do try to get as much as possible for the property. There is something to be said about our investors that have already purchased properties from us though. We know that they are able to close on the property so if you make an offer and it is the same or even relatively close to an offer we received from someone we have sold to before, we are going to be more inclined to go with the repeated buyer because they have established a good working relationship with us.

I can't speak for all wholesalers, but that is a rough look at how it works for us.

Simon Hernandez · Answer

Thanks for the insightful reply, Dave. I hesitated in even starting this post seeing as how I might very well be doing business with some of you ladies and gentlemen and it could very easily be taken the wrong way. I definitely agree with the whole integrity thing between wholesalers and investors. It's a fool me once kinda thing - no need to expose yourself to unneeded risks with less than reliable buyers. Is there a certain approach would you recommend for an "unknown entity" when trying to put an offer together that would make you more confident in their ability to close?

Wholesalers w/ online presence - only scraps left?

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