What questions do I ask when purchasing from a wholesaler?
I have a call with a potential wholesaler tomorrow and I want to know what questions I should ask to vet him and other wholesalers to make sure they are high-quality wholesalers.
My husband and I are looking to buy our first house hack in Salt Lake to reduce our living expenses and get into the real estate game. This will be our second home purchase but we'd like to start getting more creative with our purchases because of the high prices in our area.
We are looking into purchasing with a wholesaler to get a deal and an opportunity for forced appreciation through rehabbing a property. We rehabbed our first property and have connections so we aren't afraid of a fixer-upper.
We understand that buying through a wholesaler can be risky because there are no official requirements, regulations, or hand-holding.
Please! Tell me what I should consider when taking this route. Thanks so much!
Most Popular Reply
First of all, go with your gut. If they sound not professional, then obviously that's a red flag. I'm in my 40's, I both wholesale and buy, and I also JV with other wholesalers. Usually, you can tell pretty quickly the ones who are not ethical. Young guys with bathroom selfies on the FB profile etc seem to be the worst. Ask if they have "clear title", meaning has the title commitment/report come back from the title company with no issues for seller to fix/resolve. Ask if the person you are dealing with is actually the one who is listed on the contract as the buyer, or an LLC of their's. I wouldn't even bother asking for comps or how much they think the repairs are, it doesn't matter what a wholesaler comes up with, a real buyer will know how to assess on their own how much the repairs will be and thus how much they can pay for the house depending on their business plan (either to fix up and rent out, or fix up and flip/sell).