All Forum Posts by: Account Closed

 Yes. It was profitable and doing well until around 2010. Credit crunch hit it hard, which wasn't felt immediately but resulted in decreased gross sales by 2010, which prompted me to stop it. 

As an investor I was looking for wholesale properties before COVID. At the time I also received lists of what was made available by wholesalers and something didn't add up. HML wouldn't finance because property was overpriced , or prop was in an area where they could not be retailed for ARV after repair (cold markets). Wholesalers should work with REA and HML, run numbers/comps with REA and ask HML if they will finance the deal before making an offer. It won't sell if it's not a good/profitable investment for a flipper/buyer. Cost of repairs also almost doubled after COVID. What could work in 2019 won't work today.

 LOL I ran wholesale business in past. Don't think I will be surprised with anything I find out when dealing with people in this line of the business. Any vice, any backhanded thing you can think of, any trap, any costly mistake, I have seen it in product liquidation business. I even seen some shady people who were doing criminal stuff that they were not even trying to hide (perhaps working with gov as paid informers?). It could get messy if you didn't focus on strictly doing and minding your own business, with clear goals and exit strategy set. A lot of newbies were entering the playing field, because it had no entry barriers, and burning up cash, getting scammed, screwed all over and broke after few months. But all that is just part of human nature and society we live in. Either deal with it or do your 9-5 job. I don't think there are any other viable businesses to enter and run with cash flow and fewer concerns than RE wholesaling, unless you are in IT and have the next best selling software to sell or have millions of dollars in cash you can  invest in a business where you pay someone else to run it for you. 

In wholesaling working in small (ethnic or whatever) community would significantly limit the potential, to the point of bringing you to a complete halt. It's one thing if you want to find wealthy cash buyers in such communities (perhaps someone from India could work with Indian community of wealthy investors, in the US as well as abroad, and leverage it as a ready source of cash buying clients one could trust and rely on), but how are you going to find steady pipeline of Indian home owners out there, with all other criteria in place to motivate them to sell at 50% of ARV?

Vertical integration sounds more feasible. But I don't think you will need buying and dispo agents until you scale things up to the point where you would need them.  

That's part of NJ where you have lots of interesting characters. God knows what he was doing to net 250k per deal. None of my business, but I don't think he was doing what most wholesalers plan to do. 

 How is so many Erics' competition more insurmountable than that of your every day REA and Brokers? With so little inventory and bid wars , and hundreds of showings of each property to some fake buyer who never intends to buy house, I don't think Erics in this game are in any particular disadvantage compared to "licensed" REAs (licensed is in quotation marks,  since a lot of people seem to put too much significance into obtaining it, as if it was a law degree from Ivy League school). LOL

 That's why 1% rule sounds too good to be true. I guess it's possible to succeed at higher rate than you mention. You could spend some time doing market research and eventually find a niche, an underserved market that was still pretty good with stable/reliable sales, solid comps and investor interest. But 1%? I can't think of it being realistic.  

I don't know if it is legal to do, but if it is then it's a smart way to finance closing costs instead of fronting the cash. If he got hard money I assume he was fixing and flipping the props? Or, did he get hard money to hold the property and pay interest while looking for a cash buyer? 

1% still sounds hard to believe. You can pay $99/mo to get 10000 leads from Propstream. It would potentially yield 50 potential closures if one really worked up all those leads (assuming you could skip trace half of the prop owners on the list  and call/email/mail them). 

 That is fantastic conversion rate. I would expect to have much lower rate of conversion. Is 1% realistic, do people actually close deals when they call or mail after skip tracing just 100 (or even 150-200) potential sellers? Especially with cold calling, I would expect the rate to be much lower. And with mailers, I strongly doubt that 100+ mailers (scaled to 1000+ post cards mailed monthly) will get any leads/call backs, let alone conversions. Can you give real experience based input on this? My concern is that after 10000 calls and mailers sent out there would be 2-3 leads (time wasted on the phone with someone who is neither motivated nor has viable sell to offer) and zero closures. 

 This is where I have got my US Median Income numbers from:
BLS - US Median Weekly Earnings

It's median income of the full time American worker, not of American household which you refer to , and probably got your numbers from here:
FRED - US Real Median Household Income

What else is "factually incorrect", that you disagree with? 

Do you disagree with the fact that average American first time home buyer who finances a purchase through bank is similarly positioned to a wholesaler whose end buyer puts up the cash, in a sense that both enter into a contract to buy house without having the cash to buy it? Be specific. I can write all day long that everything you write is "factually incorrect", and that I simply call you out and disagree with you. 

Where is your data and point by point logical arguments to back up what you say? 

P.S. I feel sorry for so many investors of big hedge funds run by well educated and licensed financial managers, who invest their client's money in a million-dollar per home Ponzi schemes, with another 2008 housing crisis in making.  I wonder why no one badmouths those fraudsters in high places as much as they do some wholesaler who works his butt off to make a living.