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Wholesalers Get a Bad Rap — But They’re Essential to Investors for These 3 Reasons

Brett Snodgrass
3 min read
Wholesalers Get a Bad Rap — But They’re Essential to Investors for These 3 Reasons

What value have brought to you as an investor?

Recently, I started a forum post here on BP asking that same question, and it got a LOT of action! People seemed to either love wholesalers or hate them passionately — there wasn’t much in between!

In the real estate wholesaling industry, we get a pretty bad rap a lot of the time simply because of the small percentage of people who take actively take advantage of others. Those guys really make it a lot harder for the rest of us out there!

As the saying goes, “One rotten apple will spoil the whole batch,” and I’ve found it rings more true for wholesaling than a lot of other industries.

But today, I want to challenge the notion that ALL wholesalers are a waste of time and highlight the top 3 ways a relationship with a good one could be essential to your business.

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Related: The Best (And Most Honest) Way to Wholesale Properties in Any State

3 Ways Real Estate Investors Can Benefit From Wholesalers

1. Wholesalers can save you money.

The biggest benefit I believe you can find in working with a local wholesaler is in the savings you’ll get not having to do your own direct mail. In my business, we are spending close to $10,000 per month in marketing costs, not including a two full-time salaried employees who handle all the incoming calls!

What if you never had to worry about spending money on marketing? What if you had a connection to someone who knew exactly what you were looking for and then brought you the perfect deals for your business, month after month after month?

That is a POWERFUL relationship to have, and if you establish it correctly and get to the top of that wholesaler’s buyers list, a lot of the time they’ll end up giving you a discount on their inventory simply because they know that they can trust you.

I personally have sold properties up to $5,000 off of my list price simply because a buyer had history working with was interested, and I knew that they’d close on time without any hiccups.

So, as you can see, working with a solid wholesaler is a HUGE advantage.

2. Wholesalers can save you time, energy, and frustration.

You want to know something about me? I absolutely hate mowing my lawn! For years now, I’ve simply hired it out because I feel as though my time is far more valuable than the $30 per mow, and I simply would rather do something like play with my kids or spend time with my wife than take time out of my busy schedule to mow the grass.

You know what a lot of full time investors hate? Handling motivated seller calls — and I can understand that! It’s not easy dealing with people cussing at you and giving you death threats on a weekly basis.

And then there is the time that it takes handling all of that!

In my business, as I mentioned above, we get so many calls that I have two full-time employees solely dedicated to the process of screening people and answering the phones!

What if you could avoid all that headache and hassle, and instead simply go to a nice website or your email inbox and scroll through the inventory and select which properties you like?

Wouldn’t that be awesome?

Establishing a relationship with a good wholesaler in your market can really make finding your deals that easy!

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3. Wholesalers can make you money.

Now, I don’t want to be Captain Obvious here, but if you establish a relationship with a wholesaler — who, again, really understands you and your needs — once you guys build rapport, the wholesaler will do all he can to get you the deals you love, over and over again, which means money!

Related: The Top 6 Ways Wholesalers NEED to Change How They Do Business (According to a Wholesaler)

As wholesalers, we love repeat buyers we can count on and typically will really nurse those relationships well.

For example, I sent out Christmas presents to all my top buyers last year. I’ll also send them random gift cards or tickets to events, just to say thank you for their business.

I also, as I mentioned earlier, will normally be pretty comfortable selling to them cheaper than, say, a brand new buyer, simply because I know them.

So you see, though there are some bad apples out there in real estate wholesaling that definitely need to be thrown in the trash, we’re not all bad, and, in fact, we should be an essential part in how you do business.

Investors: Do you do business with wholesalers in your market? Why or why not?

Let me know with a comment!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.