Here's why I'm not a huge fan of wholesaler deals - here's the real truth!!!

[Jimmy Lieu]

I'm a local investor and agent here in Columbus Ohio and recently did 2.7mil in real estate sales in a month so I have a bit of experience when it comes to finding and closing great investment deals for my clients - especially with BRRRRs and flips. I wanted to write this post because I get asked the question quite frequently about what I think about off-market/wholesaler deals. 

There always seems to be a lot of people think wholesalers have these "incredible" deals because they are off-market and I can definitely tell you that there's a lot more risk involved as well. Never take into consideration the renovation or ARV numbers from a wholesaler. A lot of them fudge their numbers and use bad comps to boost their numbers to make it look like how they want it - so be super cautious and do your own research.

With that being said, the reason why I tell a lot of my newer clients I'm not a "big fan" of off-market deals is because a lot of these deals consist of all cash/hard money, which means there is no traditional or bank financing allowed. The next biggest thing is there are no contingencies involved. A lot of these wholesaler deals allow for walkthrough only but there is no inspection contingency or home inspection allowed. It's as simple as doing one walkthrough and that's the only due diligence period. 

Because of this, I typically send off-market deals to my more experienced investor clients and on the other hand, I tell my newer clients that they should close a few deals and get more experience under their belt before jumping into off-market/wholesaler deals. As a local investor and agent here in Columbus, let me know if you have any questions, would be happy to help!

[Brandon Goldsmith]

For my Columbus clients, the financing with traditional lending has never gone through on a deal under assignment. Most new investors start out with traditional financing with no more than some cosmetic updates, which is what I recommend. I definitely agree that you should not use rehab budgets or ARVs from wholesalers when buying @Jimmy Lieu