Houston Wholesalers - where are the deals?

Question

I've been on here a while but I never post so here it goes. I've done 6 flips in the houston area and luckily found some good deals but it was time consuming. Lately I've been trying to deal with some wholesalers for my next flip but they seem to be closer to retail than wholesale. I see a mls listing for 87k wth 50 days on market and a wholesaler is bringing me this great deal at 85k. Do they think we are stupid? Great, they called and got a contract for 80k then tacked on 5k and its a "smoking hot deal and and it will go fast". I can do that if I want to pay 75% ARV. The thing is this is not an isolated situation but more of a trend I'm seeing from several "wholesalers". I guess it's back to finding my own but I but I would rather spend more time flipping than finding. I don't mind paying some for the service but do the work an find real deals. Also, if you do find that 50% deal don't get greedy and mark it up to 65% and I'll be back 10 times a year. The deals are out there so it's not the market. What I'm seeing lately is not a service I am willing to pay for because with time be being money the time saved becomes too costly. Are there a any decent wholesalers left in Houston?

Account Closed · Answer

We're seeing the same thing. I'm interested in properties to rehab if you can find them at the right price. I've only been working the MLS. I don't really want to put in all the work a wholesaler would do. If you have anything out there that we can pick up, we can close in days.

Jared Lichtin · Answer

@David Holt @Sam Craven I am moving back to Houston this summer (lived there from 2010-2012) I recently quit my job in oil & gas to focus full time on my real estate investing. What has kind of 'held me up' is this podcast I am producing about my REI. It takes up a lot of my time, and although I love doing it, I can really only focus on this one house I am flipping right now before I move. I am looking to network with other Houston investors, especially ones who have experience and are currently flipping houses. I recently visited, and @Sam Craven, I agree, the housing prices out there especially in the loop have gotten insane the last 3 years, since I graduated law school and left. I would like to understand the funding options & markets a little better, because when I lived there, I rarely went outside of the loop. Adding you both to my network.

David Holt · Answer

I agree Sam and thanks for your post. I'm definetly not saying ALL wholesalers but a few I've dealt with recently certainly fit that description. The lazy and greedy ones are the ones I have an issue with. Some are too lazy to find the deals so they aren't providing me a service when I could find aging mls listings and offer a few grand less and be at 75% ARV before rehab. I had a greedy one that his model is 70% so if he gets one at 50% or 65% he sells a 70% to anyone, not just investors. In the end he is more of an agent than a wholesaler. Same with your 80% deals, even if It is a small profit, its discounted property not a wholesale deal that would attract a flipper. I understand it's what the market bears but I don't see the "investors" paying 80% being around long so maybe maybe the market will level out when people stop paying those prices.

Until then I'll just have to find the deals myself but that is the time consuming part I would gladly pay a wholesaler to do if they could do it without charging market prices.

Sam Craven · Answer

Hey David, full disclosure, I'm a wholesaler and a flipper. We are a volume company, and are well ahead of our 80 house goal for the year.

I understand the frustration, we market direct to sellers, buy from the MLS and other wholesalers. Sellers heads are in the clouds on what they are worth these days, that makes our life more difficult as a wholesaler OR a rehabber. I think the difficulty is a symptom of market conditions. Our cost per acquisition is going up along with the increased competition as well.

No doubt there are some wholesalers out there that either dont know how to value ARV and repairs, but there are also a lot of buyers that are willing to pay 80%...yes 80% of ARV to flip. So if the wholesaler can sell it to someone else that is happy paying 80% or me or you that want it at 70% or better...tough to blame them for going somewhere else.

At the end of the day if you market for your own deals you will have the greatest amount of control of your margins, but that doesn't mean you will always get it or that it will be easier!

Houston Wholesalers - where are the deals?

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