The Drawbacks of Wholesaling

[Steve P.]

The thought of wholesaling is enticing to me as a newbie. This I feel would be my strategy to get started in REI but I haven't closed a deal yet as I am still educating myself on the basics and are somewhat still confused as where exactly I should start my journey. I've gathered many pro's and con's of wholesaling in general but I'd like to hear from experienced whole sellers what the biggest obstacles or drawbacks of wholesaling are for them. What issues do you face in the field? And how have you solved those issues? From what I understand, and correct me if I am wrong, the biggest issues with Wholesaling are the costs of marketing and time is takes to find good deals, seller's getting cold feet once they see you're making a profit and acquiring a list of reliable buyers list. I'd love to get some feedback on this :)

[Steven J.]

There is plenty to read on this site and I suggest you keep reading up on it. You'll find that I follow many of these wholesaling posts and long ago I was totally on board. I've since changed camps and I don't suggest wholesaling for newbies at all. There is so much to learn about the industry and its a big time commitment. You've got to find lists, market to those lists of homes, receive calls (hopefully), return those calls, meet sellers, estimate rehabs, figure out comps, run numbers, make offers, make written offers, negotiate with sellers, market a home for sale, have lists of buyers, have assignment contracts, do showings, negotiate with buyers, close and make a profit. (Can you tell I'm trying to scare you yet?) You need to do all this while continuing your marketing campaigns as well. Wholesaling is very much a job because it takes a lot of time to commit to it. 

The gurus do a great job of getting you motivated to do it and spend a lot of money in order to but you've got to make sure you're dedicated. Motivation is a short time frame where as dedication is long term. If you're dedicated and have the time I think wholesaling can work for the right person but it is not as easy as talk to your neighbor, get it under contract, sell for profit, etc.