How not to wholesale

[William Walker]

Wanted to post a brief interaction I had with a wholesaler.

I saw a property on craigslist that was listed for 19k.  It's a gutted house and there was only one picture which was on Zillow.  The house was off market.  The add states that the price is the "wholesale price" and that it must be closed by Jan 4th.  I send an email asking about the property and if I can be added to their buyers list.  A few days go by and I don't hear anything back, but then I see a post on craigslist with no pictures titled "Home for sell" listed for 12k.  I click on it and it's the same property!  So I send a text to the number asking if they are a wholesaler and the guy replies "No, I'm the homeowner.  I just had some dumb@@@ whole selling company that has wasted my time for about 3 months and then I found where they had on Craigslist asking like 19,000 when I thought they were buying it".

To add some whip cream to this treat I get a response from the wholesaler the next day saying he would add me to his buyers list.  Sends me an email that has two "deals" typed in comic sans, no links, no pics. 

And finally to put the cherry on top, the wholesaler has an account on BP.  I click on it and the description reads, in all it's glory "I learn for 6 years, no deal yet".

[Jay Hinrichs]

I could go on about wholesalers but here is my favorite and it happened about 6 months ago.

I am hot on Charelston SC having built 24 new constructions the last 3 years.. and about 15 full blown rehabs.  and since I live in Oregon I could not get financing their so we did this all with cash.. ERGO I pop right to the top of all the wanna be wholesalers cash buyer list  :)  now granted everything we are doing is 300 to 600k .. so far stretch from 10k houses.

But this wholesaler brings me a deal for 190k.. its a full gut rehab.. end value about 450k needs 100k so good enough there Is a 75k profit in it maybe a little more. 

I go into contract with said wholesaler.. then do a little leg work only to find out that he has recorded some hoacky contract to buy the home for 100k.. I call him and say hey dude now I get the wholesaler bit but don't you think a 90k wholesaler fee to flip a property to me is a little much.. you should give more to the seller here.. its a single lady who probably could really use the money.

Him ha bla bla bla  and I simply wont close on it I had it tied up for 45 days and told him no way no comfortable taking so much from the seller.  ( I Know I know should not matter to me  but it does )

so then a week or so goes by call back.. OH turns out the home is in foreclosure and the payoff is 208k.. so our would be wholesaler kind of messed this up. the never checked to see how much the lady acutally owed LOL.. I told them good luck take it some where else.

So now they list it ( not sure how they do that since they dont' own it but I don't get into their business)  for 260k and it sits and does not sell. they come back to me now .. home is going to be lost in 10 days will I pay 220k.. I say nope.. pass.

long story short I gave them 5k and they were lucky to get it and I paid 211k for it 3 days before the auction.. lady got nothing but she was happy...

I then tore the house down and am building a 2,000 sq foot home that will cost me about 220k to build list price 650k in that area.. 220 plus 211 = 431k  cost of capital 19k in it 450k  sales costs 30k net profit 120k or so... will post pictures and numbers when done..

Wholesaler went from thinking they had 90k profit down to 5k and never heard from them again.