Wholesale or Bust

[David Taylor]

Hey fellow investors. Question. As someone looking to start real estate investing, is wholesaling a good way to start? I feel like I keep hearing that wholesalers are the worst and do illegal things. I mean, you can do illegal things in any form of real estate investing. So, is wholesaling really that bad and a reliable means of investing in real estate? Or is it better to start with another form of investing? Thank you!

[Nelisa Lee]

Wholesaling takes a lot of time so if you have more time than money, it could be a great way to start. 

That being said, I don't believe wholesaling is legal in every state so understanding laws surrounding that before you jump in will be important.

There are definitely a lot of bad wholesalers out there! The best wholesalers operate ethically and understand the business. Some of the best ones I know started as flippers or also flip themselves and/or have rentals so they understand the risks to buyers and all the aspects that go into it and aren't just locking up deals and renegotiating sellers. 

I think a lot of people also have issues with how much wholesalers make. But, with the rising cost of everything if you run a legitimate wholesaling business, the end buyers aren't seeing how much money and time was actually spent to acquire the contract. Some wholesalers will work with sellers for years or months before seeing any return. As a buyer and someone who does wholesale when properties that don't fit our buy box come through our pipeline, I don't ever count other people's pockets as long as the deal makes sense to me, than why worry how much someone else is making on it. The relationship is more important than any one transaction. 

Hope that helps!