Wholesalers getting desperate?

Question

Two years ago, I received maybe one or two generic letters a month from wholesalers asking if I wanted to sell one of my rental properties.  Each address would generate a postcard to my mailbox.

During the last year, I received four or five postcards/letters a week from wholesalers asking if I want to sell my rental properties.

Over the last two months, I receive at least one phone call a week from wholesalers pestering me about if I want to sell my rental properties.  Got one last night.  Got one this morning.  I guess I'll start getting daily phone calls now.

What's next?  Are they going to start knocking on my door and offering a dime on the dollar in person?

Elbert D. · Answer

LOL....its actually funny. I think wholesalers dont realize the difference between aggressive and nagging. There should be hustle to any business. But it should be done in moderation and well organized.  I wholesale....but I also know how to analyze properties for rehab, have a realtor run tight comps and know the correct contract verbiage that goes into wholesaling. Many wholesalers dont realize how much work it is to currently wholesale. The people who made money wholesaling in 07,08 and 09 are teaching you how to do it now but the market situations have changed since then.

Next is many wholesalers will tie up your property for 30-45 days hoping to sell it and will return a day or two before the contract ends saying they need a extension. As someone said above for every 1 wholesaler that is good(usually means he or she is a good businessman or businesswoman) you have 20-50 people that arent good at all and only see the potential of a "quick dollar". Many of them will just waste your time as well as their own. Many of them couldnt tell you whos their target buyer  because they dont know if the house is a flip or rental property.

Many people keep saying oh its deal all over or its plenty of house....LOL really???? so there is a unlimited number of houses in your city???? Inventory is extremely low all over the United States and people dont realize that because they dont understand their market and most of the time dont underestimate on rehab cost. Combine that with REOs and HUD with their ridiculous prices(many of them say no to assignments) and increased competition from more and more people entering wholesaling due to more people selling courses on wholesaling as if its such a goldmine and here you have the current market situation. The universal law of economics applies to all businesses in the world. Law of supply and demand....pretty soon everyone will be a wholesaler lol then who will be the buyer????

In all seriousness there are a lot of wholesalers not making any money at all after a year or two because they dont realize the general real estate knowledge thats needed as well knowledge of rentals and flips(those are your buyers) the overall hard work. Its ok when they are new to be clueless but after 6 months maybe 9 or 10 at the most they should have knowledge about what they are doing and the real estate market. Dont believe the lies that wholesalers only work 4-5 hours a week. Thats BS....unless you have maybe 3-4 people working as a team with you with a lot of money going to marketing for buyers and acquiring houses. This is a business! To be successful at this you should spend a lot of hours reading, applying what you read and finding real deals. Deals are were everyone walks away happy. Its in this order.

1.Seller(its his or her property)

2. Buyer(it has to be a good cash flowing property for a landlord or a good profit for a flipper, otherwise ITS NOT A DEAL)

3. Then lastly you take what you can get from the transaction(you must know how to analyse properties to see how much you can get)

Sorry for the slight rant, but many wholesalers dont take it seriously and then get sad or angry when they arent successful. For the ones that do but are just new find someone thats local to you and ask to form a partnership and give that person some kind of value. Real estate is a BUSINESS. ^__^

Randy E. · Answer

If I ever want to sell one of my properties and my only viable option is a wholesaler, I would have failed worse than I ever imagined I could.  The whole idea of wholesaling works only if the wholesaler contracts the property at an extremely undermarket price that an actual investor can then buy for a greater but still undermarket price.  I shudder to think of what would drive me to consider "selling" my properties to a wholesaler.

Account Closed · Answer

Yes, they will. I have a MOUNTAIN of these cards, and have been screening their calls.  I halfway expect them to be camped out around my PO Box, hiding in my bushes, showing up in the shower while I'm brushing my teeth, chasing me around like some sort of broke ghost.

Then when someone replies back to them asking to stop being contacted, they will post here being all amused/confused as to why anyone thinks they are scammy pests.

Grant Rothenburger · Answer

@Randy E. I think it is a combination of lack of deals + for whatever reason, the last year to two years has been the years of the wholesaler. Wholesaling has become so popular lately, there are 22 bad/inexperienced ones for every 1 good one.

Diante Lawrence · Answer

I always viewed getting letters from a wholesaler like the mail you get from credit card providers. You hate receiving them until one day you decide to get another credit card, and BOOM you look in the mail and there it is. Wholesalers reading this thread don't get discouraged its a numbers game; and investors receiving the mail you may need them one day and could potentially connect with one of the good ones that you will build some good business with.

Aaron Rowzee · Answer

These postcards and bandit signs may not all be wholesalers. I'm about to do a large letter campaign just looking for deals. Whether flipping or buy and hold, the deals are drying up for everyone it seems. I've had two people in my local BP meetup ask me if I "knew any wholesalers/wish we had more wholesalers in our area" because no one can source anything after Harvey.

Pretty much everyone is getting in the game and these no-tact, trashy types that answer the phone with food in their mouth won't last long. I'm fairly confident that stuff like this is atrocious to even a desperate pre-foreclosure home owner.

David S. · Answer

It doesn't bother me to get a bunch of postcards/letters from wholesalers.   These are possible contacts of you are looking for deals.  Also, you can take the best material and use it if you decide to do your own direct mail campaign. I get every other type of junk mail so one or two more pieces is not life shattering.

In my market, getting a decent MLS deal is like winning the lotto.  Real estate investing is en vogue now and EVERYONE is doing it. My banker is flipping houses.  My maintenance man is flipping houses.  Even my AC guy's Sunday School Teacher from his childhood is flipping houses as well as every other Jack, John, and Jill. And a lot of these folks are outbidding seasoned investors then losing their shirts because they paid too much. Personal network is the go to nowadays along with DM and wholesalers (good ones).

Bob B. · Answer

I've called a couple told them I was a buyer and asked to get on their buy list.  Never heard back from them.

Way too many folks chasing too few deals in a sellers market.

Dave Rav · Answer

The market is definitely tight.  I do also agree many wholesalers lack proper know-how and fail to conduct appropriate due diligence when they present properties to you.

Lesley Resnick · Answer

One of the biggest problems is that every guru class tells people to start with wholesaling weather you know what you are doing or not.

It is a sellers market and the guru are churning out more wholesalers every day, driving the demand further.  This only makes the problem worse.  There are only so many grandmothers you can convince that if they don't sell their house to you, grandpa will not get his meds.   I believe the states are going to step in and shut down the practice.

Wholesalers getting desperate?

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