Wholesaler Does and Don'ts

[Annette Hibbler]

I've been working with wholesalers for a long while. Most are good solid relationships others fall apart after just a few months. I thought I'd share a recent experiences that other aspiring wholesalers may learn from.

As someone who represents my own clients who are investors themselves I have to have a reliable source of information. I have built and continue to build a solid network of real estate agents, wholesalers and the like. From an investors perspective there are certain things wholesalers should definitely avoid doing and other things they don't do enough of.

1. Don't tell me you have an exclusive relationship with seller unless you have an actual written contract. I recently was pushing a bulk deal of five SF turnkey rentals (all five from the same seller). My wholeseller assured me he had exclusive deal with the owner. Come to find out less than three weeks later, from at least two other wholesalers that someone else was also offering a similar deal ON THE SAME FIVE homes (for $25K higher).

2. Don't EVER, and I mean EVER talk to my clients about price. I recently was taking a client on a tour of the area which included a prearranged visit to a certain property. During our time there, the wholesaler starts talking directly to my client about other properties available and quoted him a price! Needless to say, that's the end of that relationship. I won't ever work with someone who cannot respect business ethics.

3. Wholesalers who promise you much but deliver little. My clients require as much information up front as possible. I rely on my wholesalers to double check and make sure that information provided from seller is actually accurate. I've had rent rolls for last 12 months presented to me that were actually fictitious, (house was abandoned and boarded up).

4. Wholesalers should double check the property first hand, make sure there actually is a tenant living there, don't just take sellers word for it. Visit the property first, take pictures or better yet, get a video of the exterior and interior BEFORE you approach an investor.

5. Make a checklist of required documentation for each property you plan to promote such as rent rolls, cancelled checks or bank deposits for rent paid, copy of the lease, proof taxes are current, etc. Make sure there is not a land contract on the tenanted property. Go inside, if you see issues that need to be addressed, talk to the seller about repairs. At the very least, be upfront with investors. The respect and trust you build with investors is worth more than gold to your continued success!

Basically, I want to know that you, as a wholesaler, actually have your act together and information available for me that is reliable. I'll double check anyway, but if your info is consistently accurate, you'll quickly rise up in the ranks as my first choice for inventory.