Finding a experienced wholesaler?

Question

I am newbie. Based on my research here, flipping a house seems like a good place to start. I am not looking to hit a home run, just really want to "do a deal". I need to get that monkey off my back. My market, DFW, seems to be a seller's market at the moment, making a good deal hard to find. Of course, I don't have much experience finding good deals. My thought is: I don't need to find a good deal. I need to find a good wholesaler. Presumably, their skill set is finding the good deal. I feel like I have enough cash and credit to make a typical deal happen. I know many people use wholesaling as an entry point into investing. I am sure I could get on their buyer's list. My fear, however, is a newbie flipper combining with a newbie wholesaler could create an expensive disaster for all involved. So, I am about to start looking for a experienced and successful wholesaler. I hope to build a trusting relationship with them. So, when they tell me they have a good deal, it is actually a good deal. I would, of course, perform my own due diligence. Also, I want to learn how to be a good buyer, someone you call first with a future good deal. A wholesaler like that probably doesn't need anymore buyers but it's worth a shot. To the people that buy from wholesalers: how would go about finding a good wholesaler? What are the traits of a successful wholesaler?

Disclaimer: not meaning to solicit wholesalers with this post. I understand this is not the correct forum that. Only seeking guidance.

Disclaimer: not meaning to solicit wholesalers with this post.  I understand this is not the correct forum that.  Only seeking guidance.

Paul Timmins · Answer

@Matt C.

Welcome.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. There you will find wholesalers. Let them know your buying criteria and asked to be notified when they have a deal. Find out what the rehabbers have for a criteria. Around here its 65 cents on the dollar. I suppose if you said to the wholesaler I am looking for properties 65 cents on the dollar BUT may pay 70 cents on the dollar you would be offering them the potential for more cash. When the deal is posted it is usually the first one to produce a non-refundable check that gets the deal.

Good Luck

Paul

Matt C. · Answer

@Adrian Schlueter Sorry to be long in posting a reply.  I actually started a direct marketing campaign.  As promised, it took 3-4 months to start getting good leads.  I am getting better on the phone also.  I probably missed a few deals due to my inexperience.  So far, I found a good deal on a rent house.  It didn't require any rehab and came with great tenants.  I recently had a house under contract with the intent of doing a full rehab.  I wrote a long post on how that deal ended.  Search for "Just completed my first wholesale deal, against my will".  At the moment, I have another property under contract with plans to do an extensive rehab.  I found this property through my yellow letter campaign, mailing monthly.  The owner called off the 4th letter because he just then decided to sell.  Jerry Puckett is running my yellow letter campaign.  He is here on Bigger Pockets, even has a podcast.  He told me that would start to happen and it did right on time.  It is in a rural property with few good comps, so my ARV is a little fuzzy.   I have been working off the bottom of the range.  My estimate of repairs just keep trending upwards.  At the moment, my inexperience is giving me heartburn.  My decision now is to go forward myself or wholesale it.  I want to do it myself just to get a deal under my belt.  However, there is so much uncertainty in the deal, I am tempted to pass it along to someone a little more seasoned.  To answer your question:  I have not found a good wholesaler, although I haven't really been looking for one either.  I decided to do my own marketing campaign.  If I did make contact with a busy wholesaler that would give me a look at their deals, I would be excited by the opportunity.  But that doesn't seem likely.  I am planning on continuing and probably expanding my marketing.

Chris Piper · Answer

Matt, if you are looking to find wholesalers, you might start by calling people who use bandit signs. Most of them are wholesalers looking to reel in cash buyers to add to their list.

I would recommend starting out as wholesaler yourself. You minimize the risk to yourself or your business, it's fast cash, and you don't need to do a lot with any properties.

Usually wholesaling is the gateway to rehabbing. Also, rehabbing will suck the life out of you. You might make $30K, $40K, or more, but it might take 6 months by the time you get the house rehabbed and get it sold.

I would do what I did, and get Cameron Dunlap's "Fast Cash with Foreclosures" system along with his iFilp system. It's about $1,000, but it is an online machine that gives you every tool you need to get going including: GUARANTEED funding, a list of cash buyers, POF Letters, "Wet Funds", your own cash buyer website, your own seller website, bird dog website, and much more. Also, when you pay the $1,000, it's credited to you when he funds you 1st deal. He charges 2 points for the funding, but that is nothing compared to hard money fees. So as long as he funds a deal for you, it's like the system was free.

That's just my advice, and also, I wouldn't risk your own money initially if you don't have to. Here are Cameron's top 10 mistakes in Real Estate:

1. Originating mortgages in your name

2. Locking your money into a deal

3. Not bringing in enough leads

4. Inadequately pre-screening leads

5. Not choosing an exit strategy before making an offer

6. Funding a deal when you don't need to

7. Needing to do and understand everything yourself

8. Not delegating what keeps you from making money

9. Not becoming a transaction engineer

10. Letting someone convince you you can't do this

Tim G. · Answer

I just know deals can be tough to find when new. And no offense, but as an active wholesaler I'd never sell to a new rehabber unless I was out of options and that would mean its a bad deal.

There is often rehabbers who are doing many many deals and they need funds. So, lend them money and ride along on the rehab and learn the ropes. Best of both worlds. You get a deal under your belt and they secure funding for it.

Matt C. · Answer

Tim Gordon  No offense taken.  Your statement speaks directly to my original question.  I don't really have much to offer a busy wholesaler.  What do you think of the Paul Timmins idea of offering to pay a premium to the wholesaler?  Would that pique your interest?

Matt C. · Answer

Tim Gordon   I have considered private money lending but only briefly.  My concern is making a proper evaluation of the deal and the Rehabber seeking the loan.  Also worried about regulatory issues, etc.  Basically afraid of what I don't know.  However, you have put a bug in my ear.  I am going to do some more in depth reading on the subject.  Tim and other reading along: do you think private money lending is a good place to start?  Better than actually rehabbing?  Also, interested in hearing opinions on how much cash one should have on hand to start lending?

Adrian Schlueter · Answer

@Matt C.   Have you found/completed your first "deal"?  Did you get in touch with good wholesalers? NetWorth?

I'd say i'm in the same boat... looking for that first rehab.. just wanted to see if you've had success

Beau Roper · Answer

Hi Matt,

Glad to have you on here. Give Kyle Rutherford a call. 817.525.0952 He is the manager at NetWorth in the DFW area.

My Best.

Todd Plambeck · Answer

Just to reiterate what @Samantha M. just said I got a wholesale "deal" from one of the local wholesalers the other day which worked out to 84% of ARV.  I know him and his stuff is usually too pricey for my tastes, 75%-79% ARV, so I called to give him some grief.  It was two hours after the email went out and someone had already snatched it up.  Networth Realty has a Ft. Worth office.  They usually have good stuff and their comps and repair estimates are usually very accurate.  Most of their offerings are in the $250k+ market which is a little out of my price range.  Most of their stuff is in the 75% ARV range though.

Samantha M. · Answer

How many flips/rents have you done? 75% less repairs is really great in DFW right now there is no inventory so wholesalers will rightfully mark it up to what the market will pay. Rentals I see regularly go for 82% less repairs. Stop using this 70-65% jargon that you hear spouted here on the forum. Thats a good guideline but it all comes down to whats going on in your local market.

If you are expecting 65% less repairs, good luck...better start your OWN marketing campaign.

Remember either way your going to pay by either: 
	 1) Wholesalers mark up
	 2) Marketing for your own deals (this is expensive upwards of $1,500 a month to regularly produce leads. Plus all the tire kickers you will have to deal with) 
	 3) Competition premium on MLS

Finding a experienced wholesaler?

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