Finding and Working with Wholesalers as a Flipper

[Trevor Sambrano]

Hi all,

My partner and I have been scouring the internet looking for any available deals in our area in Fort Worth Texas as a fix-n-flip. Unfortunately, we do not have access to the MLS as we just formed our LLC and are are newby's to the business. My partners wife is working on her Realtor's License, so MLS will arrive shortly! However, in the mean time we are working hard to find deals but are not having much success off of the widely used real estate websites. We are currently networking with Realtors, and driving for dollars, however I think it is time we reach out to some Wholesales in our area to assist in bringing us some deals.

Now comes the questions:

How would you suggest we find, screen, and build relations with a (or many) Wholesalers? What advice do you have in working with Wholesalers overall? How would you explain the negotiation process is with a Wholesaler (I know they typically are charging a "finders" type fee, but is their initial price usually negotiable or will they get offended and cut ties with us?)

These are just a few questions, but feel free to provide any and all advice you are willing to help me get started in working with Wholesalers as a flipper.

Also, I came across a "Wholesaling" type website specific to the DFW area in Texas (dfwinvestors(dot)net). I am not sure what to think about it, I'm sure the numbers are not entirely correct, but my own due diligence can make them more accurate; but a good website for deals???

Lastly if there are any Wholesalers in the Fort Worth Texas area that would be willing to reach out to me and learn more about my company goals feel free to send me a PM.

Thanks!

[Jerry Puckett]

Hi Trevor,

I feel your pain man....Let me give you the low down on Cow Town and working with wholesalers. Not trying to discourage, this is just the simple reality.

1) MLS access is great. For running comps, lists reports and all sorts of due diligence. Having an Agent in the "Family" is fantastic for those times you run across a seller that's not motivated enough for a cash offer....getting a listing is a great way to convert a lead. But do not expect to find great or even good deals there any time soon. The best ones are given away as pocket listings, anything remotely decent gets multiple offers and is gone fast. If it looks like a deal and has been on the market more than a week, I promise you something is wrong with it.

2) There are 3 types of wholesalers in DFW. There are the big outfits like New Westrn. They generally do not leave any meat on the bone and you have to be really, really careful with your due diligence. But you can get a deal if you're patient enough and can stomach their high pressure approach. Their price is their price, take it or leave it.

Then there are Newby/Wannabee wholesalers. They want a deal so badly they'll put anything under contract and get so few that they too strip almost all the profit out. DO YOUR OWN DUE DILIGENCE and what ever it is they're asking, just tell them how much you'll pay. They may bluster a little bit, but so what? A) they won't be able to come up with another deal anytime soon, or B) they'll shop their "deal" around until the contract is nearly expired and then come begging you to close.

Lastly, there are the seasoned professionals. You likely will never know who they are. Most of the really good ones are busy doing something else, like flipping, and they happen to come across something that's not a perfect fit or not convenient for them (they don't stop their marketing when they do get a deal, and so often have more than they need). They do not send out email blasts. They call someone in their network that they know the property will work for. They know exactly what the property is worth, and if you don't like the price, they'll just call someone else. So with them it's either yes or no, negotiating is pointless.

To get to know the last type, you need to get busy and network. Really dig into your market and find out who all the players are.

Now, let me ask you, have you ever considered marketing for your own deals? That would put you in the position of the last type of wholesaler I was talking about. Cherry pick what you want, wholesale or refer the rest. Don't have the time? Find one of the second type, fund their marketing and take right of first refusal on anything they lock up. Partner with them.

Lastly, the web site you've mentioned....If it were that easy to pick up wholesale deals, don't you think everyone would be on there? Those types of sites are where the type two wholesalers "deals" usually end up after they fail to find a buyer.

Thanks for the shout out @Ryan Dossey