Wholesaling Haters. Im bummed.

[Christopher Mozgawa]

Ive been reading most of the morning on BP. I have read of how many people here do not have any good experiences with Wholesalers. That really bums me out. I have been reading as much as I can in the past few weeks on this topic. I figured that BP would be an exciting place to learn wholesaling. What I find out is that there are some disappointing post here on wholesaling. Negative people I guess. I was so excited to start wholesaling. I do have money to buy a house but I was looking forward to making money wholesaling. Is wholesaling respectable? I have listened to all the podcast on wholesaling. The podcasts are great !! Thank you (Bigger Pockets) Please tell me the truth people. What has owning a wholesaling business done for you? Man! Im so bummed. I am going to do it anyway. I am a good truthful person and that's the way im running my WHOLESALEING BUSINESS !!!!

[Aaron Mazzrillo]

Here's the number one problem with the wholesaling business; it attracts complete newbs with ZERO experience and ZERO money because they think it is the best strategy to avoid any risk. The problem is, they have no clue where to find and put together a deal. SO, they find some other newb wholesaler with some crappy non-deal, then tack on $5,000 and start shopping it around to all their 'buyers.' Well, one or more of their pretender buyers with their "I buy houses all cash and close fast" business cards, who actually has never closed on any house and has zero cash thinks "I'll just wholesale this house and get some money going!" So, he tacks on $5,000 to this already marked up non-deal and starts shopping it around. Now, we have a daisy chain of pretender wholesalers all shopping around the same non-deal to every REI in the land.

I find nothing more hilarious than when somebody stands in front of a room of 100+ people at the local REIA and announces their smoking wholesale deal. Just absurd! If it is such a smoking deal, why is it being dragged from REIA to REIA and has no buyers yet?

I was at a meeting last week and this girl stands in front of 500+ people and announces she has notes 10 cents on the dollar. Not one single person stood up. Not one! If she really had notes so cheap, she'd be mobbed. Nobody is interested because we've all heard the same BS time and again.

If you are deciding you are going to be a wholesaler because:

A. You have no money and think this is the best way to get into real estate.

and/or

B. You think that if you wholesale, all the risk will pass to your buyer and you can just get checks for tying up properties...

You probably will have a few frustrating months, then decide real estate investing is a scam, doesn't work, or whatever other excuse people who fail use.

Here's the truth from a former rehabber who now wholesales (my last check was for $47K); wholesaling costs LOTS of money. I spend THOUSANDS of dollars every month on marketing in order to bring enough deals into my funnel. I hire marketing consultants. I hire copy writers. I am in mastermind groups for real estate and direct marketing.

Yes, I take down some properties, but I pass on tons of great deals to my very small list of buyers as well. I can't buy them all and nor would I want to. I pass along fat equity rehab/flips and sweet rentals. Sometimes I need the money to pay for another property I'm more interested in. Sometimes I just want my buyer to get a great deal to make up for a not-so-great deal I sold him earlier.

The key to being a great wholesaler is deal flow. If you're only finding 1 deal every few months, you're better off rehabbing it yourself (or partnering with some) because you'll make more money. It will also give you the experience you need to survive in this business. Lastly, you may ultimately decide wholesaling isn't really for you. My local investor friends who rehabbed and flipped over the last 3-4 years are MILLIONS ahead of me. Yeah, they've made MILLIONS more than I have and most of them own dozens more rentals than I own. I would put rehabbing and flipping first if I were you or anyone else reading this post thinking they are going to get into real estate and wholesale. I wholesale because I absolutely detest flipping homes. I want to do a rehab like I want to be rear-ended by an uninsured driver. I've rehabbed and flipped, and quite successfully I might add, but I just didn't enjoy it. That is why I wholesale. I prefer just to make the kill and leave the hauling, skinning, and dressing to the butchers.

I hope this helps. Happy investing!