The Key to Wholesome Wholesaling

[Lisa Treadwell]

My son wants to start wholesaling as an easy way to get into real estate with little capital. I've been doing some research on it b/c I feel a bit torn about the equitability of it.

My brokerage helps seniors downsize into low/no maintenance housing. Specializing in this area of real estate since 2010, I've grown a huge heart and am very protective of seniors. I have investors approach me all the time b/c they think they can get a good deal on my ideal client's property. I have a hard time with this. It isn't in the client's best interest to sell to an investor when they could sell to a non-investor for 75k-100k more, in some cases.

I found myself looking for what the ideal situation would be that a seller would work with a wholesaler and it would be a win-win for all. I have some ideas, but I'd like to open this up for discussion here. I'd love to hear your ideas!

Lisa Treadwell

Real Estate Broker

Indy Real Estate Experts

[Cornelius Garland]

@Lisa Treadwell When I first started wholesaling in 2015, I was torn over this very same thing. My father went so far as to tell me that I was "ripping off old ladies." That one stung and stuck with me.

8 years later, this is far from the truth. As wholesalers, we are really only serving 5% of the marketplace. Most of the homeowners I work with are of sane mind and not in a desperate situation to sell. They just prefer not to work with a realtor. Usually, it's because the house has extensive damage or they live out of state. I am not looking for "motivated sellers" like most wholesalers. I want to work with cooperative people who have a good idea of what investors do and already realize the advantages of working with one.

I believe wholesaling gets a bad reputation because new wholesalers have no idea what they're doing. Some of them are so hungry to close their first deal that they have no regard for the seller's wants or needs. They'll say whatever they need to do to get the deal closed.

Also, they are not knowledgeable about marketing. In reality, wholesaling is not really about real estate - it's all about marketing. Many wholesalers, both new and experienced, are not familiar with how to target their ideal avatars. I think wholesaling is a great entry into real estate, but I'd encourage your son to learn how to close a few wholesale deals himself to get familiar with going through a transaction from start to finish, evaluate which parts he's good at, and then specialize in a particular niche in investing where he's solving real problems while developing a useful skill set.

For instance, some of the guys I started with are only working probate leads where the owners are long deceased and the properties are tied up with liens. Some of these homes are sitting in limbo for decades and the city appreciates investors that clean up the title. Other people I know work specifically on foreclosures and short sales. I, personally, decided to niche down and currently, specialize in the marketing and business operations side of wholesaling (i.e., hiring and processes). 

I close deals by partnering with investors who struggle with this. I come in with my systems and my team, and I help generate leads. My joint venture partners will focus on acquisitions and dispositions (finding the buyer) while I'll handle transaction coordination. I cannot overemphasize how important it is to have a skill set that you can hang your hat on in this industry as wholesaling only works when the market conditions are right. Hope this helps.

-C.C.