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Wholesaling
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New to the game

Rob Rawls
Jacksonville, FL · Member since 2014 · 8 posts · 2 votes

Hey everyone, just figured I'd post here to kind of introduce myself. I posted in the new member intro forum but since I'm going to be focusing on wholesaling I figured that I would post here. Just learning right now and getting my ducks in a row before I start marketing and getting some deals set up. I live in Jacksonville, FL and want to start networking and learning as much as I can from y'all.

The question I would like to pose to everyone here: why is it that most wholesalers try to make enormous profit just for marketing/negotiating/closing a sale. From what I've read, there are a lot of wholesalers that have a bad name in the investment community due to trying to overreach their profits, taking the spread away from the investor.

I guess that way would work for some, my plan is to take enough to make it worth my time... 2-3k depending on how long it took to market/how much i spent on marketing sounds great to me... I just dont understand taking 5-10k or more and never getting the same investor twice because its not as lucrative for them. If there is one thing that i have learned just by reading here its that wholesaling is about relationships and rapport with investors/buyers.

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Simon Campbell
Miami, FL · Member since 2012 · 612 posts · 189 votes
12y

Much will depend on the individual deals that you can find. As the market shifts, some properties or some market areas are being sold at much less a discount than in years past.

If I were a developer and was working with a wholesaler that found deals at 10-15% below market value (as an estimate), I would be happy regardless of the extra that goes to the wholesaler. In your case, you may find a property that is 20% below market or one that is only 12% below market, your buyer gets a deal but your commission will vary immensely.

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  • Tom Mendez
    Commercial Multi Family Broker · Spokane, WA · Member since 2010 · 139 posts · 27 votes
    12y

    I agree about the relationships part, but I have noted that quite a few wholesalers, including Jerry Puckett--I just listened to his Podcast--state that his goal was always to get $10K, but averages around $7K per deal.

    If you learn to negotiate well, and not become greedy, the math will care for everyone involved well enough.

    Best to you!

    1Reply
  • Rob Rawls
    OP
    Jacksonville, FL · Member since 2014 · 8 posts · 2 votes
    12y

    Yeah I'm actually listening to the BP Podcast with Mike Nelson right now and he just got done saying try not to take less than 5k for a deal. I guess it's all dependent. I think that you can definintely shoot for higher profits after you have rapport built with buyers, guess i keep thinking about it from a new-guy's perspective.

    0Reply
  • Laura Moore
    Residential Real Estate Broker · Kingman, AZ · Member since 2014 · 131 posts · 18 votes
    12y

    @Rob Rawls Welcome to this wonderful site. I am also a newbie here that has learned alot in a short amount of time. I am working on becoming a wholesaler in Northern Arizona. Good luck to you...

    1Reply
  • Simon Campbell
    Miami, FL · Member since 2012 · 612 posts · 189 votes
    12y

    Much will depend on the individual deals that you can find. As the market shifts, some properties or some market areas are being sold at much less a discount than in years past.

    If I were a developer and was working with a wholesaler that found deals at 10-15% below market value (as an estimate), I would be happy regardless of the extra that goes to the wholesaler. In your case, you may find a property that is 20% below market or one that is only 12% below market, your buyer gets a deal but your commission will vary immensely.

    2Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    Good to see you back Simon, but under market = distressed sale, a better term for what they are to do and find. :)

    0Reply
  • Kyle Nelson
    Jacksonville Beach, FL · Member since 2014 · 2 posts · 1 vote
    12y

    I completely agree with you Rob. For wholesalers that do the business individually trying for 2-3k seems like it could be a lot more profitable than 5-10k becuase as you said it could establish more rapport and end of having more buyers or repeat buyers. I defiantly wanted to reply here as well to introduce myself as I also live in Jacksonville Florida and am in the education phase of wholesaling and want to start the action eventually. I hope everything goes well for you and if you ever want to trade strategies or ask for some opinions just give me a holler.

    0Reply
  • Clary C.
    Real Estate Agent · Attleboro, MA · Member since 2014 · 91 posts · 15 votes
    12y

    I'm also a newbie to the game as well. I reside in Massachusetts.

    0Reply
  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    12y

    @Rob Rawls @Clary C.

    Welcome. I have buddies doing deals while deployed.

    A buddy tells me sometines he make 1K on a deal because it involves only 2 quick phone calls.

    Check out the Start Here page http://www.biggerpockets.com/starthere

    Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

    Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having 50 past ones to catch up on.

    Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

    Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will locate fellow wholesalers and all the cash buyers (rehabbers) you will need.

    Couple great reads

    Good luck

    Paul

    @Clary C.

    0Reply
  • Jason Varney
    Investor · Jacksonville Beach, FL · Member since 2010 · 71 posts · 7 votes
    12y

    At the end of the day, it shouldnt really matter what the wholesaler makes. If the end buyer agrees it is a good deal, then profit doesnt come into play. Many wholesales have formulas they use and their purchase price builds in the profit they want to make on the deal. If they can negotiate it at that price then it works for everyone. If a good deal is buying property X at 40k, but the wholesaler is able to negotiate and buy it for 15k, why shouldn't he take a sizable profit? I know wholesalers who consistently make 8k on deals and have a customer base that keeps coming back for more because they are truly good deals in the end.

    What I dont agree with is a wholesaler not being able to negotiate the price that is right for him/herself and the end buyer, yet trying to still take their sizable profit. Good wholesalers are good negotiators and unfortunately they can use this tactic with inexperienced buyers. While buyers should have a good understanding of the market and deals themselves going into it, alot of beginners rely on mentors and wholesalers to help them get started.

    1Reply
  • Simon Campbell
    Miami, FL · Member since 2012 · 612 posts · 189 votes
    12y

    I like @Jason Varney thoughts on the matter. If you have a minimum that you want to make on the deal, then all buyer offers above and beyond that number is just icing on the cake. The flip side can be that what a wholesaler was regularly making two years ago maybe much higher than what he or she can make now or in the future. You have to stay in tune with the market as a whole to gauge your return.

    1Reply
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