What's the point?

Question

ok. So I realize this may be a loaded  and polarizing question, but just putting it out there:

What is the point of having a wholesaler?

Isn't that what real estate agents are for? To "find" the deals?

I say this out of my only experience dealing with wholesalers, has been a lot of them that have sent me potential deals, none of which have been great deals at all. Maybe I haven't found any of the "good ones" yet and I realize that any good deal that comes my way, no matter what route, is good. But it just seems like the market is very low on inventory as it is, and the deals are hard enough to come by, so it seems to be a precarious season at the moment for one to get into wholesaling. How can they find a deal that we (investors / agents) can't?

Is the market just over saturated with over-eager, under-experienced wholesalers out of guru seminars?

I say all this to say, if you indeed are a wholesaler, then by all means, find a great deal and bring it my way (and get paid of course). But so far, I haven't had such an experience yet.

Interested to see responses from wholesalers, investors, agents...

Joe Villeneuve · Answer

What @Ned Carey said...and more.

A good wholesaler does all the work that leads up to closing.  They negotiate, and tie up the property at a better deal than what the AP is at that time.  That deal should also be based on the criteria for the properties their Buyers are looking for, otherwise, like you stated,  "What's the Point?"

The best wholesalers, are also investors...some are investors first.  They are already highly experienced at both analysis and negotiations, and will pass those talents through the properties the wholesaler presents to the end buyer.

Brandon Proctor · Answer

Wholesalers are the people who are suppose to deliver "wholesale" deals to investors. Which takes a lot of work (marketing, vetting prospects, estimating repair cost on properties and determining ARV). Now I'm by no means a expert wholesaler but I am a person who works hard on things I set my mind to.

It can be a headache answering calls day in and day out but honestly I don't mind talking to potential sellers. I see it as 5,000 bucks or more calling each time my phone rings. I like the challenge, I haven't contracted a deal quite yet but I do have two potential sellers and I go see their properties tomorrow. I also just started marketing 4 days ago but studied hundreds of hours.

Also the wholesaler is there to help the seller out with a problem they may have. Maybe they don't feel comfortable going to a agent. Or they don't want to have to pay the commission for the agent. Wholesaler can come in, take a "headache" off the sellers hands and get paid in cash while that headache goes away. Win win for every one!

I just hope I can be that 1 good wholesaler that seems to be so hard for investors to find. Just my 2 cents. Lol

Ned Carey · Answer

@Seth Mosley

Yes but the more people bringing you deals the more likely you are to find good ones

Which is exactly when wholesalers that can find good deals become more important to you as a buyer.

BINGO give that man a prize for the best answer!

Randy Daniels · Answer

I've been reading many posts here on the famed BP site in regards to wholesalers and wholesaling as a whole. What is quite disturbing and frankly disheartening is that the majority if folks/investors are extremely discouraging to those who wish to get in to this business.

Negative attitudes towards the niche and those who choose to step in to the wholesaling arena, name calling, slamming the niche, demonizing those who wish to pursue that route to better themselves etc.

How can someone be a student without being called a sucker? Where/how is one to learn by being a student and not a sucker? Any suggestions are welcomed. One MUST learn FIRST before anything else is to transpire. Who do you suggest we learn from? Are you willing to teach and educate? Are you willing to inspire instead of discourage?

Yet I have yet to read from any of the folks who slam the niche offer any positive suggestions. It's been all negativity. I don't understand that. Other times it's been suggested that instead of wholesaling to become an investor. To invest for ones self takes funds, which is why most, myself included, choose wholesaling to get their feet wet, to build capital, to pay those immediate bills etc.

One statement is true. IT DOES take capital of some sort to be a wholesaler. You need some for marketing, supplies and a few other odds and ends. As far as the properties go, the end buyer's funds are what close the transactions. So yes, I concur that some degree of capital is needed but not a whole lot. The goo roos need to at least start saying, "You need capital for your marketing efforts." I think that will put the whole no money, no credit issue to rest.

John Hamilton · Answer

I do understand that wholesale is the strategy that all or most gurus tell their suckers, er, uhm, students, as the first strategy to pursue on their way to financial freedom via real estate investing. Yet, they do not provide them with half of the knowledge nor reality checks on the actual workings of a wholesaler. "No money down, no credit, and no risk". Right!

I understand that most wholesalers are bogus, fresh out of school, don't have a clue other than what they were taught, and provide less than bogus leads. That's been my experience, but I have found those that were legit. I was not able to take advantage of the situation, so I had to pass.

Why do investors group ALL wholesalers into the despicable or unneeded? I plan to do wholesaling to provide "good" deals to all investors and myself. I hope that I can provide a great service and still make a good living at it. I started out doing this because it was hard for me to find good deals through wholesalers, consistently. Does that mean that all wholesalers are worthless? No. I just haven't found a good one yet.

I think wholesalers provide a much needed service, if they can provide good deals. They put alot of time, money and effort into getting those deals. If investors could do all those things, why don't they and cut out the middle man? I suspect it's because they don't have the time, skill set, knowledge, tools, or interest.

I plan to buy properties and assign contracts using these leads. Whatever I can't handle goes into the wholesale pool for other investors to enjoy. As matter of fact, whatever is in the pool, I will give my top buyers first shot.

That's how I would run my wholesale business.

Mark Cruse · Answer

I guess a lot of it depends on the region you invest in. In Washington DC Metro area there's a lot of inventory. I've never used on but may do so very soon. I'm looking for my next deal and looking to multiple sources to find it. I think the secret is having a good wholesaler. I've heard of people that pass off great deals consistently. That's who I need to hook up with.

What's the point?

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