Considering Wholesaling

Considering Wholesaling

Dallas, TX · Member since 2015 · 11 posts · 2 votes

I am interested in wholesaling in my neck of the woods in Dallas where we are seeing a lot of flipping activity.  I am an attorney and am familiar with real estate but I am not a real estate agent or broker.  I have read much here and on the net about techniques, but I don't see discussion about the essential business model for wholesaling, and what is the specific appeal to the seller is.

First off, it seems patently obviously that the majority of folks sell their house in the typical way: hire a real estate agent and list the house. I realize the target seller for the home wholesaler is one who is in some immediate distress, but it seems to me you still have to address the common believe that a good real estate will maximize return, and who doesn't want that, even in a distress situation? 

Am I wrong in thinking that the vast majority of sellers would intend to list their property with a real estate agent, and therefore the business proposition is that I as a wholesaler can maximize return in minimal time and a real estate agency can't. Seems a very difficult sale to make.

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  • Portland, OR · Member since 2015 · 141 posts · 28 votes
    10y

    A lot of houses aren't in good enough condition for listing

  • Wholesaler · Waldorf, MD · Member since 2015 · 459 posts · 245 votes
    10y

    @Stanley Denman a distressed seller typically can't wait on a typical retail transaction. Distress can come from the actual property, which means they would have to fix it up to sell via an agent. Distress can come from a divorce situation, impending foreclosure, absentee owner, late taxes, etc.

    Some sellers want piece of mind, which trumps maximum ROI. A landlord with a troubled property, is spending more money than they make. They just want to sell as quick as possible. In some states/cities it's a long process(up to a year) to evict tenants. In DC, some types of rental properties (4+plexes) you can't even sell unless the tenants AGREE to ALLOW you to sell.

  • Raleigh, NC · Member since 2011 · 721 posts · 343 votes
    10y

    It boils down to motivation.  Many sellers don't to or can't afford to put money into a property they want to sell.  They think that if they list it with an agent the process could take months.  If they sell through a wholesaler it could take weeks.  If the owner lives in the house they don't want the constant interruption of showing the house etc.  There are many other reasons.  The bottom line is that it makes sense for a lot of sellers.  It has for decades and will.

  • Dallas, TX · Member since 2015 · 11 posts · 2 votes
    10y

    Good point Jeff. Wonder "how bad" a house has to be for a realtor to refuse to list. Certainly major structural like damage or foundation. But I am looking primarily at good sound homes about 30 -40years old that have simply never been updated. Do you think most real estate pass on listing such a house?

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