Misunderstanding

[Jacob Buchanan]

I am having trouble grasping the general idea of wholesaling. Any help??

[Account Closed]

I've operated a successful wholesaling business for over 10 years.

When I was first introduced to wholesaling, I was told it was a beginner's strategy.  I read that opinion posted on this site quite often today.  Wholesaling has sizzle so everyone who is selling some "system" throws in their "wholesaling training" which is nothing more than some white cover, generic program they buy and slap on their label to "bundle" in with whatever they are selling along with a bunch of other "bonus" material they include.  Those materials are outdated and come from someone who hasn't wholesaled in year, if ever.

They all tell you to do the same stuff with a slight variation - letters, yellow letters, post cards, band it signs, etc.  Do you think whomever's material you have is unique to all the others? Do think you are the only one doing those things? 

Today, wholesaling is a business in and of itself.  It's a specialty.  While it's called investing, it really isn't.  It's a job.  To do it right, you have to do it professionally and be mentored by professionals.

If your goal is to buy, fix and hold for rental income or even buy fix and flip (which is also a job), you might consider partnering or developing a business relationship with wholesaler rather than trying to do it yourself.  Here are a few reasons:

If the wholesaler is experienced and good at it, he or she will probably pick up deals better than you will and still be able to sell them to you at a discount below what you would have offered to pay yourself for the property.

If your goal is to fix and rent or fix and flip or some of both, you need to build a crew for that and keep that crew working so it stays together.  That crew is depending on you to eat, and if they can't expect steady work from you, they have to go somewhere they can.  It takes time to build that crew and have it gel.  If it dissipates, you have to start all over.  If you have to go out and find another property, that takes time.  What do you think will happen to your crew while they are waiting on you to find a deal?

If you are doing wholesaling as a side line, how good to you think you will be at it?  Especially, compared to someone who does it as a main line.

Result?  You do a mediocre job at both wholesaling and rehabbing...hardly a recipe for success at either.

How do you think I know all this?

The main reason I read people cite for getting into wholesaling is to generate cash.  My suggestion is find the dominant wholesaler in your area and offer to bird dog for that wholesaler instead.  You won't have the expense of getting started, the frustration of failing, see a lot of properties, learn what makes a property a deal, perhaps find something you want for yourself, and be paid along the way achieving your goal of generating cash.