Tips for a Successful Relationship with your Wholesaler

[Sean Cole]

This isn't meant to be a defense of wholesalers or wholesaling - some folks have no issue with wholesalers and others think we're all scum.  It's ok if you're in the second group - just don't bring any negativity this way!

Because so many folks on BiggerPockets are new(er) investors, this post is merely intended to help them work with wholesalers if they choose to go that route.

1.  Be honest about who the decision makers are.  If you can't make the decision on your own, we're ok with that - we don't think any less of you.  We do want, however, to be efficient and show the house to all interested parties at the same time.  It's not the same thing to show you the house and then have you tell your money partner about it.  Let us be the buffer between you and allow us a chance to overcome any of their objections.

2.  Be realistic about how your criteria might limit you.  If you only want 3 bed/2bath ranch houses will a full basement in a 1/2 mile radius from your house, we might have a challenge finding you deals.  It's ok if that's all that you want to do, but you'll need to be open to going outside your comfort zone if you want to do more than 2 or 3 flips a year.

3.  Pester your wholesaler when you're in the market.  I don't mean to sound like I'm bragging here, but we have just shy of 1400 people on our email list.  If we don't know you're looking for a house right now, we may forget to call you when we have something that meets your needs.  Call me, text me, email me every day or every other day when you're looking for something!

4.  Don't try to negotiate price, especially if you haven't even been to the house yet.  There's nothing that we find funnier than that.  It's a great way to get you moved to the very bottom of our list of people to call.  

5.  If you decide not to buy a particular house, share what you did and didn't like about the deal.  It's the best way for your wholesaler to not waste your time calling you about deals that won't work for you.  We're successful if we find deals that work for you and your model, and that's what we want to do!

6.  Communicate with your wholesaler if a challenge comes up prior to closing.  And do it as soon as the issue arises.  We can add a few extra brains to figuring out a solution, but waiting to call us adds time pressure that's not helpful.  Because we talk to so many investors, we've probably heard about someone else that had your same challenge and can find out how they solved it.

7.  If you disagree about ARV, provide some comps - not just your gut feeling. Our company generally provides 5-8 comps to justify ARV for each deal we market. These are houses sold on the MLS within the last 6 months if possible, and up to 18 months if necessary. Your wholesaler (hopefully) isn't Photoshopping the comps they provide, so if they're truly comparable, don't get caught up in the 1 or 2 houses that also sold much cheaper. We both know your house will be much nicer than those cheap ones when your'e finished with the rehab!

There are some other tips that I can add, but I'd like to keep this short and touch on the ones that we see missed most often. We can get better at what we do, too. We know that, and we constantly seek out feedback from our customers. We run a professional business. Wholesaling isn't a hobby for us or a way to "move up" to flipping. Since I started wholesaling houses in 2012, the median resale price of houses my customers have bought from me is over 105% of my published ARV. We've sold over 50 houses so far this year.