Are wholesalers considered investors?

Question

Simple question, I don't want to make this longer than it should be.

Why do some wholesalers feel the need to carry the title and call themselves investors? Do you think it makes you look more professional when you call yourself one? I'm sure there are investors who wholesale, I am not talking about that group of people.

I am talking about the wholesaler, who misrepresents others as an investor in hopes to get more deals because the of the weight the term "investor" carries.

I feel this way because I just got off the phone with an "investor" who wanted to buy one of my houses, only to find out that he was a wholesaler with no cash to close. WHY DO YOU HAVE TO LIE.

If you call yourself an investor but you are only a wholesaler that brings houses to buyers (supposedly), I would love to hear your reasoning.

P.S. I am a wholesaler myself, but I hate lying or any form of dishonesty in this business.

John Thedford · Answer

@Simon GhandilYes sir most of them don't like my point of view. That is fine. I personally know people that have been messed over by these game players. Some are simply daisy chain operators. Some are desperate and don't care if they harm sellers...anything for a buck. Of course, I also have a different point of view as an agent. An agent's job is to get the most money for a seller. An unlicensed broker wants to beat the seller as low as possible, chisel off some equity, and pass it along. Don't get me wrong! I too and am investor and want the best deal possible. The difference is when I sign a contract to purchase there is no intent to assign. I get a quick inspection and if it meets my OK, we close and if not I release the seller FAST so they can continue marketing their property. They don't like my POV and will NEVER agree as they are dead set in playing with people's lives and their home. That is what the root of the problem is. Truthfully, I haven't ever talked to one of these operators that was willing to sign a contract with "partner approval", long inspections, and stupid low earnest money. They would never willingly be done the way they want to treat others. Real buyers have no problem putting up 5% or 10%. Anyways, glad we agree at least on some level.

Account Closed · Answer

It all depends if the are going to be a part if the closing. I am an investor on some deals and a wholeseller on others. Some I close in my company name and others I only get a fee.

Brent Coombs · Answer

Nope.

Simon Ghandil · Answer

@John Thedford I feel like I'm the only wholesaler that agrees with your views haha. I have cash to close on a house that I put under contract 99% of the time, but I always let them know that I will intend on wholesaling it to somebody more experienced than me, since I am still searching for my first rental property. If I had a couple houses under my belt, this conversation would be totally different.Key is, all of my sellers know what I do, all of my buyers know that I don't mark up the price ridiculously so I can make my money, so they literally pay a small fee so they can make their money.I've never had a scenario where I've had to close on a house with my own money because I couldn't find a buyer, but if that day ever comes I know I'll be prepared for it.*Awaits comments from new & angry wholesalers waiting to attack you*

John Thedford · Answer

@Simon GhandilNo offense..but it kind of ironic that you got approached by someone that wants to do the same thing. Most of these unlicensed brokers don't have money, mislead the seller, and walk. If you CLOSE, you are way above the cut than most of these guys. What is the difference between a true investor and unlicensed broker? Investors BUY properties and put capitol at risk. Most of these guys learn on BP and who can blame them? Where someone is taught wrong you can only expect them to do what they are taught. I often ask if many of these people would accept a contract-the same kind of contract they want to give to others. I bet not! They would want a solid BUYER, proof of funds, legitimate earnest money, and reasonable inspection period. I recently asked a local if he would take a contract that someone wants to assign..and all I got was a laugh.

Thomas S. · Answer

They do invest their time so in that scenes they are investors.

John Thedford · Answer

Unfortunately this is typical.

Simon Ghandil · Answer

@Chris T. We get a ton of those with our rent to buy homes, and then they get mad when we don't sell it to them for a discount.I get so many of them talking like a robot. "Hey, if you're behind on your payments, let me know because we can make you a cash offer." They'll even ask me how low would I sell the house for OVER THE PHONE. It's very rare to find credible wholesalers that I can network with. I have only a few, my mentor and a friend.

Chris T. · Answer

@Simon GhandilWhen I listed my property for rent and rent w/ option to buy, I got a few wholesalers as well. Obviously, there're not enough margins for them to find a TB. Nor am I motivated to sell cheap.But they have to sound credible. Just like most wholesalers who have "I buy house with cash" signs. They probably don't really have the $$ to buy.