What to look for in wholesalers?

Question

HI everyone,

I'm new to Real Estate investing. I'm currently looking for my first investment. I've read a lot about people becoming wholesalers but have heard very few stories of investors finding  great investments through  a wholesaler.  I'm currently using MLS searches, Zillo, and Craigslist. However I'm curious to know if connecting with wholesalers is a viable option for finding good deals? If so, can anyone refer a reliable wholesaler in the Raleigh North Carolina area?

Thanks.

Adam Schneider · Answer

In many ways, wholesalers are like people in other industries in that there's a huge bell curve of skill sets. What's different about wholesalers compared to some industries is that there is no barrier to entry in becoming a wholesaler. No license, schooling, etc. So, you'll have so many more people enter the arena--and leave the arena quickly. The good wholesalers become skilled in determining repairs and ARVs and networking. Their goal is to do repeat business and build a brand. The bad wholesalers...not so much. PRO TIP: Interview the wholesaler like you'd interview anyone who is providing an opinion. Ask how many deals they've done, how they determine their repair numbers, and how they determine their ARV. Those 3 questions will enable you to quickly vet the wholesaler and save time.

David Semer · Answer

@Lee Brewer you should check out

https://www.meetup.com/Triangle-Real-Estate-Deal-M...

This is a meeting strictly for selling wholesale deals non MLS deals.

Just like everybody else said you have to do your own due diligence on each deal you look at to see if the numbers makes sense for you and at what price they make sense.

Full disclosure I know @Adam Schneider  who runs the meeting and is an incredible resource.  In addition he knows the Raleigh market very well.

Good luck.

Brian Truman · Answer

Hi @Lee Brewer,

Disclosure here.... I am a wholesaler. But, I will tell you what to look for in a wholesaler.

• Do they use direct mail, or use some program to generate leads? Without leads, they are dead in the water...and won't be able to bring many deals to you. 
• See what their comps look like... if they are getting ARV's using houses that are outside a neighborhoods "borders", or are more than one mile away....  they are picking and choosing their comps, and propping up the values...
• See if they will give you references from investors they have worked with.

That would be a good place to start... Unfortunately I do not know anyone in your area. But you are in the right place to find someone. Happy hunting, and I hope those are helpful tips for you...Cheers!

Brian Truman

Steven Leigh · Answer

Every wholesaler in your area would LOVE to put you on their buyers list, so you'll have no trouble connecting with them if you are looking.

I don't know that you really need to try to qualify them, just get on as many buyers lists as possible. Then you have lots of deals coming to you throughout the week. Some will be terrible, some might be exactly what you're looking for. If you find that some wholesalers are consistently sending you bad deals, don't even bother telling them to stop, just filter their email address to the trash. The good ones will prove themselves.

Having said that, be ready to jump on a good deal and make a quick decision! Nothing annoys me more than supposed "cash buyers" who contact me about a deal two weeks after I sent it out. I'm like, "Yeah, that house was gone in 12 hours. Get back to me a little quicker next time." :)

Lee Brewer · Answer

Thanks to everyone for the great advice! You all have been a big help.

Josette Reynolds · Answer

Welcome, Lee! Along with this platform, you can also join your local REIA and FB. Good luck!

Paul Amegatcher · Answer

I'm looking for more deals so send some my way @Steven Leigh.  ;-)

Steven Leigh · Answer

And what @Paul Amegatcher isn't telling you is that the other wholesaler was me! :)

Just kidding. Nice grab, Paul.

Paul Amegatcher · Answer

As a wholesaler I will say this "Do not trust anybodies numbers do your own due diligence".  As @Steven Leigh Stated above you want to get on as many lists as possible this will allow you to get properties coming your way on a daily basis and also allow you to evaluate those properties.

I recently purchased a property from another wholesaler because I saw value where they didn't.  Its all about market knowledge and finding value where others don't.

Steven Leigh · Answer

Agree with the posters above. I forgot to mention the most important point:

Do your own due diligence!!!

I seriously do not understand why investors complain so much about wholesalers who get repair values wrong or price the house wrong, etc. Why aren't you doing your own due diligence????

Personally, I would NEVER even consider buying a property without running all of the numbers myself, inspecting the property, estimate repairs, and everything else.

My point with getting on a lot of lists with wholesalers is you get a lot of deals coming in, then you can evaluate them with your OWN methods as to whether or not they are a good deal. Then it doesn't matter whether the wholesalers are "good" just that they are sending you deals.

What to look for in wholesalers?

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