What makes a good wholesaler?

Question

Hi all! I'm new to real estate and I am planning on investing this year! One of my first goals is to wholesale and it seems like my best option considering my financial situation. I plan on using the money that I earn from the wholesale to invest into a rental property. Now that I have my plan together, I'm trying to figure out where to start so that I can execute my plan. If any of the wholesalers could answer the following questions:

What makes you a good wholesaler (what differentiates yourself from the other wholesalers)?

Where do you get these deals and what requirements do you have?

How did you find someone to buy from you?

How long does this process usually take?

Thank you all for your help!

Jeff Stephens · Answer

Hey C'era, congrats on getting started! Your plan sounds like a great place to start, and I commend you for getting out there and starting to make things happen. I wanted to respond and give you my take on the answers to your questions:

1) What makes a good wholesaler, and differentiates?  In my humble opinion, a great wholesaler is one who does two things:  a)  this person knows their buyers really, really well (knows what they like, how they evaluate deals, how they finance them, when their last project wrapped up, how they get the work done, etc....everything).  When you know them this well, you get a deal under contract and it's easy to place that deal with the perfect buyer.  b) The second thing they do well is make the seller feel unbelievably comfortable throughout the whole process.  Too many wholesalers, in my opinion, tie up a deal, hand it off and leave the seller wondering what the heck happened and where they went.  My ideal wholesale scenario is one where my seller never worries for a second, because they like and trust me and I'm there to shepherd them through the entire experience through closing.  Behind the scenes I'm placing the deal with a buyer, but it's all behind the scenes and totally seamless.

2) The deals can come from lots of different places, and for each wholesaler it will be different. For me personally, my philosophy is that "wholesaling opportunities will be a natural by-product of me being amazing at identifying opportunity and building rapport."  I send letters, do networking, etc. and I know that if I'm always on the hunt for great people and properties I can work with, it will lead to both acquisitions for myself as well as wholesale deals.

3) Find your buyers by seeing who is active in the community doing projects.  See a porta-potty in your neighborhood? Stop and look up the property, to see who's doing the job.  Ask around, network and keep your eyes and ears open, and you'll find out who the real buyers are in your market.

4) The process timeline will depend greatly on how well you know your buyers. I'd always rather know 20 buyers super well, than have an email list of 1,000 I don't really know (again, just my personal approach). With that type of knowledge of your buyers, you can often get a deal placed with them in just a couple phone calls.

GOOD LUCK!!

Christopher Brainard · Answer

I'll second what @J Warrens said and add this:

1) Know your numbers and make sure they're realistic. I get a dozen emails a week from wholesalers who provide an ARV which is twice what it actually is or repair numbers that are a tenth of the actual cost. While it does take a while to really nail down precise numbers, make sure you're in the ball park. It saves everyone a lot of time.

2) Most deals worth purchasing aren't going to be on the MLS, as there are a thousand other people looking there. Driving for Dollars, Direct Mail, and just basic networking with everyone you know are good ways to come up with off market deals.

3) The easiest place to look is at investor meetups or here. You can also check the neighborhood and see who purchased houses in cash recently. You can also just sent them directly to me :)

4) it depends, finding the house right now is the hard part, the actual sale process usually takes a few weeks.

-Christopher

Austin Pitts · Answer

To answer your first question... transparency and honesty goes a long way in making you a great wholesaler. Transparency with the sellers/agents on the buy side and letting them know your intentions. Another thing is being confident in your numbers and having a strong pulse on the market/resale value and dialing in your rehab numbers.

Delwyn A. · Answer

To be a successful wholesaler, it's important to have a strong understanding of the local real estate market, know how to find motivated sellers, and have the ability to negotiate deals that are profitable for both parties. One key factor that can differentiate a good wholesaler from others is their ability to build relationships with buyers and sellers based on trust and transparency.

Wholesalers typically find deals through a variety of sources, such as direct mail marketing, networking with other investors, and online advertising. Requirements for these deals can vary depending on the investor's criteria, but generally, wholesalers look for properties that are distressed, have a high potential for return on investment, and are below market value.

Finding buyers for wholesale deals can be done through networking with other investors, advertising online, or by building a buyers list over time. When marketing a wholesale deal, it's important to be clear about the potential risks and opportunities of the property, and to be transparent about any issues or repairs that may need to be addressed.

The length of the wholesaling process can vary depending on the complexity of the deal and the willingness of the parties involved to move forward. Generally, wholesaling can take anywhere from a few weeks to several months, depending on how quickly a buyer can be found and how long it takes to close the deal.

Lydia R. · Answer

Great questions! A good wholesaler is someone who ethically sources great off market deals. You aren't lying to little old ladies and telling them their $600,000 house is only worth $250,000. You aren't exploiting a seller's desperation for your own profit. There is a difference between helping and taking advantage.

Deals are found in one of three scenarios: Either the seller is in some kind of distress--foreclosure, bankruptcy, divorce, landlord with nightmare tenants etc.

Second scenario: Distressed property. The house is in poor condition. It needs to be renovated, updated or has some major repairs that the seller cannot afford or doesnt want to make. The distress reduces the value of the property, thus allowing a wholesaler to put it under contract at a steep discount

Third scenario: The seller values time and convenience over money. I had a seller who was in an abusive relationship and needed to sell her rental property ASAP so she could take the money and move out of her abusive partner's home. She could have listed with an agent and waited for an offer closer to the value of the property. But she needed to leave immediately and I got her closed in 10 days. Getting away from the bad situation was more important than the money. Ive worked with out of state sellers who just wanted a simple solution. They signed a contract and then didnt have to do anything else until closing day. The ease of the transaction was more important than the dollar amount.

There are lots of ways to find buyers for your deals. Facebook, Investorlift, Auctions, Agents, Propstream. I could write a book. The best one Ive found has been Facebook with  Hard money lenders as a close second.

Jeff Stephens · Answer

Awesome--good luck! Very glad I could help. :)

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