Just don't understand wholesaling

[Stephen N.]

1. If a deal is really a good deal why would you want to wholesale it to someone else? It just doesn't make sense me.

2. I hear about people who wholesale REO's. How is this possible? Why wouldn't investors who buy wholesale REO's just try to buy them directly from the bank?

[Account Closed]

1) Because new investors do not always have the ability to do the work to the property. They don't have the funds or credit to purchase and rehad the property to resale it. Or to buy and hold it. So for them they get to make some money and make an investor happy at the same time. That is why wholesaling ad bird dogging are popular among new REI, that have little or no cash to start making deals.

2) Don't really know about the wholesaling aspects of REO because I don't know of anyone that has been able to get a bank to sign an assignable contract. But using transactional funding to flip I have seen. However to answer the questions on why an investor might rely on someone else to find the deal and pay them for it.

Simple, they don't have time to do it themselves. They invest in many areas so for them to find and keep up with all of the REOs for sale in an area is impossible. Why not let someone else do the leg work.

Kind of like, you can return phone calls to the 200 people that left their name and number on your website, but isn't it easier to pay someone 8 bucks an hour for a week to do it so you could do things like find new properties, or new investors. Its all about leveraging your time.