Wholesaler perception as unethical?

[Eddie Garcia]

My first post I believe to BP although I’ve read numerous posts within multiple forums. I get a feeling from the community here - specifically buyers - that the wholesaler is unethical 99.9% of the time and not to be trusted with deals. I’m ready to begin working on moving into real estate starting with wholesale to fund other eventual real estate strategies (flips, buy/hold, multi tenant, etc). However, will this negative connotation of wholesalers in general cause setbacks? Thanks in advance for your thoughts.

[RJ Browning]

@Eddie Garcia I have also been reading alot of the "wholesaler bashing" that has been going on in BP forums. It seems that there is a general consensus that wholesalers do not add value to the transactions and are usually dishonest and unethical in the way they conduct their business. Not to even add in the fact that most claim its illegal. 

My thoughts are this, Wholesalers can and do add a value to the realestate community. They generally market for off-market properties and provide a service to property owners that want to sell their property without having to dress it up for the MLS. I tend to think of wholesaling as the "pawnshop" alternative for houses. Do you think the WE BUY GOLD people pay what the piece of jewelry is worth? No.. they pay a scrap price, that price is well below market value for a complete piece of jewelry but who wants a broken ring? Its the same concept. WE BUY GOLD businesses and pawn shops offer a service. So do wholesalers.

As far as the legality goes, consult a local attorney. Personally I feel certain that there are more areas that you can assign equitable interest in contracts vs those you can't. However it is a gray area almost everywhere. Of course the Licensed side of RE isn't going to support the unlicensed brokering of houses regardless of the method used. But I say if you do it transparently and ethically, then rule the gray area...