This place is chock-a-block with wannabe wholesalers, what is the reality?

[Eric M.]

Maybe some guru has been advertising heavily on late night tv or something but to me it seems like there are A LOT of new people trying to wholesale. They have been told they can make RE riches despite having no money or credit or experience.

I am not trying to bash anyone (except the gurus) but I was hoping to provide these newbies a dose of reality to offset the hype they have obviously been hearing from seminars or infomercials.

But I am not sure if my experiences are similar to other investors so I was wondering....

Rehabbers and Landlords;
-Do you regularly utilize the services of a wholesaler to acquire your properties?

-If so, what % of your purchases do you acquire via wholesalers? And how much do your wholesalers typically profit on each?

-If you regularly are pitched wholesale deals or scan wholesaler websites, what % of the deals you see do you consider to be legit deals and what % are not (numbers are inaccurate).

-What is your general impression of the wholesalers you have come across? i.e. Are they providing a needed service that is overall positive for the overall REI business? Are they using questionable techniques (legally or ethically) to acquire properties? Does it bother you if they hound people immediately after a death to possibly get their hands on a probate property? Does it bother you if they post bandit signs? Does it bother you if they lie in their pitches to homeowners ("I pay cash", "I have a long list of buyers ready"). Would it bother you if you acquired a wholesale deal that the wholesaler got by unethical means?

Maybe you can surmise from my questions that I don't have a positive impression, but I might be wrong and I would love to hear the other side.

I am open to the idea of having people find me great deals and am very willing to pay for that service; but my experience has been that I have looked at probably 1000 "wholesale" deals and have purchased 0. Virtually none of them are any better (and most worse) that deals I find fairly easily on my own. In the vast majority of them, the numbers given are exaggerated and nearly impossible to achieve.
And some of the stories I have heard of how they lock up their deals bothers me. It seems that when they indeed have a good deal it is because they finally snared a dumb homeowner who could be taken advantage of through misinformation. And I am not just talking about the few bad eggs that are in any business. The gurus seem to be teaching pretty questionable tactics as the standard way to wholesale and the sheep are following without thinking.

I have no doubt that very successful and honest and legitimate wholesalers do exist. I fear that they are a VERY VERY small % though and the reality does not even come close to the hype.

Thoughts?

[Jerry Puckett]

Wow. I thought this particular topic had been beaten to death with that Juggernaut of a thread "The truth about wholesaling".

With respect to the OP, who did not direct his questions and opinions towards wholesalers but to rehabbers and land lords; I'd like to answer anyway.

The question, I think, was "what is the reality?". The Reality is that yes, there are quite a few novice (wannabee) wholesalers. Both on BiggerPockets and in any market near you. Every field has it's beginners and it's pros doesn't it? If the beginner doesn't have what it takes, he never makes it to pro. Simple. What I don't really get is why that seems to annoy everyone so much.

I was a newbie wholesaler when I came to BiggerPockets, and fortunately there were plenty of seasoned veterans around for me to learn from. I followed the advice I found freely here and in abundance, and now I run a legitimate business. I am routinely approached by BP folk to either get on my buyers list, or learn what I know.

Originally posted by Jon Holdman:

Wholesaling, in my opinion, is little more than a scam sold to new, want-to-be "investors" by gurus....

I disagree. Wholesaling is a legitimate niche. There are many folks who leave value in their home (money on the table) in order to gain a different sort of value. Time mostly. No licensed agent is going to guarantee a close in 30 days. Many folks just cant wait. Or can't afford the fix up necessary to get Bank approval for a loan...and therefore top dollar.

If you don't think wholesalers are worth a hill of beans...don't work with them. Used car salesmen get a bad rap too, but do you think that keeps them from selling cars? No, plenty of people want what they have. My partner and I did 15 deals last year between us. If I wrote a book explaining what I did and how I did it, would that make me a guru? If I sold the book, would that make it a scam?