Wholesaler Inquiries on the Rise?

Question

We've held investment property in the Kansas City area for 15+ years and have always gotten the occasional call or mailer from those wanting to buy our properties. Over the last three months or so I've seen a huge increase in the inquiries - multiple calls and texts every week and a big increase in mailers too. Wondering what is up with the sudden flood of inquiries. Also, any tips on how to make them stop? Even my kids are getting the calls. :(

Will Barnard · Answer

This is the product of a bunch of years run up in the market, too many people watching HGTV shows and think it is so easy, and the gurus selling their BS programs suggesting to newbies to start wholesaling as their first go at investing since it can be done with no money, no credit, no brains, and no skills.

You are now seeing and receiving the product of these circumstances first hand, good luck stopping it yourself, only a nice stiff market correction sending many to the poor house will stop it for a bit, then the cycle will repeat again.

Don Konipol · Answer

@D Bazzel

Some recently organized, venture capital backed companies have gotten into the field of purchasing SFR direct from owners, and reselling to either occupants or investors.  They look to take in the amount of would be brokerage commission, a discount for time value of a quick close, the discount for a no hassle sales process, a mortgage brokerage commission on the resell, and possibly in house title agency fees.  I’m getting about three contacts per week per property

Lydia R. · Answer

@D Bazzel the other people who have responded have done a pretty good job of explaining why the sudden increase in contact over the property. The best thing you can do to decrease the number of calls is to obscure the ownership information. Put the property in a trust or a holding company. If your name is listed as the owner then anyone who is mailing to or calling absentee owners (which is a very popular lead category with the late night gurus) can and will find your information and contact you. Its unfortunate but true.

Mike Nuss · Answer

@Jay Hinrichs "Not so much from the how to wholesale beginners who are really just trying to tie up property to flip contracts but I see them taking properties from normal listing channels."

Well stated.

My thoughts exactly. The Zillows, Open Doors and such are not competition in the high cost renovation "value add" properties that make the best investments. They're competition for listing agents, by grabbing the people that are okay with a small discount for lack of headache. Those sellers aren't the type of sellers we have historically purchased from.

Jay Hinrichs · Answer

YUP they are strong in Vegas..  and I am getting them in Portland on a home I would never expect them to call on..  7 figure property.

we always get them for the rental product around the country.. probably 3 to 5 a day.. since we are no debt.. we get on those lists of high equity.. or we get the HEY we see your a cash buyer you want on our list  LOL..

I went ahead and punched in the info on our Vegas Townhouse into I think it was offer pad.. automated offer was what we paid for it 3 years ago and prior to 100k rehab..  On my home here in Lake Oswego its been robo calls  .. that then get handed over to the closer.. although these were just run of the mill wholesalers .. but going after big ticket homes..  which is somewhat of a departure.. same thing though guy on the phone telling me my 7 figure home is only worth 700k  so 550k is a strong offer yada yada yada..  All is fair in this game.. but I do see the big wall street backed players having some disruption.. Not so much from the how to wholesale beginners who are really just trying to tie up property to flip contracts but I see them taking properties from normal listing channels.

But we also have brokers that advertise if I cant sell your home in 60 days I will buy it.. now that has calmed down some now that the market is slowed down and prices have basically neutralized here in Oregon..

But for mid west rental stock its incessant inquires when one wholesaler flames out when they realize this is very tough.. 5 take their place..

Kim Tucker · Answer

There is a circle of service provider for wholesalers:  website providers, list providers, robo call providers, cold call providers, databases managers, direct mail providers - they all have podcasts and they all invite their friends in this circle to be on these podcasts and webinars and the like,  They are also have conventions - and they are all referring themselves and telling everyone they need to scale up, that you need to spend $10,000 a month on marketing (if you use all these tools yes you do) so you can get very rich in this business.

Sorry to break the bubble folks, figure out how to do deals, figure out what a good deal is and focus on good deals.  Even as a wholesaler you can make a good living selling 5 to 10 quailty wholesales rather than spinning your wheels and spending $10k a month to do 10 very poor (think $1k to $3k profits) every month  Yes you make a lot of money but they put in a lot of time and money to get those marginal deals.

So now that all these get rich wanabes are out there pumping money into the marketing, EVERYONE has to pump more money and effort into the marketing to get more deals.

Sora hoping the bottom falls out so all these wanabes go back to their day job and we have less competition - And sadly many of these wanabes are paying way too much for a property, can't get the deal closed, and then giving our industry a bad name.

May Emery · Answer

Too many real estate investors have been told that the best list to use is Absentee Owners. This is yet another example of why people need to work with list brokers to find some newer motivated owner occupied lists - so they aren't competing against the multitudes following the same set of instructions.

Most ethical list compilers will suppress their files against the Direct Marketing Association Do-not-mail list. This might help cut down the number you are getting. Google dma mail preference service and choose Register DMA Choice. https://thedma.org/accountability/dma-choice/

Pratik P. · Answer

We do lots of marketing for off-market properties so maybe I can help. Like Lydia said, see if you can obscure the ownership by putting your properties into an LLC or Trust. We don't market to business entities because we assume the owner is an investor themselves. Also, those are hard to skip trace since there is no actual name. You can also put your number on the DNC registry as marketers scrub their lists against the DNC (they should be anyway). Those two things should slow down the calls/texts. When you do get called, ask to be put on their DNC list. You'll probably still continue to get mail. I personally welcome mail because I like to see how creative people get with their marketing and maybe I can call and see if they have any deals to unload.

Wholesaler Inquiries on the Rise?

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