Are You A Real Wholesaler? How Many Have You Done?

Question

Hey everyone - I just wrote a post in the BP Blog about how I believe only 1% of "wholesalers" ever do a single deal. This got me thinking - I wonder if anyone is making money and doing wholesale deals?

If you are an actual wholesaler - how many deals have you done? Let us know by replying in this thread - and let us know any advice you can give from your success. Thanks!

Will Barnard · Answer

I have wholesaled many homes here in CA, though, only one in the last 12+ months. Since the market turned tight, and I have built even more funds (mine and private money) than before, I keep everything I can get my hands on and rehab them myself.

When I was wholesaling deals more often, I would make at least $10k per deal and the last year I wholesaled, I made over $90k just from wholesaling alone.

Most "wholesalers" (the 99% you spoke of) don't make money because they dont learn how to properly do it or know what real deals are. There are numerous threads on that topic including what I consider the best wholesale thread on BP which is:
http://www.biggerpockets.com/forums/93/topics/58383-the-truth-about-wholesaling-

Keith Lutz · Answer

Technically these were not wholesaled, because I have my RE License, but deal one I had the intention of.

Deal 1.) Found on Craigslist, I called the wholesaler (actually a rehabber with to much inventory), and he told me to call his RE Agent, because no one responded, so he gave it to him to list on the MLS.  So I brought my Rehabber and showed him the deal.  He bought it through me acting as a buyers agent.  (profit roughly $5,000 after broker gets his cut).  My rehabber will be giving it to me to re-sell after rehab is complete.  Rehabber bought it for 325k, expecting to sell for above 549k.  The wholesaler who sold it bought it for 260k (nice profit for him huh?).  Total time, an hour or two!

Deal 2.) Found on MLS - Proud of this one because I out-maneuvered the other investors & their agents, because I could see that this family wanted to stay in the home through the holidays.  So we won the contract on the terms, not price! 260k, while letting them stay in the property for $1 for 6 months rent.  This was worth more to them than the 270k quick close others offered.  Plus it helped that I played nice with the listing agent.  Total time 3 hours max, profit on first sale $6,000.  Plus resale on back end eventually.

So while I am still trying to get that true wholesale, I thought I would share these stories for new wholesalers wondering whether or not to get a RE License too.

Sharon Vornholt · Answer

Hey Brandon-

I have been investing since 1998, and a full time wholesaler since 2008.  I don't even remember how many I have wholesaled; but it's a bunch. The number of deals you do is always important; there's no doubt about that. But one other figure I worked on the past two years, was getting my wholesale fee up. I think that number is just as important. You can make more doing fewer deals, and it helps keep you from jumping on marginal deals.

I have had a few come my way that I would have normally passed on, but I had a low end buyer looking for those types of houses. So I would put the house under contract and pass it on to him a few days later for $3K-4K.

I have also made $20 on a few, but that is not the norm here where the average price of a SFH is about 140K or so. I looked back at my average wholesale fee a several years ago, and I saw that with the high and the low I was making consistently about $7500 on average, and I decided I wanted to get that up. I made it my goal to try to make 10K on each house. Do I always do that? No. But most of the time I manage to do that.

Having a money goal in mind rather than a "number of houses" goal, made me more focused on the types of properties I should be buying. I also made it a point to really nail down what my buyers wanted me to bring them.

That brings me to one final point; many of my buyers have changed their buying criteria the past few years. We need to be really listening to what they have to say, and be ready to adapt. As the market changes we all have to be ready to change.

Sharon

Gene Hacker · Answer

Kelly P.

That is a great start...beginners luck or not.  The amount of "luck" one has is usually directly proportional to how hard one works.

I like the old saying...the harder I work the luckier I get.

Larry Flanagan · Answer

In 2012 I did 10 @ avg profit of $6,750.  Year before I did 7 @ avg profit of $10,500.  I have 3 pending this year so far with avg profit of $9,000.

I would love to rehab house after house and make $30-40k per deal, but in my market it is very hard to make over $20,000 on a rehab.  So I choose to primarily wholesale because I can make about half that with absolutely $0 at risk (aside from marketing which I spend about $500 to $1000/mo).  Plus I can deal in properties that are not candidates for rehab.

I try to make $10,000 on a wholesale.  If its less than $5,000 I usually don't bother.

Travis Daggett · Answer

Sure, Brandon. I've done eight wholesale deals over the past year or so. As far as making money, every one has been profitable. Some more than others!

Dan Franks · Answer

I am a real wholesaler doing real deals.  Have been doing one per month on average for the past six months.

Some of my deals have been big enough that if they were all that size, I'd be able to do it full time and live better than I am now.  Others have been much smaller.

I do know multiple people doing it in my market full time, and am confident that if someone were in the right market and took the right approach to scaling things up, they could as well.

Brandon Turner · Answer

Brian Stone - Make sure you read this article from the blog. It's perfect.

Don’t Start Wholesaling Until You Read This: Wholesale Advice from a Fix and Flipper

Kelly P. · Answer

I started my wholesaling biz in June 2012 and marketed to absentee owners and probates.  From the first mailing I closed a deal where I netted $37,000 profit (I know - beginner's luck).  Exactly one month later I closed on a SFR and $13,000.  Since that time I have made approximately 8 offers but no deals.  Things dried up from November through early January but calls are beginning to come more frequently now.

Hopefully 2013 will be better!

Robert Jeffords · Answer

Well then I'm pumped to be in the 1%!  I'm a new investor (June 2012) and like many noobs, finances peg me in the wholesaler category right now.  After a couple of months of organizing and getting things in line, I started marketing my business aggressively in August.  We closed our first deal in Octobert and currently have another property under contract that we're trying to wholesale to another investor.  No, the paychecks are not as big as other avenues, but it's a great way to break into the business and build relationships with local investors.  You can't "dabble" in wholesaling.  Say you're going to do it and go do it!  I actually just wrote a blog about Self Talk that could be related as to why so many new wholesalers die off.  Check it out :)

Are You A Real Wholesaler? How Many Have You Done?

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