All Forum Posts by: Account Closed

 #4. What you suggest is factually incorrect. Wholesaler doesn't "get" 100K from end buyer. In fact, wholesaler gets 15K check from titling company, under the terms of the contract assignment. It's not wholesaler who receives $100K, so he can't say "I think I can get 100k". And it's all irrelevant to the objective anyway. Objective being: get seller the amount of dollars he agrees to accept to give up on his property. I would charge one million dollars for each closed deal in assignment fees, IF MARKET CONDITIONS ALLOWED ME. I am the finder and I will charge what I want for doing my work. All parties are free to do their own thing, find end buyers or sellers without using my services. But, it's highly unlikely that I would ever make million bucks on any assignment, unless some seller wanted to gift his million dollar worth home to any buyer for $1 and signed a contract with me. But if I EVER encountered situation like that, make no mistake about it, I WOULD COLLECT MY FAIRLY EARNED $1MIL)) The fact that it will never happen is another subject. What matters is that it's fair and square deal.

#5. Selling contract is exactly what wholesaler can do. No wholesaler can sell a property without first closing on it, simply because wholesaler doesn't own it. So, contract assignment is what you do as a wholesaler. What is the issue with it?

I have researched the topic. Good news: it's still a viable business in MD. The communist law proposed in 2023 to outlaw wholesaling didn't pass. What they passed instead is a 2024 bill which mandates wholesalers to disclose property sellers that they would be assigning their contract to a third party. Which is perfectly fine by me. 

 It's ALL ABOUT NUMBERS. Numbers don't lie, numbers don't pretend, numbers don't care what anyone thinks of you. I personally don't care what some of the folk here thinks of me. I was involved in wholesaling business long time ago (not real estate but consumer goods), and it has taught me A LOT about human nature. There are some good people in business, but there are also nasty, hateful people that will cut your throat for few bucks. Money is what motivates and moves them, and nothing else. They just look after their own good. Disregard them! Just be careful dealing with those types, they are capable of anything for a buck. 

But, as I said above, wholesaling is all about NUMBERS. Know your numbers. Do your due diligence. When you look for property think of it as if you were buying it for yourself. Would you , as an investor or flip-flopper, buy it for what you can sell it for? Would HML lend the money to buy and rehab it? If answer is NO then run from it, don't have anything to do with that property but look for another one. If you find a true wholesale deal, the one you would buy and profit from and HML's are ready to finance it, then you know it's worth getting it under the contract and find an investor for. Be good with your numbers, those are: ARV (based on comps), repair costs and MAO which will allow you to squeeze in your cut in the assignment of the contract. If your numbers are right then nothing else matters.

I agree with you. I also think a lot of tech savvy motivated sellers can do better than selling a contract to a wholesaler. They may easily discover the clubs, investors/end buyers themselves and just sell their property to a highest bidder without sharing proceeds with a wholesaler. It's possible to get some motivated sellers through a website with assistance of SEO , website optimization and PPC, but it's not a basket I would put all my eggs into if I was trying to locate the sellers. 

 100%. It's all about your network. I don't want to sell to investor who hates wholesalers, I don't even want to profit from hatemongers. I would rather not make money than benefit them. And there are those who can source and acquire property of their own, good for them. No need to bring wholesale deals to them.

We are grateful to those who do want to work with and buy from wholesalers. Our ultimate goal is to locate a property that makes sense from investor's point of view, that has verifiable ARV, accurate estimate of repairs and right price for a buyer to profit from it. Let market forces weed out those who are inept and are unable to deliver the right product/service. And let those who want to source and acquire properties on their own do that as well. There are so many off market properties out there that I don't mind end buyers doing all the leg work, going to sellers and closing their own deals.

I know exactly what you mean. When I was eyeing fix-and-flipping, I came across some wholesale listings that had ARV's which didn't quite line up with reality. I will tell you what you CAN do to avoid falling into this trap. First, if you have access to MLS run your own comps! If you don't have access to MLS, ask your trusted RE agent do it for you. Second, even after running comps if you want to be on the safe side contact a local HML. Those guys finance fix-and-flips all day long and will not finance a deal unless it's viable and makes sense to them. Low comps, low chance to resell (cold/cool market), overblown ARV? Forget about HML, they will deny you on the spot. And you will KNOW that's a bad deal, right there and right then. Because no HML will pass an opportunity to profit from a good deal. So, use HML as your guide to property value if you lack experience or are located far away/out of state and can't do comps on your own.

As to property being bought in 22 for 60K and flipped by a wholesaler for 120K, that means nothing on its own. Somebody could gift it to a wholesaler or previous buyer for a dollar and if the property is worth millions dollars in ARV and you get it for 70% of ARV minus your repair costs, then you should pay for it what it's worth. You should not be thinking "Oh Jeez, this wholesaler has such a good time off of this deal, I can't live thinking how happy he will be!". That's not a proper business approach, His earnings/his profits/his luck are his to enjoy. The only thing that you should be concerned with is how hot the market is, what the true ARV is (based on actual comps in the past 90-180 days), and how much they are asking you to pay for the deal. If you are set to make your 30%, or whatever margin you want to make off it, then you are good to go. Think of your business and how the deal profits you, not how much money will seller/wholesaler make.

Good luck! 

1. The problem is with "wholesalers" trying to find a good deal on MLS from REA. 85K on a listed property might be a good deal for the end buyer, but not something worth investing as a flipper. The "wholesaler" will struggle to get a buyer for that house. A good wholesaler in his right mind will look for deals HE would buy as an investor/flipper. Knocking 15K off retail price may not do it. It all depends on ARV, cost of repair, and profit margins for investors. Such a "wholesaler" should be weeded out of the marketplace by failing miserably in what he is doing.

2. I know a lot of industries where abusive calls are commonplace. In fact, I receive a ton of spam calls almost daily but can't recall one from a wholesaler. As noted earlier, calling someone on the DO NOT CALL list is illegal. Anyone who does that, not just a wholesaler, should be dealt with by gov which is obliged to enforce the laws on the books.

3. They are not wholesalers. They are scammers. 

4. When I talk to the seller all I care about is making an offer that makes sense for me to move the inventory. The seller either accepts it or goes on his merry way. I am not obliged to educate or explain anything. Here is your house, and here I am, I think I can get you paid X dollars for that dilapidated junk you are living in. Either take it or leave it, period. I don't have to beg, lie or make up stories. I am not the one trying to get rid of the property, the seller is!

5. Wholesaler can lie all he wants.  If I am an investor buying from him he won't be able to fool me. No one will. I will have my comps, cost of repairs, and market forecasts ready in my hand before I pull the trigger. If a lying wholesaler can fool me then maybe I shouldn't be investing in RE and find some other endeavor where I have a better clue of what I am doing. 

6. I disagree. I don't think we should ban all wholesalers just because some are scammers, criminals, and idiots. market will weed out idiots, and criminals who break the law should be prosecuted by gov. The rest should continue doing business as usual, realtors, wholesalers, flippers, lenders and etc. 

 Speaking of the right expectations: is it unrealistic to find a viable wholesale deal if you call 3-6 warm leads a day (those who reach out to you based on ads you run), spend 3 hours a day cold calling the numbers you skip trace from the list you buy and end up with your first deal in 60-90 days? 

 You are right! I was a prime example of someone who set high expectations when I was young and inexperienced. I was lucky because the first business I ran (which was in reverse logistics/liquidation) turned out to be profitable from day one. I was grossing $1500-$2000 daily with 25% margin on sold goods, so I did well. But I couldn't tell you how many times I was frustrated, heartbroken,  upset, and nervous, because I had higher/unrealistic expectations set and was not prepared to weather the challenges, which were unpredictable to me. Running a business is not for the faint-hearted. And there is no silver platter or smooth path ahead. I welcome your feedback on it. If other newbies are reading this thread they should be aware: nothing will be like in Hollywood movies, business doesn't run like that. You will encounter a lot of people, some good some bad. You will encounter a lot of situations, some very challenging and stressful. There will be days when you will be exasperated and want to quit. Nothing in life comes easy. 

 You can spend as much as you wish on marketing. I have friends and acquaintances who run marketing businesses. If you have $100K a month to spend they will find a way to make use of it. You could spend hundreds of thousands of dollars or even millions per month on your operation if you had a nationwide campaign. But that doesn't mean anything to me, because I am not planning to run commercials on CNN/MSNBC/Fox News at 8 PM. You don't have to spend 15K per month to START your reach out and get your first deal in the next 60 days. You could start with a MINIMAL investment, and spend hundreds of dollars per month if you are intelligent (mean and lean) about it. You can increase your budget once the deals start closing. Thank you for chiming in anyway.