What is a Real Estate Wholesaler?
What is a Real Estate Wholesaler?
Today, I want to talk about wholesalers and wholesaling. I want to explain to you the basic concept of what it is and how it works and whether as a long-term real estate investor you should consider working with wholesalers.
So, a wholesaler is someone they're not necessarily a real estate agent who can go and approach sellers and say hey, a nice house that you have here, I'm working you know on buying properties in your area and I'd like to buy your house for let's just say two hundred thousand dollars, okay and they give the seller a contract for two hundred thousand dollars without the real intention of ever actually closing on that house for two hundred thousand as soon as they get that contract with the seller, the seller agrees to sell it for two hundred thousand the wholesaler goes and they try to find a different buyer who they can assign that contract to they basically find somebody else and say hey I got this great deal this house I think is an incredible property I think fixed up it's worth 300 000 and I'll sell it to you for 220 000 and then what they do is they get the end buyer to buy it for 220 000 the seller still gets their 200 000 and the wholesaler gets their $20,000 fees.
It can be a very lucrative business there are some wholesalers who are extremely successful at what they do and I think there is a niche in the market for what they do and I have bought a property from a wholesaler very very happy with it he got a great fee on the property I got to see on the settlement statement what his fee was and I was still ecstatic. Yes, he got that fee but I got an incredible property at a great price see part of being a real estate investor is it can be very hard to scour and find all the right deals all the time not only can it be hard it can also be expensive you know sometimes people start sending letters and they start sending texts and they start calling by the time you factor in the cost of doing all those things in your time and money.
It can be very hard to find those deals so i say when the opportunity is right it's absolutely okay to let a wholesaler do all the leg work for you and then you are able to still buy a property at a great price and you know but sometimes wholesaling is not right you know so there are some cases where i think wholesalers could do a better job of informing the consumer of what their intentions with the property are because if there was you know a little old lady who could have got 220 from for her house that's why i don't personally wholesale i want to be able to help my clients get 220 if there's an investor out there who wants to pay 220 for it but again i have bought properties from wholesalers and extremely happy with my experience if you're working with an agent and you're thinking about investing in real estate i would absolutely make sure that they're sending you wholesale list opportunities i know here in the Phoenix area as an example i get probably two emails a day it feels like sometimes from wholesalers with whole lists of properties that they're wholesaling sometimes i don't love their numbers you know we gotta vet their numbers and make sure that we agree with what their valuations are but there have been some very good opportunities there.
What does this mean to you? If you're even a little bit interested in learning more about participating in the Phoenix housing market as a seller, buyer, or investor... you NEED to know this stuff! Or at least work with someone who is obsessed with the market stats. Reach out to me today so we can start working on making your real estate dreams a reality!