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Should I buy real estate from a wholesaler
Should sellers work with a real estate wholesaler?
Wholesaling real estate is the practice of acquiring properties at discounted prices and reselling them for profit. A real estate wholesaler enters a contract with a property seller, markets it to potential buyers, and assigns the contract to the most appropriate buyer
On the internet I found the 15 reasons to be a real estate wholesaler.
1. Fast Entry (Great For The Beginner)
2. Simple To Learn
3. Quick Results & Quick Cash
4. No Cash Or Credit Required
5. Location Independent
6. Valuable Experience
7. High Demand
8. Larger Paychecks
9. High Return On Investment
10. Ability To Work With Bird Dogs Or Deal Scouts
11. No Need To List Properties
12. No Membership Charges
13. Volume Potential
14. Minimal Risk
15. No Repairs Involved
This morning I was watching TV and saw a 30 minute show hosted by Superman, actor Dean Cain. He told us about an opportunity to phone to get a reservation for a two hour live seminar about real estate Wholesaling and financial independence with no money. Stop living paycheck to paycheck. You owe it to yourself and your family. Anybody can do this program. Phone to get 4 VIP tickets and get the investor toolbox. What do I have to lose? I can get some free gifts.
The TV commercial has a disclaimer at the bottom that said “The student success herein are not typical”.
I Found a wholesaler online that said
“Honestly there aren’t much benefits to selling to a wholesaler. I am a wholesaler and I will admit that…”
“However, I market to find people that have a strong desire to sell.. If you are marketing and you get a “tire kicker” who wants full retail or more for there house its going to be near impossible to make a deal out of it… especially with the housing market being so hot. Yea I do let the seller know I pay cash which saves fees and I close fast and such, but deals come from problems… find out the problem and why they want to sell and base your whole pitch off how selling to you solves those problems.”
Are you looking for a good deal. You may need to drive to one hundred properties.
Good deals require a distressed seller as result of death, disease or divorce. (Maybe, sometimes)
It is more likely that you will find a fair deal to add value
If you consider buying from a wholesaler, then ASK this …
Do you believe the wholesaler financial numbers?
Do you have the right to inspect and the unrestricted right to terminate , even if the sky is blue … and get your earnest money refunded.
Can you include all the inspectors you choose including
• Building inspector
• Mold inspectors
• Pest and termite control
• Hydrostatic plumbing inspector
• Environmental consultants who may recommend soil testing
• Asbestos sample testing.
Are the inspectors limited to specific hours or specific days?
Is seller required to turn on all utilities?
You might also lose your earnest money and inspection money and acquisition costs due to
Banks and government regulations and changes to policy changes by changing personnel which causes snakes to delay the closing date. Do you lose the earnest money if you can not extend the closing date due to an unknown undisclosed competing signed backup contract at a higher price?
(hint … I have a cure to this potential problem.)
Will the lender require additional due diligence documentation from the true legal current owner? Can that seller provide the additional required docs?
Is the contract with wholesaler promulgated and approved by the Texas Real Estate Commission or Texas Association of Realtors? Or must you pay an attorney to review the contract.
If the title company finds a cloud to the seller’s title or the title company will not remove an exception to the title insurance, can the buyer get refund of earnest money?
How long is the wholesaler contract with the seller?
What is their final closing date?
Can their contract and your contract be extended if the buyer needs more time …. Due to lender problems?
Will the earnest money show up on the final closing statement?
Who pays closing costs – you or wholesales or current owner/seller?
Is there an entity transfer like a corporation or LLC? Do you, the buyer, inherit the unknown debt or judgements?
As a seller
How do you know if the buyer is a wholesaler?
Is the buyer a licensed real estate agent or broker?
Are you getting the highest and best price or is wholesaler marking up the price to flip to another higher price buyer?
How long is the contract period?
Does the wholesaler get a free look or have skin in the game?
Will the wholesaler and their buyers …. disturb the tenants?
Will the wholesaler taint the property reputation with a failed contract?
There are now people who sell seminars on How to be a wholesaler.
I noticed YouTube has numerous seminars hosted by wholesaler gurus and mentors
Because this is a new recent trend, does the wholesaler have experience to know how to solve problems and kill snakes.