The Top 6 Ways Wholesalers NEED to Change How They Do Business
Our friends in real estate often use these names to refer to wholesalers—and you know what? In most cases, they are right.
I am going to tell you up front that a lot of what I am going to say today may come across as harsh, but my intention isn’t to bash anybody. As a man of faith, I have nothing but love for all people. But as an industry, wholesalers have a lot that needs to change.
The truth is, there are several things I see people do in this business that justify the raunchy names they get, and today, it is my goal to shed light on the darkness, so that the wholesale game can change for the better.
In my day-to-day, I interact with a lot of different wholesalers, and I am on a lot of their “buyers” lists, so I experience first hand the best and worst of this industry.
But do you know why there is so much bad talk about it? It is because most wholesalers have terrible habits, and they are hurting the rest of us!
I’m sure you’ve heard the saying “A bad apple spoils the whole bunch,” and it really rings true.
#1- Wholesalers Need to Stop Selling Other People’s Deals at Different Prices
#2- Wholesalers Need to Start Playing by the Rules
#3- Wholesalers Need to Stop Putting Down $0 Earnest Money
#4- Wholesalers Need to Stop Acting Greedy!
#5- Wholesalers Need to Keep Their Buyers in Mind
#6- Wholesalers Need to Keep Their Word
A lot of people think that the only strategy wholesalers use is to get properties under contract and then try and flip that contract by assigning it. I want you to know that is not the only way there is to do it.
My company doesn’t do that at all, and there is a reason for it. What we essentially do is buy the properties outright, meaning we close and actually hold title before we ever sell it to someone else (even though it may be just a few minutes sometimes). I am not saying that you can’t or shouldn’t assign the contract if that is the option is available, but you need to think of what would be best for the “motivated seller.”
The problem is that most wholesalers get a property under contract with the intention of assigning it, but when they can’t find a buyer, they just back out and leave the seller with nothing. If my company is going to tell a seller that we are buying their house, then you better believe that we are following through (unless something very unusual happens).
There is integrity in being a person of your word. Your word is sacred and should be protected. I want to challenge every wholesaler out there to step up their game. People need us to be leaders of integrity, and our industry needs to change.
I know sometimes that doing things the right way isn’t the most convenient; sometimes it’s easy just to fudge a little here or there in order for things to get done in the short term, but if you continue, everything will end in ruin. I promise you.
In order to actually have the capacity to buy the property outright, you may need to partner with someone, find a transactional lender, or use private money. I can lend you a hand with that. In the short term, you probably won’t make as much as you would if you did it the other way. However, if you establish yourself as the guy with great deals, as the guy who is dependable, always does right by people and who isn’t greedy, then very quickly people will be coming to you over your competition. And you’ll be so busy that you won’t know what to do with yourself!
In closing, I want to be very clear: I love wholesaling, and I love wholesalers, and honestly, that’s the very reason why I wrote today’s post. I know a lot of what I said may have come across as harsh, but I only spoke the way I did because I wanted to get your attention. And I’m me : )
From the response I’ve received from my last post, I’m well aware that these are the same complaints other investors have against wholesalers, and these things need to stop.
Our reputation needs to change. Our leadership role must be stepped up. We must lead by example. We must change.
If you are involved in wholesaling in any capacity, I want you to ask yourself, “Do I want to be one of the 90% of wholesalers who deserve labels like the ones written in this article, or do I want to be a part of the other 10% who are truly an asset to every investor they come across?”
When people hear the word “wholesaler,” it’s my desire for people to think of us as professional deal finders who they know they can trust.
It’s time for us to raise our bar. It’s time for us to stand up.
Like Grant Cardone says: Be Great. Nothing else pays.
“The harder you work the nicer the vacation”
– Saul Suarez