To Work Or Not To Work With Wholesalers In House Flips

Many people have had terrible experiences with wholesalers in house flips but are they all the same?

I have to confess that in the many years I have been flipping houses, I have purchased properties from wholesalers. Some of my best deals were sourced from wholesalers. Up to date I still use wholesalers.

When I first started out, I had a hard time differentiating between the good wholesalers and the bad ones. I made my fair share of mistakes and I believed that a majority of the wholesalers were honest people. I wasn’t naïve; I just gave people the benefit of the doubt.

I have met many wholesalers who I wouldn’t think twice about doing business with them. After being in the industry for a while, you get to know who is who in the industry.

Are Wholesalers Simply Misunderstood?

I can tell you for a fact that if you do not have enough money, wholesaling is a great way to get started in house flipping. So why are wholesalers in house flips considered as “bottom feeders”? If you just want to test the waters of real estate investing without investing too much, wholesaling is one way to go about it. You do not need that much commitment and you can at least make some money.

Wholesalers get a bad reputation maybe because they do not take the business seriously or they were not taught correctly or they think wholesaling is a quick way of earning some cash.

Most of the successful house flipping students I have coached started out as wholesalers and perfecting their skills was a logical step towards increasing their earnings.

Many Wholesalers Want To Invest In Other Forms Of Real Estate

Many wholesalers start out as wholesalers because they eventually want to become buy-and-hold or full time real estate investors. While many of them want to venture into other forms of real estate investing, others do not have that ambition. Some of them are content with what they do and they are just not that interested in traditional house flipping.

There Will Always Be A Bad Apple

Many wholesalers are honest people and take the business seriously. But there are a few who do not take the business seriously and use dishonesty to make quick cash. Long term ramifications aren’t really something they care about.

Just like there are many dishonest wholesalers in house flips there are also dishonest house flippers. In every industry, there are dishonest professionals who give the honest ones a bad name.

Is Wholesaling And House Flipping One And The Same Thing?

When you think about it, these two are one and the same thing. One flips a contract, the other buys a house, renovates it and flips it.

I realize that sometimes house flippers can be seen as bottom feeders. Although it upsets me, there are particular kinds of house flippers that give this type of real estate investing a bad name. There are some good house flippers and bad ones; I don’t like it but I understand.

The distaste for wholesalers is a lot deeper though. As long as there are dishonest wholesalers in house flips, they will continue getting a bad rap. However, I wouldn’t advise you to dismiss the idea of using wholesalers. They can be a vital source of house flipping deals provided you find one that is honest and takes the business seriously.

If you’ve come this far, please leave a comment below. I’d love to know what you think about wholesalers and if I’m being completely naïve.

Mike LaCava

I'm a full time real estate investor, proud Dad and husband. My team and I are working to restore communities - one house at a time. House Flipping School is my way of sharing this vision with other investors who want to do good for their community, and make money flipping houses.