How Can a Real Estate Wholesaler Add Value to Your Investment Portfolio?

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Anyone who invests in real estate has probably heard of real estate wholesalers. A lot of people associate real estate wholesaling with those “We Buy Houses!” signs on the side of the road. But many misconceptions exist about the field itself and the quality of service these organizations provide. So today we’ll address how a real estate wholesaler can add value to your investment portfolio.


Wholesaler 101

Real estate wholesalers serve as a channel for investors to find properties that meet their investing needs and goals. These companies serve as real estate matchmakers for their clients to help them identify off-market properties that match their criteria. Basically, wholesalers help investors get deals they normally wouldn’t find on their own.

Wholesalers do extensive marketing to distressed homeowners and research to generate a list of leads for their clients. Through paid ads, targeted direct mailers, cold calling and door knocking, wholesalers reach reluctant sellers through a variety of channels. Typically these properties sell quickly to help both parties address their financial needs. 

Misconceptions

Some investors have heard a number of misconceptions that we wanted to address. Those “We Buy Houses!” signs and billboards, often plastered throughout economically depressed neighborhoods, represent a certain population in the industry. But there is so much more to real estate wholesaling than meets the eye.

  1. I can do this myself. I don’t need a wholesaler.
    Sure, in theory anyone can do real estate wholesaling. They just need tens of thousands of dollars each month to shovel into marketing for at least six months. Oh, and they need to be excited about talking to 15-20 sellers for one potential deal.

  2. The wholesale real estate is only meant for flippers.
    A number of investors of wholesale real estate do flip houses, but the majority use these as long-term investment properties. A number of GC Realty clients own rental homes they purchased through wholesalers.

  3. Only new investors need to work with wholesalers.
    Wholesale real estate can be a good entry point for new investors, but plenty of seasoned investors use wholesalers, too.

  4. A wholesaler should find me a bunch of new properties right away.
    Sure, in theory it’s possible to add a dozen new properties to your portfolio in the first year. But in actuality getting the timing and fit right limits what’s reasonable. A good wholesaler partner should help you close on one property a year.

What to Look for in a Real Estate Wholesaler Company

A good real estate wholesaler will be honest and transparent. Reputable wholesalers will contract directly with the seller. They pull title searches to avoid surprises like back taxes and mortgage issues for the buyers. Many will also cover closings and inspections for their clients as well.

Like any business venture, as an investor you should do due diligence before agreeing to partner with someone.A few sample questions to ask a wholesaler to ensure they understand the field include: 

  • How long have you been in business? 
  • How many deals have you closed? 
  • What are your biggest challenges? 
  • Do you do joint ventures?

The right real estate wholesalers can add value to your real estate investment portfolio. If you’re thinking of working with a real estate wholesaler, contact us at GC Realty! We’ll give you solid advice on what else to look for in a quality real estate wholesaler. Or if you want, we’ll hook you up with a few companies we trust to build our own portfolios.

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