Why Do Rehabbers Buy from Wholesalers?

​
​Houses in good condition are listed on the MLS and sold to traditional buyers.  However, wholesale properties are places that need work and are purchased at a discount.

Why Do Rehabbers Buy from Wholesalers?
By Pierre Mouchette | RPE BITS

The concept of buying wholesale is not new.  It has been around for thousands of years and applies to almost every business.  In real estate, the same principle applies.  Houses in good condition are listed on the MLS.  They are sold to traditional buyers with traditional financing and are referred to as retail properties.  However, homes that need work and are purchased from motivated sellers at a discount are referred to as wholesale properties.
 
Like other types of businesses, some specialize in wholesaling properties, and others specialize in rehabbing properties.  Rehabbers (investors that intend to fix up and sell property retail) often get their deals directly from wholesalers instead of trying to find a deal on their own.
 
People unfamiliar with buying wholesale often wonder why a rehabber would want to buy from a wholesaler.  Again, it is no different from any other business.  It all comes down to four simple factors:

• Convenience - when rehabbers work with wholesalers, they do not have to do any marketing to find deals.  They are already found, negotiated, and tied up.  It takes time, perseverance, and unique skills to tie up good deals at a discount repeatedly.
• Specialization - the wholesaler provides specialized expertise, including marketing, negotiating, and contract knowledge.  Rehabbers do not always have experience in these things.
• Volume - rehabbers understand that the more wholesalers they work with, the greater the deals they can do.  Even two or three wholesalers can provide a rehabber with enough deals to keep them extremely busy.  The wholesaler leverages their efforts by working with many rehabbers.
• Price - deals can be delivered to the rehabber cheaper than if the rehabber had found the deal themselves.  Even if a rehabber does pay a bit more to get a deal, many are willing to pay a bit more for the convenience, specialization, and volume that the wholesaler provides.

If you are a rehabber looking for more deals, try to find and work with more wholesalers.  Instead of seeing wholesalers as competition, start seeing them as your partners.  In time, you will do more business than you could on your own.