Is a wholesaling network just a way for people with few buyers to look like they have many

Question

Wholesaling runs on the buyer list. A list of 200 real cash buyers can move almost anything, a list of zero moves nothing. So ten people who each have twelve buyers are not automatically a network with 120 buyers, they are ten small lists standing next to each other. The value depends on whether the buyers are actually shared and vetted. A real network circulates deals to every member's list and tracks which buyers close, which fall through, and which never respond, so the group learns who is real. With that discipline, those ten lists function closer to one list of 120, because a deal that does not fit one member's buyers reaches nine other lists instead of dying. Without it, the group is small operators reassuring each other. The test is simple: ask how many cross-member assignments closed last quarter, not how many buyers are claimed.

Rena Guide · Accepted Answer

The lists don't add up the way you're describing, and @samantha_ruiz named why. Buyer lists are specific. A cash buyer isn't a generic entity who wants any discounted property. They want a particular price band, a particular property type, sometimes a particular street grid. So ten members with twelve buyers each aren't 120 interchangeable buyers, they're 120 narrow appetites, and the value is that a contract that fits none of yours may fit exactly one of theirs.

The count matters less than you'd think. A member with six buyers who have each closed twice this year is worth more than a member with 300 names scraped off a list. The word "buyer list" gets used loosely for both, and the strict version is people who have actually bought and will answer your call.

Where your skepticism holds up: a network of ten people who all work the same three zip codes with the same buyer profile really is close to no network at all. They'll compete for the same sellers and refer deals nobody can place. So the question to ask about any group isn't how many members, it's how different they are from each other.

Something else sits underneath the sharing, which is that the members also pool what they know about compliance. Assignment rules, disclosure requirements, and whether marketing a property you don't own triggers a licensing issue all vary by state, and several states have tightened this. A group that talks about that catches problems earlier than a person working alone. Any specific question there is one for an attorney in your state.

samantha_ruiz · Answer

You're missing that buyer lists aren't interchangeable. My buyers want 3/2s under 180k in two zip codes. A guy 40 minutes away has buyers who only do land and mobiles. Neither of us can sell the other's inventory, so between us we cover twice the ground. That's not pooled inability, it's coverage.

megan_doyle15 · Answer

I'm still figuring all this out, so this thread helps a lot. One thing I'm stuck on, when they say a buyer "answers your call" is that literally a phone call? I assumed this was all email blasts.

luis_carrera · Answer

@megan_doyle15 the email blast is how you find out who's interested. The phone call is how you find out who's actually closing. Different tools.

aaron_fitz10 · Answer

The coverage point changes how this looks strategically. Assuming a 200 name buyer list is needed before doing anything is basically a year of work up front. If ten operators each holding a narrower list plus a working network gets to the same coverage, that's a very different timeline for getting a first deal moving.

brandonlee36 · Answer

@aaron_fitz10 careful, it isn't the same thing. It depends on someone else's relationship, and relationships end. What breaks tends to be visible from one step removed from the person actually writing the check.

tashaford30 · Answer

So the failure mode is that the best referral partner leaves the group and half the dispo capacity vanishes overnight?

omar_haddad · Answer

@tashaford30 yes, and there's a nastier one. Referred deals get repriced. I do renovations and I've seen contracts come through a chain of three wholesalers where every person shaved something, so the end buyer's number is 20k above what the property supports. Then the buyer walks at day 8 of inspection and everyone blames the person upstream.

bmoreno23 · Answer

Coming from a totally different career, the part I can't get my head around is why anyone shares a buyer at all. If my buyer closes with your deal instead of mine, haven't I just given away my only asset.

stephen_ok9 · Answer

@bmoreno23 because your buyer wants volume. Most small cash buyers want more deals than any single wholesaler can bring them. Feeding them from two sources makes you more useful to them, not less.

joe_delgado5 · Answer

@bmoreno23 I work thin margins and the calculation is simple. Half of a fee on a deal I couldn't place is more than all of a fee on a deal that dies. That's it, that's the whole reason.

Is a wholesaling network just a way for people with few buyers to look like they have many

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