What does a wholesaler network actually share? Just buyer lists?

Question

I'm building a buyer list right now, about 40 names, mostly from county records and a couple of local meetups. Someone in a group chat invited me into what they called a micro-wholesaler network and said everyone shares their buyers.

That sounded great and also slightly alarming? If I hand over 40 names I spent months collecting, what stops someone from working those buyers without me. And is buyer sharing the whole thing or is there more to it. The person who invited me kept saying "deal flow" like it was obvious what that means.

Rena Guide · Accepted Answer

Buyer sharing is one piece. The other pieces matter as much.

Start with the terms. A wholesaler puts a property under contract with a seller, then assigns that contract to an end buyer for a fee. The fee is the difference between what you agreed to pay the seller and what the buyer pays you for the right to step into your contract. Deal flow just means the steady stream of possible deals coming at you, how many sellers you're talking to in a month.

A micro-wholesaler network is a group of small operators, often part-time, who pool things so each of them closes more contracts than they would alone. The four things that actually move around are buyers, leads, referrals, and knowledge. Referrals are the underrated one. Say you lock up a rural property with a big lot and none of your 40 buyers wants it. A member whose buyers all want exactly that gets it sold, and you split the assignment fee, often 50/50. You got paid on a deal that would have died.

Knowledge sharing is the fourth. Wholesaling rules vary by state, some states have added registration or disclosure requirements for assignments, and a group that talks about that regularly catches problems an isolated person misses. Confirm anything specific with an attorney licensed where you're working.

On your worry about handing over 40 names: most working groups don't hand over raw lists at all. They pass a deal to the member who has the buyer, and that member keeps the relationship. If the group is asking you to upload your contacts on day one, that's a different arrangement than the one being described to you, and it's fair to ask which one it is before you join.

nataliehsu · Answer

The distinction @rena-guide draws between sharing a list and sharing a deal is the whole thing. I've been circling this industry trying to work out where I fit, and the groups I've looked at that ask for the list upfront tend to be selling something else, coaching usually, 300 a month or so.

derekj19 · Answer

Do these networks ever formalize the split? Like an actual one-page agreement saying who gets what on a referred deal, or is it all handshake?

tonyv88 · Answer

@beacon in the ones I've seen described it's a short written JV agreement per deal, naming both parties and the split, signed before the assignment goes to title. Handshake works right up until a fee gets big enough to argue about. I manage properties and I've watched two people fall out over a 9,000 fee that nobody wrote down.

jordan_ellis2 · Answer

The thing I didn't understand until this thread is that the referral half is where a beginner has value. I have almost no buyers. I do have time to talk to sellers. That's a trade someone might want.

gregpowell66 · Answer

@pike careful with that though. The member with the buyers is doing the part that actually closes. If you bring a contract at a price no buyer will pay, nobody in the network can save it, and you've burned goodwill twice, once with the seller and once with the group. Learning what a rehab actually costs in your area is the part that makes your contracts assignable.

carlos_nunez · Answer

@girder is right and I'd add the ugly version. Deals get referred around and around because the price is wrong, and by the time it reaches the fifth person the seller has been sitting for three weeks with no communication. Networks are only as good as whoever is willing to call the seller back and say the number doesn't work.

What does a wholesaler network actually share? Just buyer lists?

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