⚠️ Hot Take: Are Wholesalers Ethically Failing Newbie Investors?

This is a 🔥 convo and I’m glad someone brought it up.

As a wholesaler, I’ve seen both sides. Yeah, it’s tempting to push a deal with a big markup when you know the buyer’s fresh off a weekend seminar and doesn’t fully understand ARV or rehab costs. But let’s be real, that’s short-term thinking.

I’m in this to build a real business.

Do I think buyers should do their own due diligence? Absolutely. But if I knowingly market an overpriced deal and someone gets burned, that’s on me too. That reputation sticks and it spreads fast.

Instead, here’s what I try to focus on:

✅ Run legit comps and price deals fairly
✅ Be transparent with new buyers, even if it means they don’t buy yet
✅ Play the long game and build trust

I’d rather have repeat buyers who know I bring real value than make a quick $30K and never hear from them again.

We all want to win but if we want this industry to last, we’ve gotta do better.

Curious how others handle this... 

Let’s be real — some folks are out here banking on newbies not knowing any better.
If your whole hustle depends on buyers who can’t comp or ask the right questions… is that really a business or just finessing? 🤔
We gotta do better.

We started Prestigious Acquisitions to help address some of the inconsistencies seen by both sellers and buyers from Wholesalers.  We continue to emphasize and try to set a new ethical standard for achieving win/win for all parties involved.  

Part of our approach is to work more exclusively with specific buyers who have been vetted.

​@darren.anderson I love that. It’s been a tough sell convincing some of my old friends and family, “no, I think some of these wholesalers are genuine, I think a lot of them really want to do good and make money at the same time.” The way some people talk about providing liquidity to people in bad circumstances, rebuilding communities, and doing legit business with the home owners and the investors really gives me hope, and I want to believe them.

I’m a huge softy, and the “ruthless salesman” archetype I see pushed a lot on Instagram and elsewhere really bums me out sometimes.

Good on you, I really really hope that the emphasis you put on respectful, ethical business makes you extremely successful.

Hello everyone,

After spending time in the market as both a real estate investor and construction professional, I’ve noticed a significant rise in wholesalers who lack a strong understanding of the housing market and renovation process. Unfortunately, this often leads to poor negotiation skills — accepting seller numbers without pushback and simply adding their own markup. Many of these numbers make little sense and are disconnected from the reality of how an experienced investor analyzes a deal to profit from a fix-and-flip or buy-and-hold strategy.

Lately, it seems that many wholesalers — especially newer ones — are more focused on building up a portfolio of properties to market, rather than understanding the fundamentals of the deals themselves. As a result, they're selling to desperate, eager, or inexperienced investors who may not yet know what to look for. This approach is hurting the market, including both serious investors and quality wholesalers who understand the business and do things the right way.

Personally, I’m exhausted from dealing with wholesalers who have no real background or field experience — many of whom have been influenced by YouTube or Instagram “gurus” promising $40–50K assignment fees and selling subscriptions or courses on how to get rich quick. Even seasoned wholesalers are being affected by the flood of these new players entering the market without real training or understanding.

As an investor, I’ve started to shift my strategy — working more closely with real estate agents, fellow investors, and even hunting down deals on my own, which often takes more time but gives me greater control and clarity.

I have no problem paying a wholesaler’s fee — and have done so many times — as long as the deal allows me to make a fair profit. But when wholesalers can’t negotiate properly and allow sellers to control the pricing, it’s the investor who ends up carrying all the risk: closing costs (both buying and selling), high hard money interest rates, and renovation execution.

In an off-market deal, negotiation is everything. It’s one of the most valuable skills a wholesaler can bring to the table. And believe me — when an investor sees that kind of value, they’ll happily pay for it, wholeheartedly.

Hey ​@danielrallo, I'd love to hear your opinion on the topic. Jump in and share it with us!

At the end of the day, transparency should be the baseline. Wholesalers aren’t responsible for a buyer’s due diligence, but intentionally overselling to the uninformed crosses an ethical line. It's one thing to price aggressively in a competitive market; it's another to knowingly take advantage of inexperience.

Smart business doesn’t have to mean shady business. The best wholesalers build long-term trust, not just short-term profits. Let’s raise the bar.

🔥 Let’s talk truth. I’ve seen both sides of this—and I believe we owe it to the next wave of investors to do better.

👉 Yes, buyers have a responsibility to learn. 👉 But wholesalers have a responsibility not to exploit that learning curve.

When a deal is hyped with flashy margins and sold to someone who just stepped out of a seminar—armed with optimism and buzzwords—it doesn’t just hurt that buyer. It hurts the industry’s credibility and poisons long-term trust.

We’re in a business built on numbers, yes—but also relationships, accountability, and reputation.

So no, business isn’t just business when you knowingly pass off a bad deal to someone who doesn’t yet know how to push back. That’s not sharp strategy. That’s short-term gain at long-term cost.

✅ Let’s elevate the game. ✅ Let’s educate and empower, not prey on potential. ✅ Let’s celebrate those who win through transparency—not manipulation.

Because when the rising tide lifts all ships, no one needs to sink to win.

My business partner and I are located in San Diego.  We work “on market” properties, so building good relationships with listing agents is crucial.  We negotiate a fair deal with the seller and open escrow under our company with CLEAR wording in our purchase contract that we will be assigning the escrow.  We are very experienced about our purchase price, our rehab budgets and our ARVs. 

When we assign our escrows we give all interested buyers a certain day to come walk the property, we encourage them to bring their contractors and anyone else that would need to sign off on the assignment.  And let me tell you, even though San Diego is a big county, the top wholesalers and flippers know everyone.  Realtors know who they’ve been burned by. Everyone knows everyone here and can name who they will and won’t do business with, who is honest and markets spot on deals and who is shady.  

When my business partner and I market a deal to assign we get almost 100% response rate because we’ve built up a good reputation.  I couldn’t imagine passing off a bad deal to someone who doesn’t know what they’re doing and is inexperienced, much less even market a deal that isn’t truly a deal.  You never know who will start recognizing your name and if you have bad business practices by taking advantage of buyers it will catch up to you.

​@MichelleMcCormickHomes Thanks for sharing this! It’s clear your reputation and clarity in deals play a huge role in your success.
Curious - have you ever had to walk away from a listing agent or buyer because their practices didn’t align with your standards? How do you handle that without damaging your relationships in such a tightly networked market like San Diego?

Interesting conversation. I have just never encountered a situation where even if I wanted to I could successfully just market up the price to something way over ARV (which is subjective - 3 different investors will come up with 3 different numbers!). I have the opposite occur far more often, even when it seems to be a good deal. 

Buyers set the price by what they are willing to pay, not really any different whether a wholesaler or an on-market realtor asks a ridiculously high price, if it is over-priced it doesn't move - cancelled wholesale contract or expired listing, both bad outcomes for the seller due to incompetence. As for the investor, unless they are self-funding the purchase there are other guard rails when they go to get private or hard money if the numbers don't pencil out. Really curious where this is happening.