Is Wholesaling Ethical?

I am learning a lot about wholesaling and it sounds like a great way to make some money with a little bit of hustle, sales, and little upfront cash. However, is it an ethical approach?

It appears to me that you are knowingly ripping off people who desperately need that money due to their distressed position. It seems that you are taking the money from desperate people and putting it in your own pocket. Is this how others see it?

Or do you see it similar to a stockbroker format where there is a buyer price and seller price and the middleman deserves the spread due to the extra work they put in to get the deal done and making the process FAR easier than it otherwise would’ve been? Would love to hear some thoughts on this.

 

I'm curious what others say, but I agree with your sentiment. The difference between a stockbroker and wholesaler is that stockbrokers usually deal with sophisticated investors who are somewhat removed from what they invest in. While wholesaling usually involves a cash strapped owner who is letting go of a personal home or property that may have sentimental value. If the owner realizes you're making a profit by retrading the paper (especially given their financial position) you'll have to manage their expectations while not hitting a nerve.

There are two Youtube videos that helped me shed some light on this a few years back, both by the same guy: Phil Pustejovsky - "Is Wholesaling Real Estate Ethical?" and "What They Don't Tell You About Wholesaling Houses". I hope this helps :D

 
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