Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
So after a great discussion with Ryan Webber (who is THE MAN btw, THANKS RYAN!!!), I've picked my basic areas of town that I'm going to target. Now I'm going to do some research on my own, but I also plan on utilizing RE agents in the area who know the neighborhoods way better than me. The question is, as a wholesaler what incentive do I offer them in return for their knowledge of the area/mls data? I was thinking of telling them that I'll be dealing with FSBO's on a regular basis and I could pass on any deals that don't work, to them. I don't know if that's offering too much or too little. Or maybe I'm going at this from the wrong angle. Would love to hear any suggestions you all might have...
Real Estate Investor · St. Louis, MO · Member since 2008 · 443 posts · 91 votes
16y
To be honest I have never heard of a wholesaler that has build and kept up a long term relationship with real estate agents, the agents always move on because we don’t have much to offer them. The only time I have seen this work is if you focus on reos and give them ton of business. Bottom line if you plan to make any money wholesaling you need to become the expert and get access to the mls somehow or realquest. your agent will get tired of pulling comps very quickly. If your going to do any amount of deals each month you will have to have tons of leads which would mean them spending a ton of time pulling comps.
Rental Property Investor · Baltimore, MD · Member since 2009 · 624 posts · 559 votes
16y
One of the most critical things in my opinion is to find one maybe two agents to work with and then work with them.
You may experience that many agents just don't understand what investors are all about so finding them may be a challenge.
Once you find one who looks promising be up front with them about what you are doing. Don't try to hide it. They will find out.
Remember that one of things you are offering them that they get paid when they help you get a deal under contract and then it goes to closing.
With that being said, truly the only thing that is going to convince an agent that you are for real is when you get one or more deals done... that means the deals you put under contract have to be deals and you have to prove you can get them closed.
Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
16y
Hey Peter,
I appreciate your response. As a wholesaler I plan on finding properties that aren't on the MLS, at least to begin with. Down the road I'd like to get into REO's but I just don't have the funds to make strong offers in that area right now. Are you suggesting there are properties marketed by RE agents that I could close on with a small earnest money deposit and still assign that contract to my investors? If so, then I'd be very interested in. I was under the impression that that scenario doesn't happen.
I'm really looking for a RE agent that can help me break down the area I'm looking in. The particular hood I'm talking about is known for having young professionals on one block, and only a couple blocks away being filled with a really shady crowd. I'm looking to avoid war zones. I'm also interested in some data from the MLS in terms of recent cash sales and # of homes sold in the past year. So that's the info I'm looking for from these RE agents, at least in the beginning. I just want to offer some incentive for these RE agents so they don't feel their time is being wasted...
Real Estate Investor · North Carolina · Member since 2008 · 1k+ posts · 483 votes
16y
Try finding a young agent just starting out and offer to grow with him/her. But unfortunately they may not last in this business.
I find most agents are nothing more than 'order takers' or 'middlemen' who still consider something less than tax value to be a deal. The last few deals I did with agents were things I brought to them (REOs I found) because these were deals I couldn't do privately.
At this stage of your career you are probably going to have to invest a lot actual shoe leather on the pavement of your targeted farm area and in the courthouse tracking down the info you need.
The good news with that is if this area turns 'hot' you will be ahead of the curve with your knowledge.
Real Estate Investor · St. Louis, MO · Member since 2008 · 443 posts · 91 votes
16y
To be honest I have never heard of a wholesaler that has build and kept up a long term relationship with real estate agents, the agents always move on because we don’t have much to offer them. The only time I have seen this work is if you focus on reos and give them ton of business. Bottom line if you plan to make any money wholesaling you need to become the expert and get access to the mls somehow or realquest. your agent will get tired of pulling comps very quickly. If your going to do any amount of deals each month you will have to have tons of leads which would mean them spending a ton of time pulling comps.
Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
16y
I just got off the phone with a very knowledgeable, nice guy who is a RE agent in my farm area. He knows the area inside and out and has been working it for years. Works almost exclusively with investors and off the top of his head named six properties which he recently sold to cash buyers. He said he's also an investor in the area, but not a cash buyer and doesn't buy very often and not a rehabber.
He seemed 100% ready to work with me on a regular basis and said he works 7 days a week and to call him anytime I want. I'm very skeptical after all the posts I've read on BP, but this sounds like a promising relationship. Is it worth pursuing?
Real Estate Investor · Dallas, TX · Member since 2008 · 148 posts · 50 votes
16y
Originally posted by Sage Jankowitz:
(This agent) knows the area inside and out and has been working it for years. Works almost exclusively with investors
He said he's also an investor in the area,
He seemed 100% ready to work with me
YES! You found the right guy to start with.
After reading some of the previous posts, it is obvious everyone works their wholesaling business differently. Some people don't work well with agents, for what ever the reason. But...
Agents are a great tool for your wholesaling business. It will take 1 deal with a good one and you will see the benefits.
I think Peter's post is your best advice. Find 1 or 2 good agents with investor buyers/sellers or maybe they are an investor themselves and understand your part in the process as a wholesaler. But look for experience in your contacts.
These type agents are not your typical 'I do tons of listings - my picture on my sign -and drive people around all weekend' agent. You want a DEALMAKER that talks REOs, FSBO, wholesale, low-ball offers, all cash closes...etc.
They are out there but you have to get past the 2500 Keller Williams first-year newbies to get to the 'Investor Based' agents. Try your local Real Estate investment club, always a couple guys at any meeting.
Also, here a trick that works in my market (Texas) for getting access to MLS data from an agent. Once you get a good relationship with an agent, ask him if you can become an Agent's Assistant and file this with his local MLS service. It is free to the agent after a small sign up fee. This will allow you to access MLS and walk properties, using his license and without him with you.
This is a very easy process but MOST agents are not comfortable with the program unless they know and trust the assistant wanna-be. Basically, they lose their license if you screw up.
Good luck and by the way...I was a wholesaler for 3 years before I got my license. I've been an Realtor in Dallas TX since 2004 as well as full-time wholesaler as well as buyer/seller. As you become successful and gain experience, you may find that becoming an agent will help your business grow. I'm always trying to add better TOOLS to my investor toolbox. Using agents and having a license is part of my business.
What I do is to use them for all the purchases and sales I do through the mls. Believe me, there are deals on the mls, you just have to look for them.
Also, I like to retail when I sell, so often sell through the mls.
When I buy or sell something that was never listed and the agent never worked on with me, I pay my agent $500 to do the paperwork and oversee the escrow.
By the way, I make it my business to know my work area intimately, so I know without checking whether a deal is good or not.
I keep track of asking prices and see how fast houses sell. Most of the local sales information is free from various brokers, the local news, and the internet.
About the only thing I can't do without help is to check the actual sales prices to do comps. Once I have the figures, I do my own visual inspection of the property that sold for that price. The price means nothing unless you see what exactly sold for that price.
Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
16y
Great advice Kyle and PNW. I plan on walking my farm area a ton next week, but it's always good to have another set of eyes working for me. Sounds like there's some potential here for a fantastic relationship.
One question Kyle. As a RE agent assistant am I required to do anything for the brokerage? Obviously there is a fee for MLS access, but do I have to pay the broker a monthly fee? Do I need to take any of the continuing education classes that regular agents take? Or is there absolutely no obligation and I simply pay my annual MLS fee?
I also like the idea of paying my agent a $500 fee for all the paperwork in FSBO situations. It seems like a win-win situation which keeps everyone happy.
Real Estate Investor · Dallas, TX · Member since 2008 · 148 posts · 50 votes
16y
Sage,
As I mentioned, my experience is for the Texas market and the rules only apply here.
In my market , the RE assistant is the agent's assistant whom he is signed up through. The assistant is only required to do things that he and his direct agent specify.
Neither the agent's broker nor the local MLS association will require anything from the assistant. More than the previously mentioned sign-up forms and fees.
As for any education, the MLS association will require 1 or 2 entry level courses. I believe the first 1 is a software class on using the MLS service. Good info. (Cost $35 or so.)
I hope this helps. Call your local MLS service and ask for customer service. They can tell you if your area has any programs that might work.
Real Estate Investor · West Palm Beach, FL · Member since 2009 · 33 posts · 2 votes
16y
Sage,
My partner is actually a realtor but we started out because I told him if he helped me out I would use him as my buyers agent on my deals and if he would submit the contracts for me on deals that the REO agent didn't want to deal with other realtors I would pay him a consulting fee from my LLC.
It all worked out because now we are partners and we work great together.
Real Estate Investor · West Palm Beach, FL · Member since 2009 · 33 posts · 2 votes
16y
Good Luck, it turned out well for us. We are working on my wholesale deals and a few rehabs of our own. Let me know if you have any more questions. Im always available.
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
16y
To do a wholesale deal, let's say you will probably talk to about 30 pre-qualified people who want to sell their house. About 25 of those will be motivated but won't have enough equity to sell you the house at the discount you require. About 4 of them will have the equity but not be motivated enough to sell at such a discount. 1 will be motivated and have enough equity.
Now let's look at realtors. Realtors are looking for people who want to sell their house. You will roughly have 29 people who aren't going to sell to you that want to sell their house. Any good realtor should be able to pull at least a couple listings a month out of those warm leads. Even if you only refer the ones you know don't have the equity to take your offer, your realtor should be able to get several listings off of them.
Bellevue, WA · Member since 2008 · 156 posts · 57 votes
16y
Sage,
The fact that you are asking the question puts you on the right path. It's important to make sure all your relationships are winners for both sides.
My suggestion [and you've received good advice before my post] is to ask the agent. Lay out what you want to do and ask them what would make it a win-win for them. Ryan is right, the leads themselves, once you've proven an ability to accurately assess things, are worth a lot.
Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
16y
Brad, Ryan, and Steve: Thanks for your input!
I'm going to start heavily scouting my farm areas next week so I have a better idea of the neighborhoods. I'm then going to reconnect with this agent and tell him exactly what I'm looking for and further explain my intentions. (he already knows what I'm doing, but he doesn't know the EXACT areas/criteria I'm looking in.)
Hopefully we can create a win-win situations here...