Don’t Over Complicate Wholesaling: How to Keep it Simple

Don’t Over Complicate Wholesaling: How to Keep it Simple

3 min read
Ken Corsini

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 houses in Metro Atlanta since 2005.

Experience
With over 15 years of experience in the real estate industry, Ken has expanded his original flipping business into multiple independent real estate businesses, including Red Barn Real Estate, with over 180 agents in Metro Atlanta across four offices; Red Barn Construction, a custom home-building company specializing in modern farmhouses across North Atlanta; Red Barn Renovations, a full-service renovation company; Black Oak Mortgage, a direct lending company based in Woodstock, Georgia; and InvestorSumo, a technology company focusing on CRM and data needs for real estate investors.

Having been involved in thousands of transactions and having owned over 800 houses, multiple commercial and multifamily properties, and more, Ken brings a wealth of knowledge and experience to the BiggerPockets community. He has authored over 100 blogs and currently hosts the “Best Deal Ever Show” on the BiggerPockets YouTube channel. He is also the host of the popular Deal Farm Podcast.

Ken is currently writing a book in conjunction with BiggerPockets called “Profit Like the Pros,” scheduled for release in Fall 2020.

He and his wife also run Roc.Star Kids, a non-profit organization focused on the needs of children and families in the fight against childhood cancer. For more information on this very personal cause, check out their story here.

Press
In addition to HGTV and HGTV Magazine, Ken has been featured on The Today Show, People Magazine, The LA Times, Think Realty Magazine (cover), TV Insider, In Touch Weekly, Life and Style Magazine, The Wrap, The Atlanta Journal Constitution, UGA Today, US Chamber of Commerce, PopSugar, Entertainment Magazine, and a number of local periodicals.

Education
Ken has a Business Degree from the University of Georgia and a Masters Degree in Building Construction from Georgia Tech.

Accreditations
Ken is currently licensed as a general contractor (commercial) in the state of Georgia.

Follow
RedBarnHomes.com
Instagram @kencorsini
Twitter @kencorsini
Facebook

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It’s been interesting to watch how many new wholesalers have entered my market just over the last year or so. I’m not really sure what to attribute it to, but there seems to be an influx of guys interested in playing in this space. Don’t get me wrong, I like the fact that there are more people out there uncovering good deals.  That said, it is interesting to watch eager new wholesalers trying to get started, but not necessarily knowing how and where to apply their efforts.

My guess is many new wholesalers are fresh out of a weekend crash course, or perhaps they’ve purchased some coaching and have a checklist of things to do.  Just here in the last week, I met a young student of one of the big real estate coaching organizations out there. I couldn’t help but love his enthusiasm, but was a little surprised at his lack of understanding behind the business (especially considering the hefty price-tag associated with the coaching).

Having seen some of his misconceptions about how to operate as a wholesaler, I thought it would be worthwhile to perhaps clarify a few aspects of this business for other aspiring wholesalers.

Are Joint Venture Agreements Necessary?

My guess is some of the courses out there teach their students to get JV agreements for any potential referral partners or buyers.  While a referral fee agreement may be necessary in some relationships, a typical wholesaler doesn’t need something like this to cover all future transactions with a particular buyer or investor.  As a wholesaler, you are in the business of finding a deal, taking control of it (typically by putting it under contract), and then finding a buyer at a price higher than what you could buy it for.  As such, you are creating income by marking the property up above what you are paying for it. There really isn’t any reason to get universal agreements in place with all of your potential buyers.

In addition, every deal you put together as a wholesaler is going to look a little different. It’s very difficult to put agreements in place up front when the payouts are going to vary from deal to deal.  Personally, I have relationships with other wholesalers in Atlanta and we work out different arrangements on almost every deal.  Sometimes I buy a property from them, sometimes they help sell a property for me.  It’s an ever-changing deal making process that would be very hard to pin down in any sort of one-size-fits-all JV agreement.  That said, there is nothing wrong with outlining specific referrals or commissions on a per-deal basis and putting that in writing (in the purchase contract or a separate referral fee agreement)

Find a Unique Source of Inventory

In attempting to find properties that he could market to me, the aspiring wholesaler mentioned above, found himself an agent and started making offers on the MLS.  In the same way that a blind squirrel occasionally stumbles over a nut, this may produce a property or two worth wholesaling. I explained to him that I (along with numerous other active real estate investors), am already scouring the MLS and probably had the beat on these properties before he did.  I went on to discuss with him the way to really add value to other investors is to find the properties that nobody else is looking at or has access to.

Wholesalers that really make a name for themselves in a given market are the ones who have figured out how to drum up unlisted, unknown properties.  Whether this is working FSBO’s, Craigslist, direct mail, etc., finding the off market properties is the best way to establish yourself as a wholesaler.

Starting out as a wholesaler may seem difficult at first, but it’s one of those businesses that grows and blossoms over time. Every month your buyers list gets a little bigger and so does your knowledge and acumen at finding properties to wholesale.  I would encourage anybody that’s new or just getting into this business to employ the KISS mentality (Keep it simple stupid).  Don’t bog yourself down with unnecessary agreements …. Just get out there and find the deals!

Photo: tlindenbaum