RE License or Wholesaling?

Question

I've done some research here on the forums and everyone recommends that getting your license is a good first step. However, the startup costs can be quite expensive and it may take a couple months to get your first paycheck. I have some reserves for this time period, however I'm debating wether to use those start up funds for marketing and start wholesaling (or rehabbing if i can get fully funded, which is highly unlikely).

I recently got laid off and I would prefer to get started in my career in RE investing rather then find another 9-5 job. Your opinions and advice is greatly appreciated.

I recently got laid off and I would prefer to get started in my career in RE investing rather then find another 9-5 job.  Your opinions and advice is greatly appreciated.

Jonathan Guerrero · Answer

Thanks for all the input.

@Dev Horn Thanks for the advice.  Make an offer on your behalf and if they don't agree then I could still list it and sell it on the market.

@Richard C. Good reminder. There is a possibility that I wouldn't get a deal done whereas putting the same effort as an agent could land me paycheck.

Richard C. · Answer

Understand that is entirely possible, and even likely, that if you use those funds to start wholesaling, you will not do any deals and will make nothing.

Whereas if you get a license and put in the hours, you will eventually make money.

James DeRoest · Answer

The problem with being an unlicensed wholesaler is that they are a dime a dozen today. The cost of entry into the the business is $0. I could be a wholesaler tomorrow if I wanted; simply put something under contract and hawk it round buyers. Not particularly difficult.

But in a business where there is no barrier to entry, the competition is high, and right now it's probably higher than its ever been.

My personal advice is to get your license, hang it somewhere and do real estate properly, and that will take time and dedication, and a lot of sacrifice on your behalf.

Don't be seduced by all these get rich quick stories. They ain't all that.

Dev Horn · Answer

Truth is, you can do both, and many successful investors do.  All you have to do as a licensed agent is DISCLOSE to a motivated seller that you are licensed, but acting on your own behalf as an individual buyer of investment properties.  Then, if you find that the seller is simply not interested in your low but quick cash offer, you can offer to list it on the market as a fall-back plan.

Start as a wholesaler - you can do that right away.  Then, if you find you have interest and ability in real estate, go for you license later.

Are you in this to be a "wholesaler" or to "make money".  If it's the latter, you will ultimately want several ways to accomplish that.

Char Prado · Answer

Well Monika that's exactly how I was trying to post it but obviously you get an A+ for elegance and clarity lol.  To be a Realtor comes with alot of expense just to start up and then there's those pesky rules and regulations that you have to follow legally.

As a wholesaler you bring together a motivated seller and cash buyer, buyer pays your fee and on to the next deal....no brainer to me plus I make my own hours and I'm my own boss that right there is better than money :)

Jonathan Guerrero · Answer

Thanks CHar. I've joined a few and will be attending them soon.

Monika Smith · Answer

I actually went for certification in order to get my license, only to find out I didn't need a license for wholesaling. Wholesaling, in my experience, is actually more money in my pocket. I don't have to wait so long for closing, and the buyer pays me directly when working with free and clear titles, probate, cash buyers. I don't have to cut my fees due to being under a broker. Theres a light at the end of the tunnel with wholesaling.

Char Prado · Answer

In my opinion, it is better for you to join you local RE club if you haven't already.  Start networking immediately to get a buyers list going, start marketing in your neighborhood by putting up bandit signs.  I don't know what a buyer pays a wholesaler in your area but the average in DC area is 5Gs...Good luck!

Char