New to Wholesaling ... Please Help

[Chyrelle Robinson]

Hi! I am brand new to wholesaling, I have read, listened to podcasts, and video.  I have reached out to a few local wholesalers mentor me, but, since I am a real estate agent, I've been told that real estate agents are not good candidates, or that I should find deals 1st and take it from there.  I am  extraordinary, resilient, positive, competitive, a great negotiator and salesperson, and have been successful at all of my previous careers, but, I really want to clarify the first steps with someone who has been doing it.

 I am starting tomorrow to make it happen.  I'm confused about order... I have read the articles.  Can anyone tell me what I should do 1st, 2nd and 3rd?   Does anybody have any wise advice?

[Don Konipol]

Originally posted by @Chyrelle Robinson:

Hi! I am brand new to wholesaling, I have read, listened to podcasts, and video.  I have reached out to a few local wholesalers mentor me, but, since I am a real estate agent, I've been told that real estate agents are not good candidates, or that

 Being a licensed real estate agent, there is an inherent conflict of interest when you attempt to participate in a transaction as a wholesaler.  To avoid this conflict of interest, you must keep your activities as an agent and your activities as a wholesaler completely separate.  Even then you run the risk of the appearance of a conflict, and the resulting potential lawsuit.

The conflict arises because of the different legal roles of an agent and a principal.  When wholesaling, it would be important to disclose to the seller that you are a real estate agent, but in this particular case you are not acting as an agent, but as a principal, operating solely in your own best interest, with no agency duty owed the seller.

if the seller, their attorney, the real estate commission, etc. is able, after the fact, to make the case that in your wholesaling activity you were not a principal, but an intermediary, then you would be potentially subject to fine, license suspension or revocation, liability for seller's lost income, and possibly treble damages for deceptive trade practices.  The broker you are supervised by, as well as the brokerage firm holding your license, would be similarly exposed, which is why many brokers will not hold the license of agents engaged in wholesaling.

It is important to know and understand the legal landscape before undertaking any endeavor.  Since the applicable laws are state specific, I recommend you invest in getting the legal opinion and advice of a well informed attorney with an in-depth knowledge of the laws, rules and regulations promulgated by the state real estate commission before commencing your wholesaling business model.