How can an agent help me if I am wholesaling (assignments)?

Question

I am doing direct mail to find off market leads. I intend to wholesale deals using assignments for a while to build up capital for flips and rentals. I just finished listening to podcast #200 which talks about the 20 things that must be done to get your first investment deal. One of these things is to get your team in order. An agent was listed as an essential team member to have before looking for deals. How can an agent help me if all my deals will be off market and I will not be the one ultimately closing on the property? Is there anything I am missing? Any hidden benefit to having an agent in this sort of transaction that I am missing? Finally, if there is a benefit to me finding an investor friendly agent for my business while I am doing these deals, In what way can I provide assistance back to them in return since they will not recieve a commission off any of these deals? Any feedback is appriciated. Thank you.

Andrew Quinn · Answer

Thanks Daniel. I see what you mean. A listing agent will likely not be of much assistance to me im guessing. But a buyers agent may be able to assist because they have a large pool of buyers. An add on question id like to add to this would be if a buyers agent leads me to an end buyer for my assignment deal, who pays their commission? The seller is expecting to pay no commission due to the fact that they have a contract with me and not an agent. So who pays the commission the buyer or me? Is this even legal? Wouldn't i be acting as an agent by getting a contract and sending it to a buyers agent to find a buyer? Wouldn't I be basically acting as a listing agent? Any feedback is greatly appriciated.

Andrew Quinn · Answer

Thank you Jim. Great idea to refer seller leads to listing agents that do not fit my criteria. What can a listing agent do for me in return? Would it be the exact opposite? They refer leads to me that they've spoken with that choose not to use their services?

Daniel Y. · Answer

Hi Andrew,

I am in the process of getting my real estate license, however I have been an investor long before I decided to get my license. So this is my opinion from what I've learn and depending on the local market, some markets might operation slightly different than my opinion because of different factors.

I personally reach out to wholesalers and try to learn a bit about wholesaling myself to know how that side operates. An agent, especially an investor friendly agent with an investor network, would be a great asset to help you turnover your inventory much faster. Sure, you don't have too much capital tied up because you didn't buy the house, but you don't make any money until the home is assigned and closed, right? So a good agent will get that property to their network, so you get paid.

Just don't try to find agents, even investor friendly agents, to get you a property at a wholesaling discount off of the MLS. It's not impossible, just very very difficult. Once there is an agent attached to a property with a contract, it is the agent's duty to get the better offer for their client. So as a listing agent, the highest price possible or what's best for their client. And unless that agent is extremely incompetent, there is no reason they cannot get an offer better than the wholesaling number that would make sense for you. On the other hand, a buyer's agent will be finding the lowest price for the value or potential value. With your wholesaling price, it should be relatively quick and easy if they are have strong network.

You will find a lot of threads on BP where wholesalers complain about agents not providing great price and vice versa where wholesalers lowball too much, and it is only because they are just playing the game wrong.

This is just the brief summary of my thoughts, so hope it gives you some insight. Best of luck to you.

Jim Keller · Answer

You are thinking the right way..... the more people you help get what they want the more often you will get what you want.

Use every deal you don't put under contract as a referral to an agent of your choice, or as I call them my agent partner.  Nothing will make an agent more excited about sending you there best deals than you giving them a few referrals..... good luck

Jim