Wholsalers etc: Why not just go get your RE license?
General question.
I frequently read posts wherein a wholesaler, birddog, or similar, talks about finding buyers, finding sellers, connecting them, and this sort of thing. And the questions are invariably about what contracts to use, how to make it legal, why homeowners don't take them seriously, how to get legally paid, where to find buyers, where to find sellers, why investors don't take them seriously, and the like.
Mostly, I read unlicensed folks trying to find a way to lawfully make money from engaging in real estate agent activities, typically via arbitrage instead of commission.
So the question begged: why not just go do all those things you wish to do, but as a licensed agent? What's so scary about getting a real estate agent license and doing all those things you wish to do, and perhaps are already doing, within the framework that already exists to do exactly those things?
Let's take one common wholesaling model: Find people willing to sell for way under market value, tie it up in contract, go find buyer willing to pay more than the seller is willing to sell for, and pocket the difference. Why not get a license, list it, go to those same buyers you already have, present it, and take 5-6%?
It seems to come down to arbitrage ("pocket the difference") versus commission as the only tangible difference that I can identify (you know, aside from the pesky legal stuff like "is this legal at all?"), unless I am missing something.
One might suppose that the average arbitrage paycheck is larger than the average commission paycheck (2.5%-3% if you just list, 5-6% if you list AND bring the buyer). But from everything I've read on here, and the few wholesale deals I've been involved in, the wholesale ones are MASSIVE time sinks per-deal relative to the vanilla get the listing -> present it to your buyers -> identify a buyer -> close -> collect commission route. If you have that existing wholesaler skill-set, it seems to me that you could apply it to vanilla or vanilla-ish (as a REI specialist agent) transactions, and net more at the end of the year by simply closing a crap ton more deals.
So, wholesalers, educate me: What am I Missing?
