there has a lot of chatter recently about getting an RE license when wholesaling. i have thought about it, but in WA state it's 90 hours and $400 or so. the 90 hours is the real turn off for me.
could someone please rationally explain the advantages of being licensed? if licensed, must i work for a broker? what are the fees and costs associated with being licensed (in terms of MLS, etc.) how about pay the Errors & Omissions insurance, desk fees, lock-box fees, Local Board fees, National Board Fees, etc.?
in terms of advantages, beside the additional knowledge base, what sort of legal protections are there for licensed "wholesalers?"
I'm with Patrick,
I myself am in the process of obtain a real estate license and also am very interested in wholesaling. I've heard a few people tell me that getting a license will give me an advantage. Is this because agents simply have access to listings? But as an agent can I wholesale one of my listings?
@Matthew Santillanes can you clafify the question, can you wholesale one if your listings.
Just keep in mind that there are many regulations imposed upon you from your state and your brokerage related to wholesaling while licensed. I am sure it can and is done regularly, but it is a gray area and must be handled with care and integrity. Just my two cents as a Realtor. As far as the fees - plan for a few thousand a year in expenses. Good luck with your decision!
depends on what you want to do.. do you want to have RE as a career? or do you think wholesaling will be a long term gig for you.. most folks that wholesale last a year or two then migrate.. those that get licensed and treat it as a career do it for years .. Like me 40 years that's all I have done by being licensed I do far more than just flip homes I have learned to lend money ( CA brokers are HML) I learned about tax sales foreclosure sales how to research the ct. house.. Plus along the way got listing that sold in a week and made 15k all legally ... and probably the biggest is just the networking with other RE professionals instead of being on an island.. and of course MLS at your home computer that is invaluable in todays highly competitive market... So if you just want to wholesale you will probably not be doing it in a year or two.. If you want a career then get the license give it a run and see where it takes you it took me all over the world and created a pretty fabulous lifestyle frankly.
So would it be fair to say that a person could wait to get a license until they get the hang of how the business works, but still start out wholesaling? My goal is to make real estate investing a career, but still a lot to learn in order to reach my goal.
i actually just got off the phone with a realtor/loan officer/wholesaler. he said that his brokerage had put some restrictions on his ability to wholesale and that certain state regulations made disclosure of his status an impediment to getting a good deal.
although access to MLS is nice, he admits that certain other sites like Redfin.com are very comparable, and offer no much of a greater advantage.
here is an excerpt from an email he just sent me:
"If your whole goal is to INVEST in RE (that includes wholesaling!) then getting a realtors license will likely be a waste of time. You want to be an investor? Start by being an investor.
If you want to SUPPLEMENT your RE investing with selling some homes WITH your realtors license and make a commission doing so (sometimes with more restrictions than a wholesaler has!) then by all means, get the license."
I've found that if you ask any 20 estate investors a question, you're likely to get 40 different answers :)
i do not begrudge anyone from acquiring a license, but i think it will depend on your long term goals, as Jay above pointed out.
Think about it this way. If you have a RE license, you are wholesaling, and you don't have to worry about assigning a contract. You are marketing to find motivated sellers (just like a wholesaler), then bringing a buyer to the table (just like a wholesaler). You can set your own wholesaling fee (commission) and you don't have to worry about double close or a bank worrying about language of assignment on a contract.
to an extent, Joan. you also have a whole range of fees, dues, and other costs. plus your managing broker takes his nice cut. especially certain firms. and lest we forget the extra disclosures that are required by the state.
Patrick based on your background your a bright guy.. wholesaling is just one very small facet of the RE game and it can be profitable there are many more ways to make good money..
If we take the RE agent that just specializes in selling RE or listing RE depending on their market if your smart willing to spend some marketing money ( like you would yellow letters and other marketing for wholesaling) are driven and are good.. you can make pretty good money.. Top agents in the PDX market make 300 to 500k no problem. And there are quite a few that do that.. Every office has a handful or a few... And of course those that have big teams.. 1 mil a year in commission is not out of the questions for one who really wants to work it.. Now were your at if that is were you live Blaine ( I go through there on my Way to Kamloops an Kelowna to fish ( when I drive I normally fly) but prices may not be that high were you live so it may be harder to hit those numbers.. It would be interesting to see how much wholesalers make in a year... I know in my deals that I fund for my rehabbers there are many times bird dog fee's on the huds and they are 3 to 4k normally... So like a great RE agent I bet there are wholesalers that make 300 to a million or more and there are probably some super wholesalers that move tapes and such that make much more.
It really boils down to how much time and energy you want to put into something and if you want to sell to the public. My wife who has done this for 20 plus years makes 6 figures in her sleep basically its all referral and far easier than wholesaling I can assure you of that. so you talk about residual income.. and owning rentals.. She just gets a call like tonight she got a referral call they want her to list her home and sell her a new one.. that's probably north of 20k .. with maybe 10 to 20 hours worth of actual time on the file and with the way RE is now.. clients look on their own and call and tell you what homes they want to see you just set up appointments meet them and present and close and right now we are all bless ed with great market so a listing can be just money in the bank..
So my point is many ways to skin a cat in this game
I too am studying for my license not because I want to spend my time showing houses or finding homes for buyers but more so because of the doors it will open. I don't really care to do a lot of the activities agents do but the connections it will bring and greater number of options will be worth it. My ultimate goal is to become a broker so I can broker my own transactions. Eh it's a stepping stone. One transaction a year will cover your annual fixed costs for MLS, E&O etc. Biggest downside I see is not being able to market to currently listed homes. Cheers!
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