New Investor needs advice on Wholesaling

6 Replies

I'm a new investor that started in June. My husband and I went through a educational program that taught us how to wholesale. We were very excited to get started. I have done exactly as the program told us to, finding out that Wholesaling is not very favorable out there with many agents. We finally was hooked up with a very nice agent that has a broker that understands the wholesaling. Last week we put our first house under a contract with the clause "and/or assigns". The cash buyers we have, hasn't been able to come through, I put it on CL only described the home but no address or pictures.  But now after reading some articles on BP, I feel that we are one on those investors that has been taken by what you call a "guru" and I'm afraid to go forward now with the home. The last thing we want is trouble. All we wanted to do was to use wholesaling long enough to build enough money to start flipping ourselves. What is our best option for this house that we have under contract?

Joyce

NA Taylor  your issue is going to be selling RE without a license in CA.. your not allowed to tie up a home and then just put it on craigs list to resell you need a license for that.  CA is starting to crack down on this activity and agents are not all that pleased they will start turning people in as well.

I suggest you get into a position you can actually buy the property so you can resell. If you simply want to make commission selling proepty then do what other reputable folks do and get a RE license and sell RE legally.

@Jay Hinrichs after taking this program we were told that wholesaling and the way they told us how to do the deals were all legal. I always wanted to become a investor that rehabs a home than sell, I never was interested in becoming a Realtor but now learning some of the downsides of wholesaling I will definitely be looking at getting my RE license. I sure hope someone can start going after these companies that is selling a lot of information that is against RE laws and get some warning out to the public. Thanks again for the help.

Hey NA Taylor

I'm relatively new to wholesaling as well but what I found helpful is to find a few buyers before getting a deal under contract. I found buyers on CL and on BP. Do a keyword alert for the city you're investing in and you'll find all sorts of investors. Send them a colleague request and ask for more specific information on what they are looking for, so that when u do get a contract you know who to call. Also ask the potential buyers for proof of funds so you know they can actually buy after you do all that work for them. 

Another thing to consider, although a bit more risky, is to actually close on the property and then resell it to your buyer to avoid any accusations of practicing real estate without a license. Unfortunatly you will have to upfront the money first. If you dont have the funds, you can use a transactional lender who will loan you the funds for a short period, and charge you around $1000 to $1500 fee. But that of course comes out of your wholesale profits. I would also only go this route if you have an excellent deal.  That way if your buyer pulls out, it wont be that difficult to find another one really quick. 

@Joyce & Derek Taylor

Welcome to Bigger Pockets community. Be sure to check out “Learn” for all kinds of useful resources and free how to guides.

@Pearline thanks again for the advice I will give it a try.

@ Mark where do you look up "Learn" ? all the resources I can find would be great.

Thanks again Everyone!!!

Learn isn't searched, it's to the left of the search bar.  

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