New Wholesaler: Dilemma and Thoughts

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

@Engelo Rumora quite frankly Engelo is one of the great American success stories bar none.

he comes here 7 years ago from Australia talking all funny with these big grandiose plans.. gets lulled into war zone type stuff because it was cheap learned straight away that was a dead end. And I was telling him so on the Aussie real estate forums LOL) Works his you know what off to create a brand and a name for himself... And now has a super successful turn key company.. a real estate company and bad pad in the Bahama's and a great lady.

all before he has turned 30.. and from a foreign country.. many of US folks could learn a lot from the Dingo.. motivation ,, integrity,, drive and ability to get it done.

I once mentioned to him most all investors, real estate agents, borrowers etc are great when its going great.. the true character will come when you buy a bummer... and WE ALL have bummers in our career its how you handle those that tells the true character.. some go dark.. some man up.. Engelo has proven time after time he will do the later. . @David Washington So David do yourself a favor and book an appointment with him and check out his shop.

JLH Capital Partners51 Review

Chesterfield, SC · Member since 2017 · 142 posts · 73 votes

9y

Originally posted by @David Washington:

I think the question I posited has been lost as people try to push forth some kind of biased opinion or agenda on the act of wholesaling and then coloring everyone that's in the business in that vein. I agree with @Jonathan Damon. I just got here and to have something like this get thrown out of wack so quickly doesn't do much for my opinion about the forums. Maybe it was better to stay a lurker.

So let me restate: I have no problem getting a license (and I know it is not illegal without one. Not even in the stringent state of Ohio). I said that at the very beginning. I'm not trying to be rude but people aren't paying attention and actually reading the thread but want to be quick to add their opinion.

My question was about the broker and what they expect as I don't have any experience there and was looking for feedback on how that works so I can make an informed decision. I'm not “worried” about anything when it comes to brokers. I didn't say it was too much to pay them. I'm wondering how the split works as a wholesaler with a license and not being a real estate agent in the traditional sense.

Thanks.

Laws are almost the same in every state. If you wholesale as a agent or broker your taking a huge risk because of the commission and confusion of representation. Anyone can sue you and any state can fine you either way. The biggest risk though is wholesaling as a agent because you are only allowed to collect 6% "as a agent/broker". Trying to separate that looks fishy to the state and you may get fined.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

@Jonathan Damon that simply is not true.. commissions are negotiable.. I have charged up to 25% on deals i have done over the years.

and as a fairly acitive buyer 15 to 20 props per month.. some of them low value assets.. I see deals were my guys and gals say grab a 10k house and the agent has a 2500 dollar commission..

In fact its against the law to fix commissions at a set rate.. they are always negotiable.. that is rule number one.

Like in Uber hot markets here in PDX commissions have gone down.. the day of 6% is kind of over.. 4 to 5 % is norm.. and sometimes lower ....

In the day when I sold ranch land way out in the boonies of Northern CA.. I would always charge 15 to 25% you needed that much to make any money.

I have been buying distressed assets since the late 70s and been licensed in 3 states all these years.. Never once has it been an issue as long as I disclose I am an agent.

this line is all you need in your contract.

" Buyer is a Real estate Broker in X state and is buying this property as a principal for profit or loss" Never once had anyone balk and thats more than a few hundred deals probably closer to a thousand over the years..

Where you run into trouble either way is flat out lying what the true value of the home is..

Now granted I buy major fixers and hoarders so value is much more subjective.

I just bought one in Lake oswego last fall for well under market .. the house was such an extreme hoarder house that animal control had been there 18 dead cats.. one big snake.. and get this we are at 180,000 thousand pounds have gone to the dump and i drove by today and two more dumpsters are filled up.. and we have not demo'd the house yet.. probably 220 to 240k lbs of crap... LOL.. so with these fixing a value is subjective.. I will subdivide build two homes sell those for just a touch under a million each and have a pretty nice payday all being licensed broker in my state.

JLH Capital Partners51 Review

David Washington

OP

Toledo, OH · Member since 2017 · 18 posts · 8 votes

9y

Originally posted by @Jay Hinrichs:

@Engelo Rumora quite frankly Engelo is one of the great American success stories bar none.

he comes here 7 years ago from Australia talking all funny with these big grandiose plans.. gets lulled into war zone type stuff because it was cheap learned straight away that was a dead end. And I was telling him so on the Aussie real estate forums LOL) Works his you know what off to create a brand and a name for himself... And now has a super successful turn key company.. a real estate company and bad pad in the Bahama's and a great lady.

all before he has turned 30.. and from a foreign country.. many of US folks could learn a lot from the Dingo.. motivation ,, integrity,, drive and ability to get it done.

I once mentioned to him most all investors, real estate agents, borrowers etc are great when its going great.. the true character will come when you buy a bummer... and WE ALL have bummers in our career its how you handle those that tells the true character.. some go dark.. some man up.. Engelo has proven time after time he will do the later. . @David Washington So David do yourself a favor and book an appointment with him and check out his shop.

I will most definitely do that. Thank you kindly for the referral.

By the way—on a totally different subject—on my recent trip to Wisconsin a week or so ago, I was listening to a slate of Bigger Pockets podcasts I had downloaded onto my phone and yours was one of them. Insightful info. If I remember correctly, you had some timber deal in Oregon and then something with lending in...was it Missouri? Forgot the state but somewhere in the southeast U.S.

All the best and thanks again.

3 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

@David Washington yup thats me Timber/Logging. I do business in 15 states. and LOVE WHAT I DO.. I will never retire.. retirement is not even on my radar screen what would I do.. who would I talk to .. what deals could I do.. ??? I see all these threads about these kids retiring on their rentals at 35 just cracks me up... I would be bored to death.. its all about the deal and the fantastic relationships I have fostered over a long career in real estate sales brokerage development building etc... its one reason I see wholesaling to not be that great. your kind of on an island.. you lose the ability to really network with movers and shakers.. you end up trying to sell homes for, many times folks in some sort of distress or dilemma and once your done your done.. no other deals. And your buyers make no mistake your only as good as your last deal..Whereas if your in the real estate industry there are all sorts of avenues you can pursue and many at the same time.. its just crazy in my mind not to have a license it opens many doors.. my most valuable contacts have come from being an agent.

I once listed a small acreage in the wine country in northern ca.. over the phone.. sold it.. no other agents could get it sold.. I always kid things in person as well.. ( before computers fax etc) I drive to the sellers home.. its in Los Altos Hills and the guy owns a software company he just sold for 30 million and that is late 70s LOL.. he invested over 1 million with me in the coming few years and we rocked it.. you simply are not going to get those shots wholesaling houses as your not seen as a real estate professional most of the time.. Another one I got a referral from a 1031 guy in SF and he had a client rolling out of an apartment in Vegas and wanted to buy PDX.. I am not an apartment guy but I am smart.. and we hit it off.. 60 days later we closed a 5 million dollar deal he paid cash.. I made 2% or 100k on that one deal.. he invested 1 mil with me and that was 9 years ago.. we just finished a 27 home subdivision we did togethere and made 7 figures on.. its these types of things you simply can't get to if your not in the business and looked at as a RE professional.

JLH Capital Partners51 Review

William C.

Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes

9y

David Washington may ask why you are so hell bent on being wholesaler? You have mentioned it's "perfect for you" and "fits your long term goals" but as Jay so eloquently put it in his last post, wholesaling will open little if any doors in the business long term. Personally I view wholesaling as a "one off" type deal that in some cases can be a win win win, but in a lot of cases it's lose (seller) win - big win (flipper). So maybe if you could share with us more specific reason why it would be perfect for you and what your actual long term goal are, we might be able to give you better advice to help you along in your real estate "career". Jay has proven getting a license and paying a broker $199 a month would be a simple and legal way to achieve what your trying to do, but it didn't really seem like you thought that was a good route to go. Wholesaling is a job. It's not real estate investing. Are you a top notch marketer? Are you great at selling on the phone and in person? If so maybe wholesaling would be a good fit. Hopefully you shed some light on your situation and your goals so we can understand why wholesaling is a better fit than other ways to succeed in the real estate industry. Best of luck in whatever you decide to do.

Collin Schwartz

Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes

9y

David Washington listen to BP's latest episope with Brett Snodgrass. He discusses wholesaling and I found it incredibly interesting. It might provide some great perspective!

Aaron Phillips

Rental Property Investor · Burlington, KY · Member since 2017 · 101 posts · 66 votes

9y

I am new to wholesaling myself, but I can assure you that wholesaling is LEGAL just frowned upon by many states. If wholesaling was illegal, this forum wouldn't be as popular as it is across the country.

@David Washington Best of luck to you on your wholesaling journey!

David S.

Investor · Prairieville, LA · Member since 2015 · 311 posts · 424 votes

9y

@David Washington

If it would be possible, you might consider actually purchasing the property first, then turn around to sell it. It may be difficult to secure funding, but I would think that would be legal in your state (check with your local laws)? One local investor in my area uses this technique and does extremely well. While it is contradictory to what typical wholesaling is i.e. little or no money out of pocket, you don't have to worry about someone doing an end run around your deal and signing up another PA with the owner. Or having to explain to a seller, I am buying your property, but not really.

Otherwise, I think paying the $199 a month is a no brainer to stay legal.

Anthony D.

Lakeland, FL · Member since 2017 · 44 posts · 25 votes

9y

@David Washington I think you've gotten some great responses to your question and of course you will have to take the good with the bad as this topic brings out the the heavy hitters like Jay Hinrichs who will tell it like it is and Keep it real. We can all learn from hearing what these seasoned veterans have to say and they gonna help while slapping you in the back of the head because here @ BP you get the package deal!! As a newbie myself, i feel wholesaling calling me like dark angel of the night but my plans are slightly different from yours as my plans involve acquiring deal to build a portfolio mainly. I'm not saying I wont sell to Investors also but I dont plan on just being a Wholesaler ...but to each his own! I also intend on getting licensed which will let me dive deeper in the real estate relm and broaden my scope of reach. Good luck with everything, Im sure you'll find your way with the help here on BP!!

https://www.biggerpockets.com/blogs/7384/47278-ans...

Rob Rice

Wholesaler · Douglasville, GA · Member since 2014 · 72 posts · 63 votes

9y

Here we go again. David....Listen to me closely........

WHOLESALING IS NOT ILLEGAL!!!!

MISREPRESENTING YOURSELF OR YOUR INTENTIONS, LYING, CHEATING, STEALING AND TAKING ADVANTAGE OF PEOPLE IS ILLEGAL!!!

IF YOU DO THOSE THINGS, YOU WOULD BE A SCUMBAG, THEN YOU DESERVE WHATEVER YOU GET!!!

NO YOU DON'T NEED A LICENSE TO DO IT!!!

Just remember. You are not selling a property. You are assigning your equitable interest in the property. The purchase and sell agreement gives you that right.

If you want to get your license, do that. Just understand that you are legally bound to your responsibility to the public and your Broker house.

There is no way around that, and rightfully so. That is the way it works. There is nothing wrong with getting your license, just understand what you are doing.

Also if you start wholesaling, understand what you are doing on that side also.

Here is an article that I wrote that would serve you well if you are serious about being a wholesaler.

I just went ahead and reposted it below.

Rob Rice

Wholesaler · Douglasville, GA · Member since 2014 · 72 posts · 63 votes

9y

I couldn't resist reposting the article I wrote on my BP blog page.

Please EVERYONE IN THIS THREAD READ THIS.

This post is one that is in response to a thread started by a BP Member

That talked about wholesalers putting out BS numbers.

I thought the response would serve well to everyone.

Wow.So many points to talk about.LOL

You are right. There are so many guys out there that don't know what they are doing.

I get newbies all the time that try to partner with me on a deal and don't have a clue.They put anything under contract just to try and make sugar from sh*t and It blows up in their face, they lose credibility, and waste the time of people who actually could be buyers if only it was a true deal.

I will make 2 points.One for the person who started the thread, and One for the newbie wholesalers who don't have a clue.

Point #1.

Emptor cavete=Buyer beware.

I suggest you don't even do business with a wholesaler without having a first time 5 minute conversation about their experience in Real Estate, how did they come about this property, and how did they come up with their ARV.

I actually do the same thing with people who call about my deals.I’m trying to find a buyer, however if this is my first time speaking with them, I will ask them about their real estate experience, if they understand about assignments, if they understand that I’m wholesaling the property, and basically have a meeting of the minds about what my intentions are and If I can answer any questions for them.

That is what a good wholesaler should do.If someone doesn’t want to give me 5 minutes to have a meeting of the minds, they are not someone who I want to do business with anyway.I don’t care how good the deal is.You should do the same.

In defense of the comment about another chance to bash wholesalers…

There are just as many BS cash buyer, time wasting, wanna be investors out there as there are wholesalers who don’t have a clue.

I’m an Investor first, and a wholesaler second.I keep 1 out of every 5 deals on average to either fix and flip, or hold for rentals.Every deal I contract is one that I would keep or fix or flip myself.I just like the idea of a fast nickel instead of a slow dime.Not to mention that my strengths are in the areas of Marketing, Negotiating, and Sales….I love that part of the business and wholesaling fits that mold.

So let me put this out there.I’M PROUD TO BE A WHOLESALER.11 years since my first real estate deal, and I have been involved in the buying or selling of about 200 deals residential and commercial.

I did it morally and legally, and paid my dues.That’s why my number is public. LOL…

Sorry about the emotional blowup BP… I just had to get it out..

Now

Point #2.For Newbie Wholesalers.

Go get educated.I hate to agree with the wholesale bashers, but they are right.Learn how to do your business.Stop thinking that you can read a 20 page ebook, call up some “Handy Man Special” signs, partner with a wholesaler, market their deals, get a cut, and that makes you an investor. It does not.

Real wholesalers, know their business, know what their buyers want, and know how to keep them coming back.They know marketing, how to talk to sellers, and negotiate without lying and being a scumbag.They know how to evaluate a deal for a true ARV, true repairs, and a true profit.You don't have to fudge numbers.Present the true ones.If someone wants it they will buy it, if they don't then they won't.Plus true numbers will tell you information about the deal, the market, and where you need to improve in your business.Here is something to think about newbies.

I give my buyers a copy of my original purchase contract.This builds tons of credibility, I let them know how much I’m making up front.I make money wholesaling through volume, good business practices, and doing what I say I’m going to do.We all should do the same no matter our experience level in Real Estate.

Also.. Be ready to defend yourself against the negatives… If you are good and honest about what you do, It won’t be a problem.

I have said my part.That was a great topic Dave.I guess I needed to vent huh…LOL..

If anyone has questions they want answered from a real life wholesaler… connect with me.

Good luck all.

Podcast Guest on Show #89

Engelo RumoraBusiness Member

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

9y

Originally posted by @Jay Hinrichs:

@Engelo Rumora quite frankly Engelo is one of the great American success stories bar none.

he comes here 7 years ago from Australia talking all funny with these big grandiose plans.. gets lulled into war zone type stuff because it was cheap learned straight away that was a dead end. And I was telling him so on the Aussie real estate forums LOL) Works his you know what off to create a brand and a name for himself... And now has a super successful turn key company.. a real estate company and bad pad in the Bahama's and a great lady.

all before he has turned 30.. and from a foreign country.. many of US folks could learn a lot from the Dingo.. motivation ,, integrity,, drive and ability to get it done.

I once mentioned to him most all investors, real estate agents, borrowers etc are great when its going great.. the true character will come when you buy a bummer... and WE ALL have bummers in our career its how you handle those that tells the true character.. some go dark.. some man up.. Engelo has proven time after time he will do the later. . @David Washington So David do yourself a favor and book an appointment with him and check out his shop.

Humbled by your kind words here Jay.

It's a pleasure knowing you and thanks for your guidance over the years.

You are a true asset to the Bigger Pockets audience

Oz Realty4.5368 Reviews

Chesterfield, SC · Member since 2017 · 142 posts · 73 votes

9y

Originally posted by @Jay Hinrichs:

@Jonathan Damon that simply is not true.. commissions are negotiable.. I have charged up to 25% on deals i have done over the years.

and as a fairly acitive buyer 15 to 20 props per month.. some of them low value assets.. I see deals were my guys and gals say grab a 10k house and the agent has a 2500 dollar commission..

In fact its against the law to fix commissions at a set rate.. they are always negotiable.. that is rule number one.

Like in Uber hot markets here in PDX commissions have gone down.. the day of 6% is kind of over.. 4 to 5 % is norm.. and sometimes lower ....

In the day when I sold ranch land way out in the boonies of Northern CA.. I would always charge 15 to 25% you needed that much to make any money.

I have been buying distressed assets since the late 70s and been licensed in 3 states all these years.. Never once has it been an issue as long as I disclose I am an agent.

this line is all you need in your contract.

" Buyer is a Real estate Broker in X state and is buying this property as a principal for profit or loss" Never once had anyone balk and thats more than a few hundred deals probably closer to a thousand over the years..

Where you run into trouble either way is flat out lying what the true value of the home is..

Now granted I buy major fixers and hoarders so value is much more subjective.

I just bought one in Lake oswego last fall for well under market .. the house was such an extreme hoarder house that animal control had been there 18 dead cats.. one big snake.. and get this we are at 180,000 thousand pounds have gone to the dump and i drove by today and two more dumpsters are filled up.. and we have not demo'd the house yet.. probably 220 to 240k lbs of crap... LOL.. so with these fixing a value is subjective.. I will subdivide build two homes sell those for just a touch under a million each and have a pretty nice payday all being licensed broker in my state.

Obviously you read what you wanted out of my post.

If you read my post I said it does vary from state to state. In South Carolina you are only allowed 6% per deal or lower. You can only charge 3% or lower on each side of the deal.

As to wholesaling, I said it was much more risky not illegal. You have fiduciary concerns because you are a realtor as well as you are only allowed to charge a commission of a certain percentage (in some states). Disclosure is key in any situation but you have more to lose as a agent and have to be extra careful. It's a choice and everyone has to go at it there own way in wholesaling but being a agent doesn't protect you anymore than not being one.

https://www.biggerpockets.com/blogs/7384/47278-ans...

Bill Goodland

Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes

9y

Originally posted by @Rob Rice:

Here we go again. David....Listen to me closely........

WHOLESALING IS NOT ILLEGAL!!!!

MISREPRESENTING YOURSELF OR YOUR INTENTIONS, LYING, CHEATING, STEALING AND TAKING ADVANTAGE OF PEOPLE IS ILLEGAL!!!

IF YOU DO THOSE THINGS, YOU WOULD BE A SCUMBAG, THEN YOU DESERVE WHATEVER YOU GET!!!

NO YOU DON'T NEED A LICENSE TO DO IT!!!

Just remember. You are not selling a property. You are assigning your equitable interest in the property. The purchase and sell agreement gives you that right.

If you want to get your license, do that. Just understand that you are legally bound to your responsibility to the public and your Broker house.

There is no way around that, and rightfully so. That is the way it works. There is nothing wrong with getting your license, just understand what you are doing.

Also if you start wholesaling, understand what you are doing on that side also.

Here is an article that I wrote that would serve you well if you are serious about being a wholesaler.

I just went ahead and reposted it below.

I second everything he said. Act in an ethical manner by being up front, open and honest. I feel like too many wholesalers that start out try to just get a deal done by any means necessary including being shady. If you have a true motivated seller and trust the process, there should be no reason that you should get in legal trouble or a bad reputation. Do the dirty work by being a problem solver and if you're so concerned with Ohio state regulations, why not partner with someone with cash and find them deals that they can either buy for them self, or buy to resell/wholetail(buy wholesale sell retail) with a double close to avoid assignment confusion like this weeks BP podcast talked about.

Chesterfield, SC · Member since 2017 · 142 posts · 73 votes

9y

Originally posted by @Tim West:

@Jay Hinrichs You certainly have a strong opinion about this, but it's not the first time all of those things have been said. The techniques you mention are not how to do business; luckily there are many of us that do not need trickery or deception to achieve success. I always try to use caution before painting with such broad strokes. I have many people that I have done business with that can attest to the positive experience of working with a wholesaler that has integrity. Often, you just have to deal with the right people, just as with anything else. Again, if you put helping people ahead of anything else, success comes your way.

Some agents/brokers see wholesalers as a threat and attack them like gangs on here. In the real world though most wholesalers that stay in the business network with agents because it's beneficial and same goes the other way around.

https://www.biggerpockets.com/blogs/7384/47278-ans...

Chesterfield, SC · Member since 2017 · 142 posts · 73 votes

9y

Originally posted by @Bill Goodland:

Originally posted by @Rob Rice:

Here we go again. David....Listen to me closely........

WHOLESALING IS NOT ILLEGAL!!!!

MISREPRESENTING YOURSELF OR YOUR INTENTIONS, LYING, CHEATING, STEALING AND TAKING ADVANTAGE OF PEOPLE IS ILLEGAL!!!

IF YOU DO THOSE THINGS, YOU WOULD BE A SCUMBAG, THEN YOU DESERVE WHATEVER YOU GET!!!

NO YOU DON'T NEED A LICENSE TO DO IT!!!

Just remember. You are not selling a property. You are assigning your equitable interest in the property. The purchase and sell agreement gives you that right.

If you want to get your license, do that. Just understand that you are legally bound to your responsibility to the public and your Broker house.

There is no way around that, and rightfully so. That is the way it works. There is nothing wrong with getting your license, just understand what you are doing.

Also if you start wholesaling, understand what you are doing on that side also.

Here is an article that I wrote that would serve you well if you are serious about being a wholesaler.

I just went ahead and reposted it below.

I second everything he said. Act in an ethical manner by being up front, open and honest. I feel like too many wholesalers that start out try to just get a deal done by any means necessary including being shady. If you have a true motivated seller and trust the process, there should be no reason that you should get in legal trouble or a bad reputation. Do the dirty work by being a problem solver and if you're so concerned with Ohio state regulations, why not partner with someone with cash and find them deals that they can either buy for them self, or buy to resell/wholetail(buy wholesale sell retail) with a double close to avoid assignment confusion like this weeks BP podcast talked about.

Replace wholesaler with scammer and you would be right. What good business comes from lying to people?That even goes for a realtor. Also who wants to stay in court all year with lawsuit while you could be making money?

https://www.biggerpockets.com/blogs/7384/47278-ans...

Chesterfield, SC · Member since 2017 · 142 posts · 73 votes

9y

Originally posted by @Rob Rice:

Here we go again. David....Listen to me closely........

WHOLESALING IS NOT ILLEGAL!!!!

MISREPRESENTING YOURSELF OR YOUR INTENTIONS, LYING, CHEATING, STEALING AND TAKING ADVANTAGE OF PEOPLE IS ILLEGAL!!!

IF YOU DO THOSE THINGS, YOU WOULD BE A SCUMBAG, THEN YOU DESERVE WHATEVER YOU GET!!!

NO YOU DON'T NEED A LICENSE TO DO IT!!!

Just remember. You are not selling a property. You are assigning your equitable interest in the property. The purchase and sell agreement gives you that right.

If you want to get your license, do that. Just understand that you are legally bound to your responsibility to the public and your Broker house.

There is no way around that, and rightfully so. That is the way it works. There is nothing wrong with getting your license, just understand what you are doing.

Also if you start wholesaling, understand what you are doing on that side also.

Here is an article that I wrote that would serve you well if you are serious about being a wholesaler.

I just went ahead and reposted it below.

Just give it up man that dude is hopeless. We just have to keep people informed and squash bad info on here. That's how we do our part. Let's not forget the realtor union once tried to sue people for selling there own homes and people act like wholesaling is shady. Lol

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

@Jonathan Damon I do a lot of work in SC ( charleston and North Charleston) spend a lot of time there.. your absolutly not right about commissions being capped at 6%... is it customary yes.. and 50 /50 splits customary yes... commissions in all markets are customary not set by law.. so again your simply not giving out correct information.

JLH Capital Partners51 Review

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

9y

Hello @David Washington,

You spoke of doing it legally and ethically. I can admire that. The state of Ohio has established that in order for someone to bring a buyer and a seller of real estate together they must take a test and get licensed as a broker. Brokers are allowed to hire salespeople that they oversee. In order to be a salesperson they must be licensed by the state. Once a salesperson has worked under a broker long enough, they are allowed to take the test and be a broker themselves.

The laws are meant to ensure there is a specific standard and that people bringing buyers and sellers together adhere to a specific standard. It is like being a licensed electrician or plumber. You are required to work under a licensed individual so that you know the field. Allowing just anyone to go in and wire houses or put in pipes to distribute waste is something they did not want. They wanted people to oversee it who have been in the business and understood it.

There is always a win/win/win until about 4 days into it and someone feels cheated (During an inspection, a lawn mower, a misunderstanding about a lot line or a neighbors use of the property, a leak that appears or a windstorm knocking a tree over, a mortgage guy that is going to be late on commitment, a bounced EMD check). Once that happens the state has mandated that an agent has one person they are loyal to and who's interest they work in favor of. If you are going to advertise a 3 bedroom, 2 bath house you need a license.

If you are going to advertise a 8.5 X 11" piece of paper with type 12 font in black ink, signed by a couple parties then you are acting honestly and ethically and selling what you do actually own.

Chesterfield, SC · Member since 2017 · 142 posts · 73 votes

9y

Originally posted by @Jay Hinrichs:

@Jonathan Damon I do a lot of work in SC ( charleston and North Charleston) spend a lot of time there.. your absolutly not right about commissions being capped at 6%... is it customary yes.. and 50 /50 splits customary yes... commissions in all markets are customary not set by law.. so again your simply not giving out correct information.

I'm not going to keep this going with you but it's been proven your comments about wholesaling are wrong.

Cletus Kilker

Boca Raton, FL · Member since 2017 · 3 posts · 0 votes

9y

New to BP. Very interested in this topic and very lengthy thread. Just want to say I am very impressed with the healthy debate. Several differences of opinion - yet, from what I see, completely respectful and professional. Kudos y'all.

Susan Knight

Conway, SC · Member since 2012 · 114 posts · 44 votes

9y

I would say after the volley of back and forth discussion license or no license. Have the money to buy a property at a good price and sell it to start off with. Then decide about a license. It all boils down to if you have the money to get the property contracted to you and then sell it. No risk for not getting a buyer right away, it's paid for, then market it. When u get a few deals done and have leverage you can be confident in making deals happen more creatively.

David Washington

OP

Toledo, OH · Member since 2017 · 18 posts · 8 votes

9y

Oh Mylanta. Dad leaves the room for one minute and the kids go crazy. Time to calm down and get a glass of milk. A hug. Something.

It appears that everyone has an opinion on this topic with the vast majority of the posts in this thread not even touching the actual question I asked. @Jay Hinrichs I believe is the only one that actually answered the question with an honorable mention from @Jonathan Damon. @Engelo Rumora addressed my question as well. So thanks for that guys. Sincerely.

I wasn't asking opinions about wholesaling. I've made up my mind on that. I was asking about something else entirely. I wasn't asking what the law was, how to do it, none of that. I stated that from the OP. That much I do know. Everything else is just...well...something else. It's not that it's bad in its context. However, I'm wondering how many people got on the thread to genuinely help and how many got on the thread just to be heard.

I think this horse has been thoroughly beaten and is now officially dead. Thanks to those that helped or attempted to. Appreciate your time.