Using realtors to find cash buyers
Longview, TX · Member since 2018 · 24 posts · 6 votes
I want to make some money by co-wholesaling or doing "jv" deals, by helping wholesalers find cash buyers. The process: wholesaler contacts me for a cash buyer. I then contact some realtors to see if they have a cash buyer. One does, and so then id sign a jv agreement with wholesaler. Send cash buyer over to view property. He likes it and we head to closing. Ok so now at closing, What special paperwork needs to be turned in for the realtor to be properly paid at closing.
My pitch to the realtor is they get to list the property once their buyer is finished with the rehab.
@Rene Calacuayo No offense but that sounds super sketchy. If you dont actually have a buyers list then why would a wholesaler partner with you to find them a buyer??? They can just do exactly what you are doing themselves and keep their entire wholesale fee! In my experience there are guys who will co-wholesale or JV woth newer wholesalers a d they will send the deal out to their massive buyers list. Personally I dont think that sending an email is worth 50% of a deal—but thats my personal opinion.
And also you cannot guarantee the agent they will get the commission when the end buyer flips the house because thats not your decision to make. Most agents have enough common sense not to fall for that line because they know that investor could rent the house or seller finance it or airbnb it or if they are also licensed or have a spouse or business partner thats licensed that person is getting the listing not them. I see a lot of holes in your plan.
@Lydia T. It may sound "sketchy", but it's not. I am providing value for the wholesalers who cannot find their buyers. Yes of course they could do it themselves. Your right. But what if they're down to the last couple days on the contract and still havnt found one? They call me. Realtors know investors and cash buyers. Now the realtor could bring whomever they want, but it would be in their best interest to talk to their buyers to who rehab houses and list the property with them. Now if the rehaber doesnt list the property or decides to rent it out, the agent would still be compensated to maintain the buisness relationship for helping me find the cash buyer, whether it be 500-1k or a percentage out of my cut. So my question is how could i pay the realtor at closing, instead of me wiring money to them, is their like a form they have to turn into the title company? If so what form is it?
@Rene Calacuayo Are you telling these wholesalers that you dont actually have buyers? And what happens if you dont find a buyer? Do you have relationships with these agents already? Is the compensation for the agent coming out of your portion of the proceeds or are you making the wholesaler pay half as well?
I am a huge proponent of bringing value to a transaction. I defend wholesaling on BP all the time because I believe wholesalers (who are behaving ethically) bring a tremendous amount of value to transactions. Both to buyers and sellers. I dont see the value you bring to a wholesaler if you yourself dont have buyers. Because if you are unable to find a realtor who is unable to bring a buyer then that wholesaler is screwed.
With regards to compensating the agent it really depends on the compensation, are you paying them a commission as an agent? If so it needs to go through the title company and be on the settlement statement—and they will probably want to get their brokers OK before moving forward. If you are compensating them as a birddog then you can pay them at closing or pay them outside of closing.
I guess I dont understand why you wouldnt just build a buyers list yourself and then partner with wholesalers who arent able to sell their deals. There is a guy in my market whose entire business model is built on co-wholesaling. He literally does no marketing for deals, he exclusively partners with wholesalers and sends out their deals and handles the sale process entirely. He takes the pics if necessary, has the showings and deals with the investor buyers. He does quite well and his overhead is minimal because he does no marketing. He also has a huge buyers list, some where in the 20k+ range.
I think there are some holes in the plan you have presented. But again thats just my opinion as a wholesaler.
@Lydia T. This is a major tip that i am giving you, check out this youtube video from sean terry https://youtu.be/5Gqpa6Y-B28 if the link doesnt work, its called"how to build an over night email buyers list" that guy in your area who co-wholesales more than likely does what im saying. Get back to me with your thoughts on the vid. Id appreciate it thanks!
@Lydia T. I might not have a huge buyers list, however im leveraging real estate agents lists and compensating them for it
@Rene Calacuayo I love Sean Terry, Im going to guess Ive seen the video because Ive seen the majority of his youtube videos and I subscribe to his podcast. If youve watched or listened to him in depth you would know that he runs a wholesaling business and has a massive buyers list of people that have bought his deals.
The guy in my market does not do what you are suggesting. He brings actual value, he copies me on the email that he sends to his buyers, and I also get all the emails he sends out for all the other properties he wholesales. Because he is a legit and experienced wholesaler that brings an actual value.
I recently watched the latest spiderman movie, but you dont see me trying to websling around Dallas in a spiderman costume. Just because you see someone else do it doesnt mean that its a good idea.
But hey its your life, your business model. My opinion is just that, an opinion.
Cant help but ask, are you actually involved in some aspect of real estate? Or are you one of those guys that just watches youtube vids of people who are actually involved in real estate transactions?
@Lydia T. Im here trying to learn how to co wholesale as a newbie. And this makes sense to me because lots of people seem to be doing this, and it works. And its a great way to get into real estate, Everything i am telling you is legit.