How to wholesale with no money or license? Is it even possible?

20 Replies

Well---one little problem is tricking sellers into signing a contract with you. You must represent yourself as a buyer even though you are not. This is called FRAUD. I see it all the time from unlicensed brokers and the damage they do to sellers. 

Originally posted by @Phillip Hooks-Wright :

Newbie in need of getting started with no money. Is it even possible to wholesale with little to nothing? positive responses

 Be careful, a lot of states are making it illegal now to do anything without a license. 

@Phillip Hooks-Wright ,

Those weren't the positive responses you were looking for, where they?  That said, what these two agents said should be considered.  Wholesaling is a relatively simple process, and you can do it for cheap.  You do need to invest, but that is going to be some combination of time and money.  You can choose how you're going to do that.

Start with two things. First, get active in your REI community. Attend meetups and REIA regular meetings. Learn from those who are doing it what the issues might be. What are they doing, what are they not doing, and what works best for them. Second, learn everything you can. There are a LOT of resources available to you that explain how wholesaling works, and what options are available to you for getting started.

You're at the learning stage, and you need to learn.  Once you have some knowledge under your belt, you can start making the decision yourself if you have the time and/or money you need - oh, and especially the drive.  Once you dive in, you need to keep at it.  Most likely it will take a while to get things going, and you need to be prepared to work hard for quite a while without closing any deals.

Originally posted by @Phillip Hooks-Wright :

Newbie in need of getting started with no money. Is it even possible to wholesale with little to nothing? positive responses

Wholesaling as it's taught is a myth. You need a license to Broker real estate. That's all wholesaling is as it's taught in these programs, it's brokering real estate except instead of being up front & telling the distressed seller that you'll sell their property for X amount & take X amount as your commission / fee you are taught to lie to the seller & pretend you are going to buy the property while you secretly attempt to "assign" your contract.

It doesn't work. Nobody has any respect for wholesalers. Whenever a wholesaler contacts me I simply get the information about the property & reach out to the owner myself cutting the wholesaler out of the deal entirely. If you do business above board as a licensed agent that won't happen to you. The only people making money wholesaling are the guys selling you all of that education.

To be successful connecting buyers and sellers you need to have

  • An in depth knowledge of the market.
  • Marketing skills.
  • Sales skills.
  • Negotiation skills.
  • Accurately estimate rehab costs.
  • Understand how to much time it would cost to run a renovation on the properties you are presenting.

My advice get a real estate license. Way cheaper, no legal issues, more respect and there is a decent chunk of cheap or free training out there from the mega brokerages. Soak it all in while you're trying to get off the ground. It's not an easy job, 90% fail rate but it's better than the 99.9% "wholesaler" fail rate.

@Phillip Hooks-Wright ,

Well this is starting to degrade into an argument about the legalities of wholesaling. 

Instead of taking what @James Wise said at face value, do the research and training yourself.  Personally, I was taught never to lie or deceive a seller.  Don't start outright with how the process works, just as they're not going to start outright with what issues they're facing.  But do NOT deceive.  Answer questions and explain things carefully.  When you are really there to help someone, they are totally ok with you making a profit in the process - if they need your services.  If they don't, and they actually need an agent, be upfront and refer them to an agent on your team. 

As for respecting wholesalers, again, don't listen to the nay-sayers. I meet cash buyers on a regular basis - usually at REIA meetings, but in other places as well, and when I tell them I'm a wholesaler, they almost always ask to be put on my buyers list. I find out what they want so that I can bring them great deals when I have them. In fact, they're having difficulty finding sellers just as anyone else is, and they want the help. One rather busy flipper here told me, "I don't care how much you make. As long as it's a good deal for me. I hope you make a LOT!"

Now, if it turns out you're in an area that requires it, or you just decide it would be better to do it, get your RE license.  Now, apparently, the RE agents will respect you and let you do what you were going to do anyway.

@Phillip Hooks-Wright wholesaling as it's taught by almost every guru out there is illegal in almost every state. However, most states ignore it right now. But that's changing. States are now modifying the laws to make it blatantly illegal. The proper way to "wholesale" is to sell the contract and not the property. Most think it's a fine line. It's not. Go over to WatsonInvested.com and check out the wholesaling videos that Jeff Watson put up. They explain a lot.

With all that said, double close. Yes, it costs you more of your profit in closing costs, but it clearly demonstrates your ability and intent to close. (The socialistic state of Illinois is the only state I know of that really has an issue with double closes under their new laws.) Jeff Watson and John Cochran do have a course you can buy that shows how to do it completely legally (I don't get anything for recommending it here).

Good luck.

Reach out if you need help.

@Phillip Hooks-Wright  

Where did you get the idea of wholesaling or buying real estate without NO MONEY DOWN from? I'm curious?

I see many people bashing wholesaling a lot lately, but the reality is that this is what is sold to the public. 

You can start with NO MONEY DOWN today! Start now! ( I mean there are books with this exact title). So when we see people seeking information and looking to do what they have been told: why are these people seen as requesting for something out of this world? 

Clearly, people are getting this insight from somewhere (and it is not all from "Gurus"). I know I'm being little unorthodox here, but let's be real. 

Oh, for the record, I've never wholesaled, and I'm indifferent about whether or not people do it, tbh. 

I mean this is America - people are just trying to get a piece of the action, I guess. 

@James Wise

This just helped me a lot because I’ve only just learned about this a week ago, and you’re right everyone teaches it as an amazing real estate strategy. Which is why I made that other post asking if it was possible to be an agent (as I always planned) and do wholesaling.

How to agents get away with it then?

@Phillip Hooks-Wright aside from the debate as to whether it’s legal or not... there is almost no business on earth that you can start legally with zero money.

Even if you are providing a service you may need tools, bank account, insurance, invoicing system, quick books... something.

I would work on building up some Capital through working and saving, then look to invest in a business.

Originally posted by @Phillip Hooks-Wright :

@Barry Pekin Thank you for the words of encouragement💪🏽 I will definitely take a look into attending meetups and gatherings. Do you wholesale yourself?

Yes, I do wholesale, but I'm just starting.  I've put a lot of effort into learning both from an educational perspective, and a motivational one.  I know I'm in for the long haul, wherever that takes me - even if the laws dictate that I need to become an agent.

Originally posted by @Paris Morris :

@James Wise

This just helped me a lot because I’ve only just learned about this a week ago, and you’re right everyone teaches it as an amazing real estate strategy. Which is why I made that other post asking if it was possible to be an agent (as I always planned) and do wholesaling.

How to agents get away with it then?

Yes, as an agent you can do wholesaling as long as its backed by your broker and done legit.

Wholesalers get away with it because the laws haven't been enforced.  Non licensed wholesalers trick a distressed homeowner as if they are the person buying the property.  They have a bad name because they play games of deceit and lie to the seller.

 

@Phillip Hooks-Wright I am going to give it to you straight. It is not possible to wholesale with no money. If you have no money or very little, or if you are struggling to pay your bills then real estate investing is not for you right now. You need to get your finances in order before you get into this game. Wholesaling is promoted as the ‘get rich quick with no money’ way to get into real estate. Thats all bull crap. Everyone promoting that message has something to sell you. Period. It takes money to wholesale. It takes a lot of specialized knowledge to wholesale. There is a lot that goes into wholesaling that no one will tell you about. Start with getting your finances in order. While you are doing that take the time to actually learn about wholesaling. Actual info, not that Max Maxwell garbage. Go to meetups and REIAs. Start talking to people who actually do what you are trying to do. Thats honestly the best advice I can give you. Probably not what you wanted hear. Good luck!

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