Rental Property Investor · Phoenix, AZ · Member since 2020 · 27 posts · 4 votes
Hello wholesale world!! Sorry if that’s corny but I’m new to wholesale and I’m absolutely obsessed! I want to know the ins and outs if any pros want to spread some knowledge.
I’ve been doing my homework learning what I can from bp and YouTube books things like that. I adapt quickly and learn quickly also! Not looking for a mentor or anything (not ready for that I don’t think) but any knowledge and comments will do thanks world!!
Hello wholesale world!! Sorry if that’s corny but I’m new to wholesale and I’m absolutely obsessed! I want to know the ins and outs if any pros want to spread some knowledge.
I’ve been doing my homework learning what I can from bp and YouTube books things like that. I adapt quickly and learn quickly also! Not looking for a mentor or anything (not ready for that I don’t think) but any knowledge and comments will do thanks world!!
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. 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.
Not only is this a VERY common question in here, it seems to be the question of the day.
My go-to advice: Start attending as many local REI events as you can, and read the book, "If you can't wholesale after this... I've got nothing for you." And... be consistent. Don't expect immediate results. You have to put in the effort and keep at it.
Hello wholesale world!! Sorry if that’s corny but I’m new to wholesale and I’m absolutely obsessed! I want to know the ins and outs if any pros want to spread some knowledge.
I’ve been doing my homework learning what I can from bp and YouTube books things like that. I adapt quickly and learn quickly also! Not looking for a mentor or anything (not ready for that I don’t think) but any knowledge and comments will do thanks world!!
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. 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.
Appreciate the advice. In my experience I have heard the pros and cons of being a wholesaler. I don’t believe it to be a scam or to hide information from the seller. I see it as no other options and if I were to genuinely present all options that the seller can try maybe that’s not for them and that’s where I would come in again I may be wrong but that’s at least that’s how I feel about it now. And the work seems legit hard enough for a lot of ppl to quit or fail but also an upside to making something happen for yourself.
Appreciate the advice. In my experience I have heard the pros and cons of being a wholesaler. I don’t believe it to be a scam or to hide information from the seller. I see it as no other options and if I were to genuinely present all options that the seller can try maybe that’s not for them and that’s where I would come in again I may be wrong but that’s at least that’s how I feel about it now. And the work seems legit hard enough for a lot of ppl to quit or fail but also an upside to making something happen for yourself.
Whether or not you or the seller feel ok about an arrangement is fairly irrelevant if it's illegal. I imagine most folks buying Heroin enjoy the relationship with their drug dealer, no?
Quick question, i don’t know much about wholesale and I don’t listen to “gurus” and the “easy ways” so I am not bias (I hope).
if I work hard to find a few deals that are bellow market and I go into contract with the seller (FSBO) meaning there is no agent/broker involved, can I just sell that property at or above market once the closing is over (contract is under my name)? And can I sell as owner (no agent/broker)?
Quick question, i don’t know much about wholesale and I don’t listen to “gurus” and the “easy ways” so I am not bias (I hope).
if I work hard to find a few deals that are bellow market and I go into contract with the seller (FSBO) meaning there is no agent/broker involved, can I just sell that property at or above market once the closing is over (contract is under my name)? And can I sell as owner (no agent/broker)?
Note I respect agents, my wife used to be one.
Thanks
JRG
Yes you can sell a home you own after the closing. It is trying to “sell the house” before you own it that becomes an issue.
As wholesaling is referred to most of the time, it means put a house under contract and assign your position in that contract to another investor. Assignment of position In a contract isn’t illegal (most of the time at least), however the intent behind signing the contract, the advertising of the house/contract and other things that are done is where it turns grey and moves into a legal issue.
With that said, I can’t think of many scenarios where you buy the home and then sell it right away once you have taken ownership, would be illegal. Most wholesalers don’t do this as it costs more money to close, they have to actually buy the house (lots can’t do that) and there are more risks involved.
Got it. And that's where having an agent license comes in handy, where you don't need to buy the home to retail it.
But by having a license, aren't you supposed to list the house on the MLS and market it at the market price? plus the only profit you would end up making is the realtor's fee and not the difference in what the seller is willing to get and what the buyer is willing to pay? that is no longer wholesaling, isn't it?
I've been considering getting my license but if I am licensed and I find a good deal to wholesale I would be obligated to act as a realtor not as a wholesaler, right?
Quick question, i don’t know much about wholesale and I don’t listen to “gurus” and the “easy ways” so I am not bias (I hope).
if I work hard to find a few deals that are bellow market and I go into contract with the seller (FSBO) meaning there is no agent/broker involved, can I just sell that property at or above market once the closing is over (contract is under my name)? And can I sell as owner (no agent/broker)?
Note I respect agents, my wife used to be one.
Thanks
JRG
Absolutely. What you described is what wholesaling ACTUALLY is. Buy low and sell high. That's capitalism baby. You can and should do the hell out of that. No license needed. What people commonly refer to as wholesaling today is just brokering real estate because folks are trying to sell this dream to people who don't have the ability to actually buy the property. So they removed that part and called commissions "assignment fees."
A person with "common sense" knows that to have a part in this business (or any other business for that matter) you need some money (even if you end up doing the deal with no $ down). This money is the cushion to fall in case something goes wrong. To build the cushion you need to make a small effort (2-3 years) and save all the $ you can form your current job. This will create discipline and confidence, and it will pay off at the end (Financial Freedom in 5-10 years).
All we need is common sense and not let emotions get in the way (easier said than done right!).
@James Wise you're never actually purchasing the property. You're reassigning the contract to purchase to your end buyer. No need for a real estate license. You sell a contract. Not a house.
@Paul Moorer@James Wise Yeah... so wholesaling without a license is not illegal if done properly... and there are many state to state intricacies that can effect how you have to conduct your business, there's no Federal law on brokering Realestate LOL. Do your own research if you are really interested in it, Paul.
James hates wholesalers because he's an agent and they technically steal his business. Wholesalers are very valuable IMO bc they're constantly sourcing deals... that being said, some of the methods wholesalers use can be shady and morally wrong. So if you do it, make sure you do it right.
Yo I read everything you guys had to say and I’m learning a lot seems like 2 sides to this topic to me. I’ve done some research and I threw this topic out there to see what would come back. My definition of wholesale from what I’ve gathered and correct me if I’m wrong.
wholesaling is assigning a contract from seller to buyer for x amount of dollars.
I want to meet with owners of properties not sell them a dream of getting a lot of money for their home nor would I insult them by a ridiculously low offer. I need to do my due diligence strike up a conversation maybe meet at the property (this is where I feel a real estate license may help me) by assessing the property and really understanding the costs of possible rehab if any. Really talk to the home owner and see what the true problem is and if another option is better then I want to let them know. If they agree to my number great or vice versa then I sell that contract to the buyer. So technically I’m not purchasing a property.
Remember I’m just a guy wanting to know about real estate. Money is most definitely needed nothing is free and time will be spent for sure I know that. I’m in this for the long haul and I want to grow in other aspects of real estate. But right is right and wrong is wrong and I need to know both so I can not make the mistakes that end my car before it even start feel me?
Na you're barking up the wrong tree. For one I don't think the OP and myself are competing for the same business. Secondly if the OP was illegally brokering (stealing my business as you say) then decided to get his license and continue brokering above board he'd still be taking business away from me, wouldn't he?
I am simply here to present factual information to those who don't know the rules and regulations of the real estate industry. As someone who has sold over $150 Million of investment real estate and owns a real estate brokerage, property management company, licensed construction company, insurance brokerage and licensed title company I've got a unique level of experience in the industry. I assure you, watching a few YouTube videos or attending a 3 day event doesn't replace that level of experience with local, state and federal regulations.
Paul...please understand that it does not matter what your definition of "wholesaling" is here or the other side for that matter. It is what the law states and if you choose to move forward, be prepared for huge fines and possible jail time. We all have the habitual offending, unlicensed gurus to thank. The tired argument of "I'm selling a contract" won't fly because said contract is regarding real estate. And...it absolutely is illegal. The more recent example I'm sure you've heard is Illinois making it illegal. However, Illinois only passed a Resolution. Why? Because it was ALREADY law and it only "clarified" the existing law to include this activity so there was no more "interest in a cocktail napkin" bs.
That goes for every state, but others simply have not "clarified" yet, but are still cracking down. So, if you do move forward without a license, know you are breaking the law.
No one is trying to discourage you from real estate, but this question is extremely common and @james wise is absolutely correct. He is not trying to discourage you nor am I. He is very "to the point" and also completely accurate. I don't think anyone is "stealing" his business. He has more licensing and real experience on his side than most.
I know it's tempting because you're "guaranteed massive wealth" as long as you take the guru course and take "massive action" to steal granny's only asset for a few bucks to sell for twice as much. Problem is you likely won't "assign" it as investors see right through it and you can't advertise it.
There are many other ways to get in to real estate and still do very well. Wholesaling/assigning should not be an option if you have any ethical, moral standards and any regard for the law. As suggested, it's then easier to just sell heroin and call yourself a Pharmaceutical Rep and Distribution Specialist.
Oh...and when I say be prepared for the consequences, I'm referring to many licensed individuals who are actively turning in any unlicensed individuals engaging in that type of business. They are on every forum and people you might not expect helping the crack down. So again, just be very careful.
At this point I might just be an idiot because according to y’all, wholesale is both legal and illegal. I didn’t create my own definition and if there’s something I need if I wanna do wholesaling legally just say what I need. I’m a very blunt person and it just sounds like to me ppl are saying a whole lot when it’s not needed. I wanna do things by the book flat out and that’s why I posted this.