How can I trust a company will pay me after finding them a lead?

25 Replies

I have a handful of properties that I’ve been scoping out in my area that are perfect homes for flips, (boarded windows, paper on door, unkept grass, no realtor sign on lawn etc) I wanted to get into wholesaling but didn’t know where to start or how to get started.

I figure I just give the leads to a company who’s already in the game, and get paid a finders fee for being a bird dog.

How do I know I can trust a company will pay me after they close a deal that I lead them to?

@Mike Baxter Thanks for reaching out Mike, I have a company I found online who are looking for bird dogs in my area (Bradenton, FL). I’m going to definitely try and get something in writing

Originally posted by @Carmelo Lazu :

I have a handful of properties that I’ve been scoping out in my area that are perfect homes for flips, (boarded windows, paper on door, unkept grass, no realtor sign on lawn etc) I wanted to get into wholesaling but didn’t know where to start or how to get started.

I figure I just give the leads to a company who’s already in the game, and get paid a finders fee for being a bird dog.

How do I know I can trust a company will pay me after they close a deal that I lead them to?

I have a some contacts in Tampa... good guys doing a lot of deals.. are you finding leads just in bradenton or?

 

@Carmelo Lazu   Do a search here on BP on "wholesaling in Florida".  You'll not only find that it's illegal, but also that there are people - some BP members - who delight in turning wholesalers in to the RE commission.

Even though you're not the wholesaler yourself, there's a technical glitch.  A contract formed for an illegal purpose is void at its inception.  Not "voidable", but void.

Further, if the person you're bird-dogging for is licensed, it is illegal for a licensed person to compensate an unlicensed person.  I believe that applies in every state.

So instead of operating below the radar, why not get your real estate license?  The barriers to entry are just not that high and instead of a bird dog fee, you can make the entire commission.

Originally posted by @John Slater :

@Charlie MacPherson

Does Florida real estate law says you can’t wholesale?

everything I read says you can, but do it properly to avoid getting in trouble...

Yep, once you “market the property” you’ve crossed the line  

 

Originally posted by @John Slater :

@Wayne Brooks

Got it, thanks, I was just reading that also. Is there something specific about marketing the contract versus marketing the property they makes it doable...?

That’s a common falsehood,,,,once you describe the property, it’s the same as per FL statutes  

 

@John Slater   Yes - you can do it legally.  All you need is a real estate license.

But seriously, real estate laws are put into place to protect consumers. 

I've read horror stories right here on BP, where a wholesaler has a property tied up with an EMD of $10.00 and can't find an end buyer. They just walk away, leaving the homeowner with $10.00 and his plans to move up in flames.

I've seen others where wholesalers brag about making $50,000 as their (illegal) fee, meaning that they stole that much equity that rightly belongs to the seller.

If a licensed agent mistreated a seller that way, the real estate commission in any state would issue discipline ranging from fines to license revocation. 

How would you feel is some wholesaler screwed your Grandma out of $50,000?  That's money that most senior citizens can't recover as their working lives are probably over.  And if you think that there are no wholesalers who would screw the elderly, under-informed and gullible, think again.  That's what the entire sordid industry is built on.

Get your license and subject yourself to the regulations the state has in place.  They're there for a reason.

You'll sleep better at night.

@Charlie MacPherson

Thanks, I’m not a fan of wholesaling either, borders on the ethical side for me when someone has no intention to close on a property that they suggest to the seller they are buying..... was curious about the laws from an educational stand point. Thanks.

@Carmelo Lazu   you do not even know if you have a deal and you are worrying about getting paid ?  I suggest you negotiate a deal, lock it up then flip the contract. Or simply get some docs in order with said co. Really not sure how much I would pay for a lead, since you did not do anything, (NOT being condescending, ) just found a maybe. 

All the best 

@Mike Baxter

Are contracts generally written for each wholesale/deal?

Or is it common for a buyer to write up a contract of multiple properties that you have to fulfill?

@Mike Baxter

Yeah, that makes sense. Just have to swap out a few pieces of general info like address, price and other terms.

@Michael Lopez All of south Florida is hot at the moment. Single family homes/condo are hot due to a lot of people moving into the area coupked with lower than normal supply. Multi family is even hotter due to northern multi family investors selling expensive assets and moving the capital to Florida. That capital goes much farther here so its driven the prices up and cap rates down.

Boca is rapidly becoming the new Wall Street pushing an expensive market even higher.

Originally posted by @Wayne Brooks :

@Carmelo Lazu A tip....just because they are abandoned doesn’t make them a good candidate. The next step is a quick search online for mtgs, liens, etc. as most are underwater.

Do you know where to search online for that information?  I can see what the property last sold for and the current value through the county website but where do I find info about leins, mortgages, etc?