I am ready to start my journey into wholesaling here in beautiful Denver, Colorado. I am a licensed Realtor and investor that is now looking to venture into wholesaling. Being new to the whole process of wholesaling I am looking to connect with other likeminded individuals that I can bring deals to and maybe gain a better understanding of the whole process. I am a licensed Realtor and having worked in both commercial and residential real estate, I feel that I can offer some value to anyone that is willing to work with me. If you are a flipper and need a licensed real estate agent to help, find, list and market your property, I can be your guy and save you money on commissions if given the opportunity to be part of the flip.
I am a Bigger Pockets premium member but have not taking full advantage of all that it has to offer. Calculating numbers and finding properties is what I am focusing all my attention on currently. I read somewhere “Show me your friends and I’ll show you your future.”, with that I need to find people with the same interests and desire to associate with. I am not looking for any handouts I just want to grow and network, what better place to do that than on Bigger Pockets. This is my second post ever so I hope they will get better, and I appreciate any help that I can get. I will be starting a blog on here also to track my progress and help keep me accountable. Staying motivated has been my issue, mainly because I do not have many connections or friends in real estate, I am really looking for an “accountability buddy” that will help keep me on track and that I can do the same. Here goes nothing, I look forward to connecting with as many people as possible.
First, as a licensed realtor, you have "trust" advantage. Play to that strength. Plus, even though wholesaling is legal in Colorado, so many people believe it's not. Even though the NAR's VP of Legal even created a video on their site because so many people were claiming it's not.
Second, you can double dip your commissions while giving the seller a "deal" by waiving your commission because you're going to get a minimum fee from the buyer of 10% or $10K whichever is more. Don't settle for less because your worth it.
Third, I'd advise you to only work with investors. Make that your niche because you'll have a built in buyer list plus, in general, investors don't need to be hand-held. Just show them the numbers and BAM!
I responded to another BP user that asked a very similar question with more details here: https://www.biggerpockets.com/...
I'm now mentoring her and sending her hot leads because I know she's focused her niche.
"Second, you can double dip your commissions while giving the seller a "deal" by waiving your commission because you're going to get a minimum fee from the buyer of 10% or $10K whichever is more. Don't settle for less because your worth it."
Claiming you are giving the seller a "deal" by waiving your commission is ridiculous. In order for a wholesaler to make a profit, they need to negotiate a purchase price well under market value, waive the commission all you claim, but your 70% of market value offer is eating away that "deal" to the seller. More accurately, many wholesalers take advantage of the seller who is unaware of the true market value and wholesalers have zero fiduciary responsibility to the seller, they represent their own interests. As to getting a minimum fee of 10% of the sales price, this too is predatory. Why on earth should anyone pay a wholesaler more than a licensed agent would receive for representing both sides (4-5% here in CA and up to 6% for lower priced areas)?
As to the legalities, I think it is important for the original poster and all readers to understand that "wholesaling" real estate is NOT illegal, but there are a ton of ways and a ton of people who perform the transaction illegally. Saying that most people say wholesaling is illegal when it is not is not an accurate statement as it is taken out of context. I see wholesalers locking properties and sending them off to potential buyers in email blasts, facebook posts, etc and then colleting their wholesale fee. This violates real estate licensing laws in almost all states. Of course there are several ways and means to legally wholesale too!
With all that said, why not just get licensed, locate investor cash buyers, and then locate properties that meet their needs and collect your 4-6% legal commission and then likely another commission from your buyer client upon resale effectively triple ending the deal! I still cant figure out why most do not go down this legal and ethical road.
Ed and Will,
Thank you for the responses to my post. I appreciate all the feedback I can get. I have no plans on being unethical or illegal with regards to real estate. I am planning on working with investors in whatever way I can. I do have the ability to lower or waive my commissions if able to work with someone on a flip, but I do know that you make your money by getting the property for the right price. I am new to the investor side of real estate transactions and do not want to start off by doing anything that is illegal or unethical. Being a licensed realtor, I will most likely not be doing the typical wholesaling, rather just hoping if I bring an investor a good deal, they will let me earn my money by conducting both ends of the deal. If they already have a Realtor that they use then I would go the traditional wholesaling route.
@Mitchell Mazotti I like your Mindset about getting around like-minded individuals and elevate your circle, it's the only way to grow.
My team always go to a seller appointment with 3 offers:
- A cash offer (usually 50 to 60% ARV)
- A seller financing or sub to offer (up to retail)
- A listing agreement (up to retail)
We ask questions, build rapport, and depending on the needs of the seller, he'll pick whatever option is the best fit.