Who Is A Worthy Wholesaling Mentor For Beginners?

19 Replies

Hey guys. Im a brand new, I mean brand new aspiring wholesaler. I read and watch a lot on the subject and feel like I learn quite a bit but I know that a mentor would be super beneficial. Ive heard some good things about Chris Bruce and I like the presentation from CC Garland; who seems relatively inexpensive compared to some Gurus(no thanks). Any thoughts based on experience, on either of these guys?

Hi Christian, 

There are a lot of gurus out there that are more than willing to charge you for something that you can find, research and educate yourself on for free. If you're looking for someone to hold your hand through your first deal that's not what you're going to get by paying someone. Use whatever money you were going to spend on a mentor towards marketing and getting your business set up. Learn by doing. As someone just starting myself don't hesitate to reach out and we can colab together to get going.

Thanks for the input Sean. Im not looking for a handhold necessarily so much as I am looking for a seasoned guide. Theres just so many different opinions and paths to the goal it seems. Its a bit overwhelming! I simply(haha) want to get a legitimate and PROVEN, REPEATABLE PROCESS for Virtual Wholesaling. So many questions but worse is too many answers

Promotion
Speed To Lead
Buy hot seller leads w/o subscription
Buy daily seller leads that are actually ready to sell
Finally there's a place where you can buy leads that asked for urgent help selling their house
Sign up for free

Very true and sometimes you just straight up can't find the answer you're looking for. If you do find someone that you feel comfortable using I hope it works out. I just know a lot of wholesalers will advise against paying a mentor when a ton of information is out there for free, you just have to find it and apply it. 

Experience is a teacher even if its your mentor's experience (through books/audio/seminars)

I'm just like you (yet to do first deal). Activity,persistence, consistency wins the day

None of you need help wholesaling. Wholesaling is simply getting a house under contract and assigning said contract to a cash buyer for a fee. Legal or not, that is not the point I am making. The point is that THAT is wholesaling. Do you need help or a mentor putting your name on 2 pieces of paper and handing the paper to your closing attorney? No!

What you need help with is Lead Generation. THAT is what every damn Wholesaling guru will attempt to teach you, and no offense to any wholesaling guru out there, you have NO STINKING CLUE how lead generation works. PERIOD.

Learn lead generation and you are DONE.

@Christian Brown these wholesaling guru make all their money selling programs on how to wholesale. If they were actually good at wholesaling, they would spend all their time wholesaling. Don't think for a second that paid advice is always worth more than free advice. Most of these paid wholesaling programs are just a sales pitch for their paid coaching program. You get the point, they bleed all your money through the promise of wealth and when you don't succeed they just say, "had you applied what I taught you, you would have been successful". The real lesson here is take action.

Also in my opinion, virtual wholesaling is BS. You have no idea what you are getting under contract because you are buying remotely in a market you don't understand. I have had virtual wholesalers present deals to me and they are horrible. They must find virtual buyers who are ignorant of the market. Nobody local wants these crap properties at inflated prices.

Thank you Jerryll and Joe! I've seen each of you post around BP debunking the need of a paid guru/mentor. I'm glad I followed that advice. I do believe that if you're good at something never do it for free but these gurus are more than happy to take hundreds to thousands of dollars from individuals to teach them things that anyone can find for free or learn on their own. From what I've found you're better off networking and asking questions. There is no "easy" button and not everyone's coaching applies. 

I have yet to do my first wholesale deal myself but I’ve been learning a lot from various guests on BP podcasts on wholesaling. Max Maxwell’s YouTube channel is great since he does a lot of it. I’ve also watched other random wholesaling channels and videos on YouTube to see if they got a different take or strategy on doing wholesaling, even virtual ones.

I’m learning as much as I can over internet before I reach out to investors and experienced RE folks since I’m not yet familiar with the lingo and how financials and numbers work in RE. Taking action is key but you need to have a sense of familiarity with what you’re getting into before wasting anybody’s time.

Figured this would help from a fellow newbie 👍🏼

@Christian Brown   Two points here.  First, if you're looking for a mentor, the question isn't "who is a worthy mentor?".  It's "how can I be a worthy mentee?"  After all, you're asking someone to share their best trade secrets with you so that you can (presumably) go into competition with them - gurus excepted, but they're another story.  

To be a worthy mentee, you need to bring something to them that they want and need.  Time, talent, labor - something.  You should be willing to offer something in exchange for the training you're after.  And yes, as others here have said, guru training programs are most often garbage.  They prey on the gullible and squeeze them for huge sums of money.

Second point.  Wholesaling is illegal in most, if not all jurisdictions.  Simply stated, it is unlicensed real estate brokering. 

Is it done all the time?  Sure, but some states are really starting to crack down on it and in at least a few, it's a felony. 

If it was really as legal as the gurus would have you believe, why would millions of Realtors spend $1,000/year +/- on licenses, NAR membership, local Realtor association membership and continuing education? State governments put real estate licensing laws into place to protect the public from unethical operators.

Wholesalers do virtually the same job as Realtors, so why not get your license?  In the two states where I had mine (MA & ME), the exams were shockingly easy. 

Or as an alternative, go into rehabbing.  Find a derelict property, fix it up and put it on the market.  Sure, you'll need partners, but you'll learn a lot along the way.  After your first few projects, you'll probably know enough to go out on your own.

Good luck!

@Christian Brown

There is some good feedback on this thread already.

I would add to what others have said: sometimes it is worth it to pay for an expedited learning process. I think some of the lead generation content and wholesale courses our there could be worth it for the sake of consolidated information, systems to help you succeed, and probably most important would be the accountability a coach offers.

Not all coaches and courses are out to steal your money guys. I'd argue that many of them are seeking to provide real value.

I recommend find a local wholesaler and ask to work with them and learn the business that way.

Originally posted by @Charlie MacPherson :

@Christian Brown   Wholesaling is illegal in most, if not all jurisdictions.  Simply stated, it is unlicensed real estate brokering. 

Is it done all the time?  Sure, but some states are really starting to crack down on it and in at least a few, it's a felony. 

Just to clarify here since this statement is likely going to piss off all the wholesalers on here (plus it is not correct), wholesaling is NOT illegal, but it can be performed illegally, just like driving a car or boat. Drive while intoxicated and it is illegal.

Joe and Jerryl gave great advice above. Wholesaling is essentially a marketing business, it is not real estate investing. As for a mentor, if you can find a local active wholesaler who does a lot of volume and performs them legally, that would be a great find as a mentor assuming they are willing (and to Charlie's point, you should be bringing something to the table too, be it free labor, door knocking on behalf of your mentor, or whatever).

@Will Barnard I have personally researched wholesaling laws in about a dozen states.  The laws are crystal clear.  They uniformly state that selling, transferring ownership, leasing, renting, exchanging, giving an option (etc) on a property that you do not already own is a license-required activity. 

Following is a copy / paste from a previous discussion on wholesaling in Ohio.  There's a YouTube video of the state officials discussing in in detail:

Some very interesting information here: https://www.youtube.com/watch?v=9fi54S8nwUA

The answer is generally, no. There are very narrow exceptions, most of which involve the intent of the party when to contract was written. The person has to be a bona fide buyer with the full intent of closing on the property.

They state that you can market the contract only. That means you can't even show photos of the property - only photos of the contract. You can describe the property but that's all.

Intent is described at 14:45. They talk about "investors" who put in multiple offers in a short time and whether that person has the ability to close on all of them as a means of determining intent.

The Board is very focused on those who are trying to circumvent license law, so I would not expect a dispute to go in your favor. They also state at about 17:30 that the original contract is the one that has to be closed on. A whole new contract at closing is not allowed.

Earnest money is at 21:00. EMD has to be a substantial amount, though there is no specified amount. A "nominal" EMD has to be enough to reflect your true intent to close on the property.

23:00 - troubling language in contracts. Tying the property up while you find an end buyer. Goes to your original intent.

Contingent on finding an end buyer, seller must immediately vacate upon finding this contract, flex option (option contract), clear statements disclosing to the seller that your true intent is to find another buyer - all language the board has a problem with.

27:00 - contract terms that state that the wholesaler is granted the right to show, market, advertise: Not allowed. You cannot have terms that violate license law. You also cannot advertise it for rent until you actually own it.

Long story short, the regulators in Ohio are on to wholesalers and don't look kindly on their activities. Don't expect leniency if you end up in front of them.

Wholesaling is very simply unlicensed real estate brokering.  If it were legal, WHY WOULD REAL ESTATE LICENSES EVEN EXIST?

Promotion
Apartments.com
List, Screen, Lease, Get Paid, Manage.
No Better Place to Lease Your Place
Owners rely on the #1 rental site to get the best results from their rental properties.
Get Started Now
I'd start with Marcus Maloney out of Chicago. Marcus has some coaching programs available - I believe they're pretty inexpensive. He's very successful and a key part of his business model is giving back by mentoring others. He's been interviewed on the BP podcast so search by his name and listen to his episode. He's active on Instagram and other forums, too. He's really a genuine guy.
Originally posted by @Charlie MacPherson :

@Will Barnard I have personally researched wholesaling laws in about a dozen states.  The laws are crystal clear.  They uniformly state that selling, transferring ownership, leasing, renting, exchanging, giving an option (etc) on a property that you do not already own is a license-required activity. 

Following is a copy / paste from a previous discussion on wholesaling in Ohio.  There's a YouTube video of the state officials discussing in in detail:

Some very interesting information here: https://www.youtube.com/watch?v=9fi54S8nwUA

The answer is generally, no. There are very narrow exceptions, most of which involve the intent of the party when to contract was written. The person has to be a bona fide buyer with the full intent of closing on the property.

They state that you can market the contract only. That means you can't even show photos of the property - only photos of the contract. You can describe the property but that's all.

Intent is described at 14:45. They talk about "investors" who put in multiple offers in a short time and whether that person has the ability to close on all of them as a means of determining intent.

The Board is very focused on those who are trying to circumvent license law, so I would not expect a dispute to go in your favor. They also state at about 17:30 that the original contract is the one that has to be closed on. A whole new contract at closing is not allowed.

Earnest money is at 21:00. EMD has to be a substantial amount, though there is no specified amount. A "nominal" EMD has to be enough to reflect your true intent to close on the property.

23:00 - troubling language in contracts. Tying the property up while you find an end buyer. Goes to your original intent.

Contingent on finding an end buyer, seller must immediately vacate upon finding this contract, flex option (option contract), clear statements disclosing to the seller that your true intent is to find another buyer - all language the board has a problem with.

27:00 - contract terms that state that the wholesaler is granted the right to show, market, advertise: Not allowed. You cannot have terms that violate license law. You also cannot advertise it for rent until you actually own it.

Long story short, the regulators in Ohio are on to wholesalers and don't look kindly on their activities. Don't expect leniency if you end up in front of them.

Wholesaling is very simply unlicensed real estate brokering.  If it were legal, WHY WOULD REAL ESTATE LICENSES EVEN EXIST?

 I don't disagree  with anything you have posted here regarding OH laws on brokering. They have some of the strictest I have read to date now. What you are missing is that "wholesaling" can be completed legally if structured properly, i.e. you never publicly market the property, you have intent to close, etc. So again, I will repeat, wholesaling in of itself is not illegal, but most wholesalers I have seen have done it illegally in states with similar rules such as CA or OH.

Here are three examples of a legal wholesale transaction with example one being one of many I did myself way back in 2011-2013 (or so). 

1. Formed a trust, made offer in the name of the trust, I was the trustee and I named my buyer as the beneficiary. I showed a proof of funds (actual bank statement in my company name - which my name on those entity docs matched my name on the trust docs), I had a buyer in place (in essence, a cash partner), and at closing, I fired myself as trustee giving the beneficiary documents to name their new trustee of said trust. I had a trustee's fee on the Hud1 for my "wholesale fee". All of these transactions, the seller was a bank (REO) or the seller was an individual in a short sale situation where bank had to approve the transaction and documents. I never had any weasel clauses to get out of the contract (if I didn't have a buyer, I had the means and intent to close on it and flip it myself). No brokering violations, no lying to the seller, no lying to the buyer.

2. Have a cash buyer lined up in advance, know the criteria of the buyer, go search for that criteria and contract it with a seller. Either form an entity naming your buyer as part owner or write the contract in the name of your buyer. Either way, the cash buyer is real and in place with real POF and real intent to close. At closing, simply sell your shares to your partner for your wholesale fee or in the event you named your buyer in the PSA, collect your wholesale fee direct from them. Never did you publicly advertise a property you did not own.

3. Find your deal and contract it in your name or your entity. Borrow funds to close your A-B. Find your cash buyer (without publicly marketing any property you have under contract). Close the A-B and shortly after, close your B-C - Typical double close scenario. No violations of any laws here.

Here are 3 simple ways to wholesale legally I have outlined showing "wholesaling" can de done legally. The problem is, most gurus and most wholesalers practice and preach locking properties, finding a buyer and assigning the contract. This format of wholesaling is almost always illegal in most if not all states.

@Will Barnard   Regardless of the intricacies of the "trust" gymnastics you've described, it seems to me that if you boil it down to its essence you caused the sale of a property that you did not own.  That, in every state I've examined is a license-required activity.

Look at your #2.  How did you find your buyer?  You had to tell them about the property, which means you marketed it to that person.  In all of the states that I've looked at, there is no specification about "public" marketing - only marketing.

#3 is not wholesaling under the common definition.  You actually took possession of the property and then re-sold it.  That's more commonly called wholetailing.  There are very few laws that limit what a property owner can do with what he owns, though I think I recall one state in the west - maybe Oregon? - that placed an upper limit per year on the number you could sell without a real estate license.

Again, I ask the same question and I'd really appreciate your answer.  If wholesaling was legal, WHY DO REAL ESTATE LICENSES EVEN EXIST? 

Why wouldn't every aspiring real estate agent skip over the expense of NAR membership ($520/year last I looked), license fees, continuing education, local Board of Realtors fees, etc? When I was licensed I spent ~$1,000 per year just to have the license.

The simple answer is that selling, leasing, optioning, trading, exchanging (etc) real estate that you don't already own (i.e. your name is already on the Title) requires a real estate license.  Those laws are put in place for the sole purpose of protecting consumers from flim-flam artists and unethical agents.

Let's turn my question around.  If wholesaling is legal, WHY ARE STATE GOVERNMENTS ISSUING FINES FOR THOSE WHO DO IT? 

You appear intent on debating me on this. My only concern is educating others here. I'll try one more time for you, but I have been quite clear for everybody here and do not wish to debate you further.

"Regardless of the intricacies of the "trust" gymnastics you've described, it seems to me that if you boil it down to its essence you caused the sale of a property that you did not own. That, in every state I've examined is a license-required activity." - Incorrect. It was not gymnastics, it was good business practices and your inference that I caused a sale I did not own is also not accurate. As the trustee of the trust, I was the buyer along with my partner (the beneficiary).

#2 - I stated "have a cash buyer lined up in advance". I could not be more clear. Having said buyer in advance means I made some kind of arrangement with them prior to locking the property, hence no marketing of the property. I also stated that in this scenario, you form an entity with you AND your buyer owning said entity which means BOTH of you are buyers and as such, partners.

#3 - Put any name on it you want, wholesaling, wholetailing, whatever. Point is, ask 99 people out of 100 and they will say that double closing is one of many ways to wholesale. The end result is that you got paid to find a deal and put deal into cash buyers hand for a fee to you.

To answer your other questions, RE licenses exist to protect the public from unscrupulous characters, but you already knew that. Just because they exist does not preclude some forms of what we RE investors would call "wholesaling" from being legal as pointed out in my clear examples above.

Why would some skip over getting licensed while others don't? Agents get MLS access, unlicensed wholesalers do not. Agents get licensed brokers to help and assist them, and they get the network of other agents from their brokerage and the fraternity of all brokerages. Others skip over perhaps not just for the cost, but for the time and effort to educate, take the test and pass, while others may simply be lazy or enjoy skirting the laws. I don't know exactly why anyone would do that as I am not them.

@Will Barnard While your answers are mostly non-responsive, I'm going to let it go at this. 

For others reading this thread, I suggest that you do your own research by looking at your own state's real estate laws.  Not on some guru website or a YouTube video.  Go to your own state's website and read the laws for yourself.

What you will invariably find is that representing real estate for sale that you don't already own requires a real estate license.  Again, THAT is why states are fining wholesalers for unlicensed real estate brokering.

@Christian Brown

You shouldn’t have to pay a mentor, you can add value to them with finding deals and in other ways without paying for a course. My first mentor I helped him to find multiple deals and sacrificed a lot of pay to learn and help him. Its paid dividends since with the knowledge I’ve gained.