Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Here’s my advice nobody wants to hear
If your business/investing consists of buying houses from homeowners in any shape or form, such as wholesaling, novation, double closing, etc. GET OUT OF THE BUSINESS, and develop a new business model.
For the new business model you have two choices - either stay with homeowners and operate as a LICENSED real estate broker fully WITHIN the legal guidelines set forth by state law, or operate in the arena of commercial property or only deal with investors in residential properties.
Not only is it becoming increasingly difficult to operate within the law of more and more states when attempting to deal with homeowners sans licensure, it’s also becoming more difficult to make a profit as information is now instantly available on line; competition from “students” of gurus is increasing, and entrenched competitors are spending $10,000 + monthly on marketing.
Find another niche in the real estate world to operate in. You’ll be happier, you’ll earn more money, you’ll incur less legal risk, and you’ll be better looking too!
@Don Konipol My stance on this has shifted a lot over the last few years. The deeper we get into the industry, the more I realize how much bad stuff happens and how often sellers get taken advantage of. That's certainly not every case, and there are a great deal of ethical wholesalers out there. But especially in Pennsylvania, now that Act 52 is law, requiring people who wholesale to be licensed is doing a great thing for the industry. It means the people actually practicing real estate have to be educated. It won't get every bad actor out of the business, but it's legitimizing wholesaling in a way I never thought possible. Our team is loving it and thriving.
There are a great deal of ethical wholesalers out there but many of them are run by a business, and unfortunately it is probably less than 1% because many will pay $99 for a guru at a holiday inn giving away free breakfast tell you it can be done easilty if you give them another $5k with the credit card machine and application in the back room and many do that.
Of course both of you are correct. But as important is to concentrate on the fact that earning a decent profit on your time is VERY difficult in “wholesaling”; especially difficult for people without great knowledge, experience, or a talent for sales + negotiation. And the common held belief that “wholesaling” is being an investor or training for investing …. Wow that’s a very unfortunate falsehood.