A thin line between Realtor & Investor...?

Question

I am a Realtor, licensed in Virginia and Maryland. I have convinced my husband FINALLY to take a chance on real estate investing. We want to dive into wholesaling as we also find our way into a fix and flip. I LOVE Bigger Pockets and this is actually my second time getting on this site (I have since matured, got my licenses, and realized how serious investing is) and I have been reading and listening to as much as I can. All of a sudden I got fearful! How do I wholesale while being a licensed agent?! Is it legal?? Is it ethical? How can I make my license work FOR me while keeping my brokerage happy? I have a totally separate LLC to invest under, it won't be in my name... but I will still be obligated to disclose my license status, right?

Any other agents wholesaling?? What's your approach. I would love to chat with someone from VA and MD too!!

D'Aydra

Any other agents wholesaling?? What's your approach. I would love to chat with someone from VA and MD too!!

D'Aydra

Corby Goade · Answer

There's a lot here to comment one. Yes, wholesaling is legal, but many people attempting to do it don't truly understand what they are doing. Many wholesalers never close on a property, they assign a contract and are paid an assignment or finder's fee. As a realtor, there are likely laws in your state or ethics rules that you could be breaking, or at least blurring, by attempting to wholesale as a realtor. I'd sit down with your broker and ask them this very question. After all, if you get in to trouble, they'll likely be legally responsible for your actions as well.

Secondly- I never understand why realtors want to wholesale. Honestly- it's SO much work and, as I mentioned above, it can potentially put your license in danger. As a wholesaler, in order to get a property under contract, there's the advertising, the postcards, the negotiations, drumming up investors, etc, etc. As a realtor, your pay day can be just as good by simply telling people in your network that you can help them buy or sell a property. There are so few people that have a property that they are willing to wholesale, but literally everyone you know will be buying or selling a property at some point.

Karen Rittenhouse · Answer

@D'Aydra Allen - Yes. If you don't close on the transaction but assign the contract, that's an assignment. But for a wholesale deal, you close on the property and re-sell the house.

John Thedford · Answer

I would rather buy under market and hold. That is sustainable income. Flipping or wholesaling requires ongoing deals to keep a constant cash flow .

David Hall · Answer

I am in Michigan and dabbling in wholesaling as a licensed agent.  My broker said I should disclose to any potential seller that I am a licensed agent and that the offer am I presenting is probably not their highest offer possible if they listed the property.  I offer to list it for them, if they have time and money to hold it longer and wait for the market.  OR if they wanted a quick closing knowing that it is below market I can offer them cash and a quick closing.

The major grey area is marketing a property you don't have a contract to market.  As agents in Michigan all contracted properties to sell must be listed on the MLS (no pocket listings) and you must have a contract in place before marketing a property.  Is an assignable contract a property?  Some say, you are marketing the contract, not the property itself.  I've yet to see a court case on a decision on this.  Until then, I can see both sides.

Gregg Hutton · Answer

I can help on the wholesale side in NOVA

John Thedford · Answer

I would rather buy under market and hold. That is sustainable income. Flipping or wholesaling requires ongoing deals to keep a constant cash flow .

D'Aydra Allen · Answer

@Corby Goade THANK YOU! You just kept it real, and I appreciate it! LOL! I really needed to read this.

I think I've been trying to find a good place to help my hubby become comfortable without diving in head first and wholesaling was it. I want to dive a little deeper and I think I will continue working on acquiring an investment property while, as you mentioned, networking to assist others in buying and selling.

Karen Rittenhouse · Answer

@Chase Binnie I have no idea. They're typically not involved in any of the transaction, so it only applies if you are a broker in your own transaction - which I am not.

A thin line between Realtor & Investor...?

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