Any agents in NJ working wholesale deals?

Question

Hey guys,

I am working with a client who is interested in flipping a wholesale contract to a flipper. I have not worked a wholesale deal as a Realtor, but I am somewhat familiar with the process. The reason I want to help this couple is because they want to invest in rental properties in the future. Do any Realtors on here have experience with this business model? My understanding is that although I cannot collect a commission on a wholesale transaction, I can earn multiple commissions assuming I find the end buyer and they decide to hire me on the listing side post rehab.

They are sending me MLS listings and want me to send out multiple offers, some which are as low as .35 on the dollar. I have educated my client and made them aware of some of the drawbacks of coming in this low with essentially no basis. I am currently searching the MLS for properties that are good candidates to wholesale, but I am not 100% this is the best approach. I have a few questions that hopefully some fellow agents on here can answer.

1. Is it possible to find properties to wholesale on the MLS? If they are actively listed, would a listing agent be open to this sort of arrangement, and would it effect their commission at all?

2. What kind of properties are best to target for this? Should I be setting certain filters like: Notice of default, absentee owner purchase at least 10 years ago, etc. Anything specific that would make a prospective seller more receptive to our arrangement would be helpful.

3. Can you legally include "and/or assigns" in an offer to purchase in New Jersey? If not, what is the workaround to this?

4. My understanding is that off-market deals leave more room for profit and although more difficult to find, these would be the best approach to take. I know I would have to send out marketing pieces and start talking to sellers on behalf of my clients, all while not collecting a commission.  Is it worth it for me to do all this work for a modest marketing fee?

Any other tips on how I can best serve this client and build a strong relationship with them would be greatly appreciated!

If you are an agent in the South Jersey area who has experience working with investors, I would love to connect!

Thanks!

Justin

Brett Schoenfelder · Answer

Justin,

Am I understanding correctly... hypothetically... you are going to bust your butt finding these folks "wholesale" deals on the MLS, collect a teensy weensy commission off the tiny purchase price. Help them wholesale it to a flipper (with no guarantee of the listing on the back end) and no commission? All because you want to get a commission on possible, but not guaranteed rentals down the road?

Just STOP right where you are!... and ask yourself... "If I find a deal on the MLS and successfully negotiate down to pennies on the dollar, WHY am I letting someone else make all this profit?!? Why don't I flip the property myself?!? I'm the one doing all the hard work!!"

Julian Colvard · Answer

as long as you disclose that you plan on possibly a signing the contract and that you are a licensed realtor, there's no problem with anything.

The name of the game is disclosure. As long as it's on paper and the other party agrees by signing that piece of paper, you are protected.

Kyle McCann · Answer

Justin,

You should let the wholesalers stick to sourcing and marketing their own deals.  They exist to find deals that aren't currently on the MLS.  That said, it is a good idea to network with as many wholesalers as possible if you are already working with investors.  Most wholesalers will give you a fee if you bring a buyer to them; so get on their distribution lists.  If you have a good relationship with the buyer, you can then get the listing after the flip.

If your clients endgame is to get into rental properties, and not wholesaling, show your value by helping them expedite that process.

Cheers.

Lydia R. · Answer

@Justin Pencook While I am not an agent and I dont live in your area I will give you my take on this as a wholesaler. I have no idea why you would do all this work for essentially no money. Wholesaling properties from the MLS is a really difficult (and if done poorly very sleazy) thing to do. The reason that investors agree to pay an assignment fee is because the wholesaler has marketed, sourced and negotiated a great off market deal that the investor never wouldve had access to otherwise. Anyone can fling lowball offers to properties that are listed on the MLS. What agent would let their client accept an offer from someone who wasnt even going to close on the deal? I would say back away from that idea right now. Secondly the idea that the end buyer is going to use you to list the property? Thats also probably not going to happen. Lots of investors have a realtor that they already work with and that they have negotiated a reduced commission in exchange for listing all their properties. So you are basically signing up to do all this work for these people with no guarantee that you are going to make any money. Now this is just my personal bias as a wholesaler, Id suggest you do the marketing yourself and wholesale the deals that are wholesaleable and list all the properties that could sell on the MLS. That is just my two cents. Dont be someone elses workhorse, do the work yourself and reap the benefits.

Any agents in NJ working wholesale deals?

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