Wholesaler vs Realtor : are they both the same?

[Gerald Harris]

I am not an agent as of yet, but I am seeing something that i need feedback on.

I am on several email lists of Wholesalers who have deals in my area and other areas?   

I personally do not see it? Many of these deals i am comping out with several services including MLS comps and I don't see the equity?

Many Wholesalers are trying to wholesale property but at close to retail.   

I think many Wholesalers would be better off getting a real estate license, placing that license with an investor friendly broker and making money?   

Some of these deals are lockup for over 2 to 3 months and they clearly are not wholesale deals.

Any thoughts?   

[Rich Hupper]

Wholesaling retail listings is tough.

This is what I think would have to happen.

1) the subject property would need 150+ days on market

2) lots of equity in the property. LTV should be less than 60% ( look at the registry of deeds for mortgage and deed information. Figure out what they purchased it for, what the mortgage is for and how long ago they got that deed. with this information you can deduce a rough mortgage balance. there is information online about interest rates through the past ).

3) a seller and seller's agent willing to work with a wholesaler who may assign the contract. ( you need to remember the wholesaler is a middle man, and the agent is also a middleman. seller's agent gets paid from the seller's net.  in this transaction there are too many middle men sucking the seller's equity, the seller may not like this ). You may want to offer the seller's agent some kind of perk when the deal closes. If you are licensed you can tell them they can keep the whole commission. Having seller's agent on your side could really help everything out ( they are the seller's fiduciary, so they are there to look out for the best interests of their client not YOU ). With that being said they still want to make a sale.

You could also forgo your wholesale fee for the real estate commission instead, but only if you are licensed ( only problem with this is your broker takes his share ).

4) The wholesaler also needs to have the seller and the seller's agent agree to allow showings to the wholesaler's buyer list.

5) The agreed price needs to be significantly less than what was originally asked for, this requires a motivated seller.

Usually the wholesalers buyer's list has already seen and passed on the property because it has been all over the web for 150+ days, so again your agreed purchase price would need to be very low that you surprise your buyer's list.

All in all a good wholesaler finds deals off market gets them under agreement at a price they know their buyers list will enjoy. A wholesaler is not an easy job. You are pounding the streets hard looking for off market stuff. You need to learn how to use the registry of deeds to your favor. You need to bang on doors and talk to strange people. Leave notes everywhere. Do huge mailing campaigns. Once you have something under agreement then you need to sell it. You do this enough you will have enough capital that you can start buying the properties you find off market and flipping them, or holding them for rental income. 

Anyone can wholesale. Like anything only a few actually get the "deals"