Being An Agent vs. Wholesaling For A Newbie?

Question

Hello all! This is my first post on BP and I am SO excited to be writing this. It’s great to meet you all.

I am a 22 y/o native Floridian who has been putting off my desire to jump into Real Estate for far too long. In July last year I earned my state license (I haven’t used it yet, that’s a long story) and it wasn’t until a while after earning my license that I learned about Wholesaling.

So my question is: based on your experience in the industry, do you think it would be wiser to join a broker and start as an agent or go the wholesaling route?

I should also mention that my future aspirations are to be an investor in residential and multi family and to (fingers crossed) move to the Seattle area and work as a developer there. I have a vision for where I want to be in life in say, 10 or 20 years, however I haven’t found the path to get there yet.

Any advice or guidance at all is genuinely greatly appreciated for this newbie as I am settled on making Real Estate my life’s work. Thank you for responding and I hope you all have a lovely week.

I’ll see you around 🤘

-Samuel Jolicoeur

Michael Haas · Answer

@Samuel Jolicoeur I work as both a Realtor and a Wholesaler and in my opinion Wholesaling is harder, especially for someone who is new. The profit margins are thicker in wholesaling, so its still a great option, but for folks that are getting started I recommend working as a investor-focused real estate agent first. Good luck!

Nolan C. · Answer

@Samuel JolicoeurSamuel, I’m a licensed realtor and work for a wholesale brokerage here in Tampa (my brokerage requires you to be licensed). I’ve wholesaled a couple of deals in your territory.I was in your shoes about a year and a half ago, deciding which route to go. I chose to focus on wholesaling and am glad I did. Both wholesaling and being a retail agent are time consuming so you have to keep your end goal in mind.If you have any questions feel free to reach out, hope to do a deal together in the future!

John Slater · Answer

Hi Samuel, congrats and welcome. I would absolutely hang your license with a broker, but, find a broker that is good with your investing side. not all brokers like it, liability etc, but many do and some have their REI side to learn as well, but for sure having the ability to work both sides of the business was for a me a game changer.

John Slater · Answer

Actually, you can... I do, many others do, and I believe Florida has laws/rules about HAVE to be licensed to wholesale..(not from Florida so don't quote me on that). But at the end of the day it comes down to the broker's acceptance. As a broker, I would be ok my agents doing it, as long as they are disclosing, and as long as I was somewhat confident in their knowledge and ability.

Don Konipol · Answer

@Samuel JolicoeurThere are plenty of jobs, careers and businesses in the real estate field other than wholesaling or brokerage. Real estate INVESTING covers a lot of territory. Everything from the owner of a single SFR he rents out to major landlords who own (and owe ) billions of $ in real property. The questions are (1) where on this spectrum do you want to be and (2) what is the best way to get there? Although I personally DID start as a commercial real estate broker (in 1978!), that’s just an ok way to start. Not great, just ok. Better is to work ( probably) entry level at a REIT, real estate private equity fund, real estate related hedge fund, property syndicator, real estate developer, land developer, or real estate mutual fund. Best of all is to (assume you possess an undergraduate degree) obtain a specialized masters degree in real estate. Perhaps almost as good is to obtain a graduate certificate in real estate from a recognized university. NYU, Harvard, MIT, Florida, Texas A and M all offer this option. It’s very popular now days to dis formal education. You can obtain somewhat of the same thing for free, but it takes tremendous motivation, dedication, time etc. And a key ingredient will be missing. The interaction you get with other students and professors, some say where the real learning takes place, and certainly where future hopefully very profitable contacts are initially formed and where you could jumpstart your career leaping over others to obtain highly sought after positions within the industry. BP is a great resource - for those interested in a personal real property investment portfolio of SFR, or small commercial properties. But there’s a world of real estate beyond that; if your dreams and ambition is to enter the realm of 40 story office buildings, city block redevelopment, 500 acre mixed use projects or 300 room luxury central city hotels, then starting with an investment in a $80,000duplex is probably not going to get you there today. It might have 50 years ago, but that was a far different era. If your ambition is a little more modest, say to own enough real property with enough cash flow to support a middle or upper middle class life style somewhere reasonably priced, then you will need to acquire three things. Capital to make property purchases and build on; education to know how and what and when, and credentials so you can get property acquisitions financed. Of the three the far and away most important is education for the resultant knowledge. With nothing but knowledge there exist (rare, but they do exist) individuals that can pull off PROFITABLE property acquisitions WITHOUT capital of their own and without outstanding credentials. It’s not easy, the “circumstances” need to be right, but it is done. Good luck and let us know what you real estate “dreams” are.

Paul De Luca · Answer

It depends - do you want to primarily work with buyers and sellers as their agent? Since you want to invest in multi-family you could become an investor-friendly agent to help other investors and then get into investing yourself. You could also do that while also wholesaling at the same time, but I'm also a believer in being focused on one thing when getting started to build your experience and credibility faster. The saying goes "A person who chases two rabbits catches neither."If you primarily want to work with real estate investors on your own and representing yourself, wholesaling might be the best bet for you. Being an investor-friendly agent vs wholesaler require different skillsets, although the fundamentals are similar but the mechanics for doing deals will be different.I think the best move for you would be to join a brokerage that is investor-friendly & also offers training in wholesaling or is at least friendly toward it. Try both out and see which is a better fit for you.

Lawrence Potts · Answer

Hey @Samuel Jolicoeur,I think you could do both. I’d highly encourage you to read up on Florida law though about wholesaling.Here’s the thing with being an agent and/or wholesaler…they both require a lot of work and deserve a lot of your time. Don’t expect to be great at both if you do both. And don’t expect to be great at either one for a while. Some agents wait over a year to get their first transaction done. And some wholesalers wait the same amount to get their first deal done.Both come with liabilities and risk. As an agent, those are obvious. I think the risks and liabilities of wholesaling are always glossed over. I think wholesaling is A LOT RISKIER especially if you have never flipped a home or owned a rental. Wholesaling is where all of the experienced flippers and investors want to be: they’ve spent years perfecting their lead source, their network of contractors and lenders, their buyer’s funnel, etc., and they can leverage those skills and systems to earn through wholesaling without the risk that flipping has. People see wholesaling as a way to get started because they believe the barrier of entry is so low; you can get started wholesaling but you need to know your flip numbers better than a flipper, have the reserves to close if your buyers back out, the network of lenders to provide that funding, have mastered marketing to find the buyers, and the knowledge of contracts to successfully wholesale through title, to name a few of the skills needed. It’s A LOT.What I’d do is partner with someone who is a wholesaler and learn one department of that business and learn and work and build that skill and then move to the next department t and the next until you’ve got it down. It could take years. Be patient. Meanwhile, you are working under a brokerage that understands investing and you learn how real estate transactions work so it betters you as an agent, investor, and future wholesaler.Expand your timeline of when you expect to be making money and take the time to learn and grow. Be patient. Take your time. You are young and 5 years may seem like a long time, but it goes so fast and you’ll be much better for it.Hope that helps

Leo R. · Answer

@Samuel Jolicoeur becoming an agent or wholesaler so that you can become a real estate investor is a bit like becoming an NFL quarterback so that you can become an NBA basketball player. Are there some overlapping skills? Sure. But, if your goal is to play basketball in the NBA, practice basketball (not football).If your goal is to be a real estate investor, instead of putting all your time, energy, and money into becoming an agent or a wholesaler, put all all those resources into investing in real estate. Specifically, house hacking is arguably the best way to get started in REI. Once you're a successful real estate investor, the agents and wholesalers will be working for you.Good luck out there!

Samuel Jolicoeur · Answer

Thank you SO MUCH for your response sir, you really laid it all out on the table; most insightful advice I’ve ever been given honestly. My dream is to have a specialized masters degree (or, I want to be the first person in my family with a doctorate) and use it to work in a REIT. or a developer making large mixed-use property. Fundamentally, I want to help fix our countries chronic short supply of housing by bringing in new construction that we can make more energy efficient and cost effective. And I want to have my own investment portfolio to fund my education. In 20 years, I see myself working across the country as a higher-up in one of these large developers or REIT’s making acquisitions, talking to zoning boards, getting financing, and building the future. I will read and re-read what you said, and make a plan for my future. I’m about to start modestly as an agent for Keller Williams in my local market so that I can start to meet people and learn the basics (and hopefully make some good money too). Have a fantastic day. -Samuel Jolicoeur

Marie Tan · Answer

Be both, and get a team for your wholesaling career will help a lot.