Realtor interested in wholesaling FL. Would a broker agree?

Question

Hello, I am a Realtor in Florida who intends to wholesale and rehab properties as deals come along...I just don't want to "send the business across the street".

Would a broker typically be okay with me doing off-market deals while s/he is covering my liability for on-market residential deals? Does this create any conflict of interest or issues that I do not see from my point-of-view?

Pavlos Kasselouris · Answer

I have an inspiration of building a big real estate group that will handle my personal rentals, help others to invest, and act as a traditional brokerage in a smaller scale to basically work all the leads from my listings. I will get this summer my GC license too, so I can build a small group of tradesman to do my rehabs and standard maintenance for my clients.

Yes, I know that I'm not focusing to one thing, but I feel that I can leverage one department to grow the other...it will all rely on the team I will build.

Marty True · Answer

Cherish, that would be the right way to do it. Here in Florida, it has been a trend for brokers/agents to get on all the wholesalers' buyers lists and then they just add anywhere from 3% to $10k on top of the deal and send out to their own clients, adding zero value to the deal. This has made it so us buyers are not getting true "wholesale" deals because of the "daisy-chaining" of these deals.

Pavlos Kasselouris · Answer

I recently submitted a question to the legal department of the Florida Realtors Association (one of the perks of membership)

The only difference is that I just got my brokers license, so I skipped the part of getting permission from a broker.

The main thing was disclose disclose disclose, that you are a licensed agent. There is a form also in Form simplicity.

This disclosure should be on your advertising as well. Your brokerage etc..

Dalia S. · Answer

@Marty True thank you so mach for taking your time to explain this to me. Yes, there are lots of courses where they teaches you how to do "wholesaling" by doing nothing.  Sad that it is so difficult to find a good mentor who could teach you a true business. Thanks

Marty True · Answer

@Dalia S. There are a lot of gurus out there selling courses, teaching people how to do wholesaling unethically, illegally, and simply incorrectly. There are some wholesalers that are doing it right but unfortunately there is a much larger percentage that aren't - and it's hurting the relationship between wholesalers and cash buyers. And the sad part is... us cash buyers are the wholesalers' lifeblood.

Back when I was starting out, I thought about potentially wholesaling and then I saw some people were "joint-wholesaling" to maximize the buyer pool. The way it worked in those "JV" situations is that the original wholesaler agreed to share the assignment fee not let the secondary wholesaler add a fee on top. This was an ethical way to maximize the buyer reach and still present cash buyers with a good wholesale deal, with plenty of room left, for them to make money.

Unfortunately, because of greed, now most wholesalers' lists ALL say somewhere on the list "Agents and Wholesalers Add Your Fee" or something to that effect. And that is where the term "daisy-chaining" comes from, in regards to this new "headache" us cash buyers have now, when dealing with wholesalers.

I'm not sure why anyone thinks it's a good idea to blatantly show their lifeblood (cash buyers) that they no longer care about us making money, as long as they get their fees.

I've pretty much stopped working with wholesalers completely because of this.

I hope this helps and good luck to you in your new pursuit! And I'm glad to see that you have a good idea of how you should approach wholesaling!

Dalia S. · Answer

@Marty True, thank you very much.  This answer my question 100%.

Marty True · Answer

Hi @Dalia S. I'm not a wholesaler myself but as an investor, I have worked with various wholesalers. I'm not saying you have to do everything yourself, in that you could have a small team to help you. But yes, the process you mentioned above is pretty spot on.

Dalia S. · Answer

@Marty True I just wonder if I understood you correctly - so the right and legal way to do wholesaling would be to do everything yourself - find motivated seller, agree on the price, sign purchase agreement (with earnest money deposit),  find cash buyer, assign the contract and close on the deal. Do I understand it correctly?  I'm just learning, so would really appreciate your advise.  Thank you

Cherish Nicole · Answer

@Marty True Can you further explain? As a wholesaler, I would find distressed properties at deep discounts and ultimately assign the s&P agreement to an investor for an assignment fee.

Cherish Nicole · Answer

@Pavlos Kasselouris Im going to be getting my brokers license as well. What was your motivation? Do you plan to act in the form of a broker-realtor or open your own brokerage? @Meyah Manigoe I hope you're right. I wonder if a broker sees things the same way.

Realtor interested in wholesaling FL. Would a broker agree?

Most Popular Reply