The 3%-6% wholesale deal.

[Justin Morgan]

Two Observations:

1. Many BP members ask about getting a RE license...

2. Many want to start out wholesaling properties.

You might find it helpful to think of a real estate license as a wholesale deal (3-6%).

I'm an investor first and a real estate agent second... when I have a property I can't pay the sellers desired price, I list it and sell it. When I have an approved short sale I can't pay the banks approved price, I sell it (often times getting BOTH sides (6%)), when I have a wholesale deal, I wholesale it. There are not many deals I miss, not many leads I can't convert (to something) when you have "the 3% wholesale deal" as a backup.

This will allow you to only buy when the deal is really sweet... otherwise 3% is alway a nice backup.

Hope that helps!.... what are your thoughts?

[Aaron Mazzrillo]

Originally posted by @Justin Morgan:

@Aaron Mazzrillo Liability as a real estate agent, not sure what you mean?

Buy the looks of your profile picture... you might mean liability as I'm a slave to the sellers?

I might need to rethink things as I have no time for fishing, not yet anyways!

Real estate agents get sued all the time. Why do you think it takes an 8 page contract in California just to make an offer? It's one page of the terms of the sale and 7 pages of "I'm just the agent so if the crap hits the fan, please don't sue me" disclosures.

Back in 2007 when the market was tanking, a home buyer sued the broker who sold him a house that quickly went underwater. The buyer's argument was that as a broker, the real estate agent is an expert and should have advised him of the market conditions. Now we have the Market Condition Advisory disclosure. If you're going to start taking listings, I highly recommend you get errors and omissions insurance. I'm not saying it isn't possible to make decent income going that route or adding that to your deal flow, but it is a lot of work. I just think more money can be made with so much less work focusing on the wholesale deals and letting the retail sellers deal with someone who likes to do open houses on Saturdays working for living.