Wholesaling with a real estate license

[Mike Ewing]

Hello Everyone,

I am just getting into REI and have had my own home remodeling business for the past 10 years. Originally the thought was to flip houses, I have 1 investor looking to invest 120,000. With the rehab knowledge it made sense to make additional money while putting our own style in a house. During my research, I found the BP site and have been hooked ever since. Its opened my eyes to so many options to invest in real estate and one I'm interested in is wholesaling. Wholesaling makes sense to me because I'm learning if I dont start with the right deal then we are started behind the eight ball. Why not make it my goal to find these properties, flip the ones that fit for me and wholesale the others to investors. Ive been looking at houses with an agent I'm learning that she is not quite finding what we are looking for. I know its tough to find the right deal on the MLS, especially when I don't get to things first. With that said been thinking about getting my RE license so I have access to certain opportunities but my question is does this cause any conflict with the wholesaling side of things or could it be a benefit (different options for a seller)?

[Andy Mirza]

@Mike Ewing I have a California real estate license and the law says that you need to disclose that you are an agent and include your license number on any advertising if you are doing anything involving the representation of someone else in a real estate transaction. Soliciting a listing, offering to represent a buyer or a seller fall into that category.

As a wholesaler you should be representing yourself. No conflict of interest, therefore, no need to put Realtor, or agent, or license number on your advertising. That would confuse people on what you're actually try to do. Your intent is to buy the property yourself (or at least put the property into contract for yourself and then assign the contract; you're still not representing anyone else). You're not trying to get paid a commission. All the transactions are principal to principal.

However, in CA, you still need to disclose to the other party (in this case) that you have a real estate license. During your conversation with the seller, you can casually mention at an appropriate time that "I have a real estate license but I'm buying directly from you as a principal." I always will put the verbiage "Buyer has a CA real estate license but is acting as a principal in this transaction. No commissions will be paid," in my Purchase Agreements. As long as the seller knows whats going on and you treat him or her right, there shouldn't be any problems and it's really not a big deal. Hope this helps.