Wholesaling "products"

Wholesaling
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Wholesaling "products"

Carlos O.
Investor · Huntington beach, CA · Member since 2014 · 99 posts · 17 votes

Hello all,

I am interested in wholesaling and looking for more information about it. You see, wholesaling to me means more than just than just getting a property under contract and selling it of for a profit. I want to do more than that. I have two main reasons. 1.  I expect to run into a lot of properties that just won't meet the wholesaling criteria. I'm thinking there has to be things I can do to help the client and still make money by helping them.  2. One of my goals is to build a reputation as a problem solver, even if that doesn't involve selling a house.

I've heard of things like sub2 deals, which I am not very familiar with. I can direct the seller to a real estate agent and make some money off the lead. What else can I offer to a client that will provide value for them and profit for me? To put my question in a different way, what do you guys do when you run into clients that don't fit the wholesaling criteria?

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Joseph Ball
Residential Real Estate Agent · Groveland, FL · Member since 2012 · 504 posts · 395 votes
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If you expect a shared commission from a Real Estate Agent, you had better get a license. It's a good idea anyway, for the educational benefits.

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  • Joseph Ball
    Residential Real Estate Agent · Groveland, FL · Member since 2012 · 504 posts · 395 votes
    11y

    If you expect a shared commission from a Real Estate Agent, you had better get a license. It's a good idea anyway, for the educational benefits.

    1Reply
  • Carlos O.
    OP
    Investor · Huntington beach, CA · Member since 2014 · 99 posts · 17 votes
    11y
    Originally posted by @Joseph Ball:

    If you expect a shared commission from a Real Estate Agent, you had better get a license. It's a good idea anyway, for the educational benefits.

    Based on somewhat I've heard, it costs hundreds if not a couple of thousands to be an REA in CA. Also, can you elaborate on why I would need a license in order to get a shared commission? I was thinking more in terms of selling the lead rather than getting a shared commission, but that you've brought up a good point, it might be better to go for the shared commission once I establish a good relationship with a REA in my area.

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  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    11y

    Hey Carlos,

    I think it's a great idea that your goal is to a be "problem solver" and not just a one-trick pony.  You'll definitely be able to provide a better service to your customers that way, and ultimately be able to help more people and close more deals.  The latest BP Podcast 106 with Mike Sumsky actually talks about that very same idea.

    As for your question about @Joseph Ball 's comment, it is generally illegal for a licensed agent to share a commision or pay a fee for a referral to an unlicensed individual (i.e. bird dog).  I'm sure that's why he recommended for you to get a license if that was your intent.

    Best of luck to you.

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
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    Let me guess, you've never been in business for yourself before, you read some guru stuff and listened to podcasts, read forums and blogs, haven't read a real estate text book that agents use to pass their exams, you're a creative guy, but don't know business law or real estate law, don't know laws of agency at a state or federal level or what RE agents and brokers must or must not do.

    I agree with Joseph's suggestion, at least take an agent's course, at the very least get the materials they use to learn real estate.

    Learn real estate basics, you'll learn title interests, encumbrances, about liens, how title is passed, what different deeds convey and then you'll understand more about subject-to transactions than most know. Learn the basic financing rules and requirements, you'll understand how to get others financed to buy or sell. Learn real estate laws and applicable regulations and you might not go to jail, get fined, or destroy your reputation before you get started. Might keep you name from being mud with Realtors, RE attorneys, title and closing companies. Real investors might even deal with you with confidence.

    A building has a foundation, your business venture needs a foundation, that foundation is an education. Studying how to move the pea under the shell might be fun, it doesn't teach you anything about the pea or the rules of using the shells.

    I know, younger folks starting out spent all that time going to school and you hit an age where you feel like lighting the business world on fire with enthusiasm, what a bummer to be told you need to keep learning to make a good living! Then find out that gurus and others out there scam you calling stuff an education and lying to you, dang, what a bummer reality can be! :)   

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  • Joseph Ball
    Residential Real Estate Agent · Groveland, FL · Member since 2012 · 504 posts · 395 votes
    11y

    You may think we are being hard on you, but @Bill Gulley is correct-in Florida, anyway. It is not legal for an agent or broker to share a commission with an unlicensed person.

    Please accept these constructive comments in the context they are offered. We are trying to help.

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  • Gary Erdoglyan
    Property Manager · Los Angeles, CA · Member since 2014 · 79 posts · 15 votes
    11y

    @Carlos O. You should think about getting your license bud.  I started out not knowing  crap about real estate but had the drive to make money at it, so i went and got my license(actually i just passed the test a week ago, i'm waiting on my license to come), learned a lot by studying the Principals and Law course i took, i'm not saying i know a lot about real estate but a lot more than before i took the State Exam, it's worth it in my opinion.

    Let me know if you want to get the license i will be happy to show you the websites i used to help study for it!

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  • Shahara S.
    Philadelphia, PA · Member since 2014 · 1 post · 0 votes
    11y
    Originally posted by @Gary Erdoglyan:

    @Carlos O. You should think about getting your license bud.  I started out not knowing  crap about real estate but had the drive to make money at it, so i went and got my license(actually i just passed the test a week ago, i'm waiting on my license to come), learned a lot by studying the Principals and Law course i took, i'm not saying i know a lot about real estate but a lot more than before i took the State Exam, it's worth it in my opinion.

    Let me know if you want to get the license i will be happy to show you the websites i used to help study for it!

    @Carlos  O.  -- I will be starting my exam training in the coming weeks. Any advice or websites you could share would be helpful to this new investor :)

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    11y
    Originally posted by @Shahara S.:
    Originally posted by @Gary Erdoglyan:

    @Carlos O. You should think about getting your license bud.  I started out not knowing  crap about real estate but had the drive to make money at it, so i went and got my license(actually i just passed the test a week ago, i'm waiting on my license to come), learned a lot by studying the Principals and Law course i took, i'm not saying i know a lot about real estate but a lot more than before i took the State Exam, it's worth it in my opinion.

    Let me know if you want to get the license i will be happy to show you the websites i used to help study for it!

    @Carlos  O.  -- I will be starting my exam training in the coming weeks. Any advice or websites you could share would be helpful to this new investor :)

    Hi, welcome to BP!

    I suggest, really do, that you stay away from trying to read investor stuff, especially guru stuff as it will mess up your mind in learning the basics, you'll get bad and incorrect information on the internet from the general public. Have a clear mind walking into your RE class.

    Of course, you can read my statements LOL! Find out what your text materials will be and get the copy a couple weeks ahead of time if you can, you can lightly read and study and can be ahead of the curve in class. Skip what you may not grasp, let the instructor teach it.

    After you get the basics, all this investor stuff falls in place. Methods may not be taught in the beginning, what you learn is the basis for everything done, what rights are held, how they are assigned, transferred, what rights are conveyed by an option, why tenants can't do some things.....it just makes everything come together when you read methods used after you get the basics.

    Good luck :)

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  • William Byers
    Engineer · Jacksonville, FL · Member since 2013 · 182 posts · 66 votes
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    @Carlos O. 

    As @Bill Gulley so eloquently stated, you have to understand the problem in order to be a problem solver.  True knowledge of real estate doesn't happen overnight (or over a boot camp weekend).  Each state is governed by laws that prohibit those that are unlicensed from making money off a real estate transaction for which they are not a principal (buyer or seller). 

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
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    LOL, I wasn't being tough, I was being mature!  :)

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
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  • Carlos O.
    OP
    Investor · Huntington beach, CA · Member since 2014 · 99 posts · 17 votes
    11y

    @Kyle J. Thanks for pointing me to that podcast, I will definitely check it out.

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  • Carlos O.
    OP
    Investor · Huntington beach, CA · Member since 2014 · 99 posts · 17 votes
    11y

    @Bill Gulley 

    I am not offended in the slightest bit, just a bit disappointed that I now have another large task to add to my RE journey. Thanks for being honest and truthful; leave the sugarcoating for the kids, lol. I will read up real estate. Funny thing, I was actually planning on taking a RE course at my community college this semester, but it was full, including the wait list! 

    0Reply
  • Carlos O.
    OP
    Investor · Huntington beach, CA · Member since 2014 · 99 posts · 17 votes
    11y

    @Gary Erdoglyan Please do share the websites you used to study. I'll start off there.

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  • Gary Erdoglyan
    Property Manager · Los Angeles, CA · Member since 2014 · 79 posts · 15 votes
    11y

    This online school helped me get threw the Principle, Practice, and Law courses that we have to take before we take the State Exam.

    http://www.eprealestateschool.com/

    Once your done with does, take this live crash course class to get ready for the state exam.

    https://duanegomer.biz/exam-prep/calendar.asp

    Good Luck!

    1Reply
  • Stanley Okazaki
    Residential Real Estate Agent · The Woodlands, TX · Member since 2015 · 109 posts · 40 votes
    11y

    @Carlos O. I love the way you're thinking ahead. As for having different options available for you and the seller, I feel the best thing would be to get your RE license. It's understandable if you don't have the money to get/maintain a RE license right now but down the road when you start making more money a RE license will  open up so many new doors. 

    For example: 

    You're sitting at the kitchen table of a motivated seller. For whatever reason you guys cannot agree on a price. You offer that seller a second option- You list the house for sale & offer to cut your commission in half. From here, surely they'll need a new place to live so you can offer to help them find another home or lease out a place. 

    Sorry if this comment seems all over the place, my mind is in 9 places at once. I just had to give me 2 cents.

    1Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y

    With your license you have choices in California 

    The CA Dept  of RE is very strict about you talking to Seller about their house problem

    Once you have your license you can

    1 buy on sub 2 and a note

    2 buy on a wrap - all inclusive trust deed

    3 buy on a lease w option, then sandwhich or assign

    4 buy on an installment sale if no liens

    5 do a jv with a seller if minor rehab

    6 do a option flip

    7 list it

    Listen to what @Bill Gulley said please.

    1Reply
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