Wholesaling and being a Realtor (both)

[Bryan L.]

I recently got a question about this and I've seen it from time to time on the boards here.  I could probably write a full-length book on this subject, but I'll try to just hit a few high points here now.  Please add your comments or questions by replying and maybe I can go into more depth later.

First, let me disclose that I am both a Realtor and an investor (rehabber, flipper, wholesaler, bird-dog, landlord, etc.)  Second, please know that I am no attorney and can not give legal advice.  Third, your local and state laws may vary, so please check them out accordingly.  Fourth, in most every state, you will have to "hang your license" with a licensed broker and will have to abide by his/her rules as well as the laws.  Of course, if you don't like his/her rules, you could always go to another broker, or become one yourself.

Now, with all of that being said, being both a Realtor and an investor (of any type including a wholesaler) IS COMPATIBLE.  It can be done - legally, ethically, and morally.  And the two businesses can actually compliment each other (more on that later).  Here's some key points below:

- As a Realtor, unless and until you have an agency relationship with a buyer or seller, you do NOT owe them the responsibility to get them the best deal possible for them.  Check with your state and local laws on agency.  For example, if they are perfectly willing to sell you their home for 50-cents on the dollar and you know that you can flip it tomorrow for 70-cents on the dollar, you do NOT have to disclose that to them.  Yes, you do have to disclose to them that you are a Realtor, but that is so easy to do (again, check your local laws about specifics and details on disclosure).  And yes, you have to be truthful and honest with them, but we all should do that whether we are Realtors or not.  But, you are acting as a principal in the transaction, so you do NOT have to disclose information to them such as how high you might go (for example, 60-cents on the dollar), or how much you can flip the house for.  So, how do you do this?  What if they say something like "how much is my house worth?".  You answer as this: "Well, all houses are worth different amounts to different people.  To me, as a buyer, I can only pay you $25,000.  It will be worth more to some other people.  I buy houses to make a profit, so obviously I intend to do that.  Another option for you Mr./Mrs. Seller, if you want to get full dollar amount for your house, is that I could be your Realtor and list it for you.  But of course, it will likely take longer for it to sell for full value".

-  Having the two business compliment each other:  Here's what I do - all of my marketing for houses that I am trying to sell for someone else as their Realtor - it all includes a statement that says something like "I also buy houses (buyer/agent)".  And when people call me, I can possibly either buy their house if they have enough equity, OR I can maybe get their house as a listing if they are not motivated and/or don't have enough equity.