Wholesaling in a white hot RE marketplace.

[Patrick Britton]

I've been doing a fair bit of marketing to find properties at discounts and have received a good number of call backs.  the trouble is that all these people want fair market value, no matter how seemingly desperate they are to sell and no matter their condition.  Before you berate my marketing efforts you should know that in my area the inventory for SFRs is just over 1 month.  yup - home sell that fast here. 

so my question is this, would it be better to be a licensed broker and seek listings than a wholesaler seeking amazing deals in a market like the one i'm in? 

My gut feeling is yes based on my observation that wholesaling is quite popular in areas where prices are "low" or inventory is normal to somewhat high.  I'm thinking of areas in Florida, the entire Midwest, parts of AZ, NV and some NE states.  I don't see a lot of wholesaling activity in Manhattan, Key West, San Francisco, or the more desirable parts of Miami, DC, Seattle, Honolulu, Chicago, LA, etc.  in fact, there seems to be a direct correlation between wholesaling activity and average home price (an inverse correlation to be exact.) 

i'm curious to hear the opinions of others on this topic, especially real estate brokers. 

[Lars Olsen]

Hi Patrick, 

Good question. Though I'm relatively new to the real estate profession I did spend an awful lot of time researching and thinking through what I wanted to do in RE. 

Living and wanting to work in Chicago and its immediate surrounding area I figured that getting my license and working for a broker was my best bet. 

Now after a while on the job (we mainly sell investment properties in the $1mill to $30mill range) I have yet to see any of our clients get sweet wholesale deals. Even on not-so-awesome deals there plenty of activity, so I cannot imagine that in a market like this there would be enough "hidden gems" to make a living of off. But then again, I'm in a niche and know very little about what's beyond said niche. 

Also, I learned so much from taking my license and I feel like I'm more credible to buyers and sellers alike when I have that label. In short: I doubt you would ever regret getting your license. 

Not sure if that was helpful or not. 

Lars