Becoming wholesaler vs realtor

[Silas Lee]

Hey BP,    I have been learning about marketing for deals (intend to wholesale most and rehab a few) from here and and from Terry.  

Recently at a REI meeting, a realtor put a different perspective I didn't think of. Avg houses in my area is 600k. Avg houses in my surrounding metro area is 400k. Every retail sale realtor fee will be about the same as a "wholesaler fee" (10k net on avg in my area) in profit but with a larger client base since retail is more common. He advised I join his brokerage firm as an agent and is confident being an agent will be easier and more profitable (more deals) when using the same aggressive marketing.

This really did put my world upside down because I've always had the impression wholesaling was this glorious alternative way of generating income in real estate.

Has any wholesaler/realtors go through the same thing and have any experiences they can share?

[Mike Cumbie]

Hi @Silas Lee

Honestly I see this question all of the time and I do not understand why a Wholesaler would not just get licensed. They don't have to become a REALTOR or join the board (Without it no MLS). But to just get a license it is under $200 (at least here). There are plenty of brokers that will let you hang your license for a pittance (5%).
Personally I enjoy the full service one I am at, but for someone who wants to pretty much go it alone anyway, they are out there. If you are being a buyers agent (for one of your cash buyers) you can still go out and try and get houses at 40% of value for your client. (Actually legally you have to try and get the lowest price) You can agree to a fee with your client (the buyer) that is acceptable to you both. When you walk up to the door you have to disclose, but I bet it sounds a whole lot like what most wholesalers do anyways.

"Hi I am a licensed agent and I represent an investor who is interested in purchasing houses in the area just like yours. Were you interested in selling? We can offer a quick close and a cash purchase". "Here is a disclosure form letting you know that I am in fact working for a buyer and I am looking out for their interests, and your property appears to be a great fit for them"

Which every word of is 100% true, because you have a "Non-exclusive" right to represent with a cash buyer. The other kicker is once you talk to your buyer, if they decide they don't like it (Or your other cash buyers you have a non-exclusive right to represent). You can go to the homeowner and ask if you can try and bring them a buyer. "Would you mind if I put a sign in your yard? I still won't be asking for an exclusive from you, but if I bring you a buyer at that price can we agree on XYZ for commission?". OR "I did take it to my buyers and they were not interested, Would you be interested in listing with me where I would represent you in the transaction? We could get it listed on the MLS and I could market it among my channels so we can get it sold. If we do that I would have full disclosure to you and confidentiality etc etc"

You don't have to tie the house up, you do not need "Equitable interest" in the property. You don't have to mislead the sellers. You are allowed to put signs up and advertise to the general public (Of course you need to put your brokers logo etc on it and follow DOS regs). You can post on any site the house and your number. You are licensed, legit and bringing buyers and sellers together for an agreed upon commission. You also can advertise to more than just your buyers list.

Just my 2 cents and good luck in whatever you decide to do.