Wholesaling as a Realtor! The DO's and Don'ts!!!!!!

[Tony Smith]

Hey BP fam! This is my very first post on a forum (ever) so I apologize in advance for it's poor structure.  I am a newly Licensed Realtor in Louisiana.  About 2 months after I received my license I found out about wholesaling and was blown away. I like the scalability of it and of course the margins.  Honesty is the best policy of course but it seems like the state laws make it hard to remain anonymous via mailings.  I mean, when qualifying seller leads and telling them your willing to give them close to 50% of the value of their home, some are, of course, blown away.  It doesn't seem like a smart idea to put your brokers name and number on a direct mail piece for that reason.  Wholesaling is, however, a numbers game and out of 100 leads that aren't interested in selling their home below value, you WILL run into someone who values convenience over price.  That's where the money is and wholesalers really do solve a major problem with these types of sellers.  So, I'll ask a few questions that I have and hopefully the BP squad can fill in the rest. 

Allrigght! Let's put the meat and potatoes on the table and discuss the do's and don'ts of wholesaling as a Realtor. 

1. Direct Mail Disclosure? - Doesn't seem ideal to put the brokers name on a we buy houses mailer.  Couldn't we disclose at first meeting and/or on purchase contract? 
2. Do Realtors have to split the assignment fee with their brokers?
3. State Contracts or Personalized Contracts?  
4. Would an unlicensed acquisitions manager/dispositions manager be considered engaging in real estate activity even if what we are selling is the contract to purchase. 
5. What is the correct way to market a "deal" or "Contract" for sale? Craigslist? Faceboo k? Cash Buyers List? 
6. Is it necessary to disclose the true or estimated current value of the sellers property when buying at a steep discount?  
7. Also, for people in the state of Louisiana where we have law of lesion.  How can we avoid Lesion Beyond Moiety? (law that states that a seller may rescind the sale of a property within a year for any reason if the buyer purchased it 50% or less of market value)

Does anyone know any good references of Realtors who are wholesaling already. Gurus? 

Thanks Ya'll

BAAMMMMM!!! ;)

[Braden Smith]

Hi @Tony Smith. I am both an investor and licensed realtor in the New Orleans area. 

Here are some answers for you:

1.  LREC requires you to disclose that you are an agent on all marketing pieces, including any and all "we buy houses" type ads. They must state "Owner/Licensed Agent". You also must disclose that you are a licensed agent upon first contact with anyone and everyone. The number rule for those of us that are licensed is disclose, disclose, disclose. 

2. That will be up to your broker. There are many brokers out there that frown upon wholesaling, as does LREC but it is legal. My broker doesn't require anything from me for properties I wholesale, but if I put any property on the MLS whether it be a wholetail or flip, I have to pay a $500 transaction fee to the brokerage.

3. I use the state contract for all MLS properties I make offers on, as that is required, but I have a separate contract I use for off market deals.

4.  That's a tricky situation and could create some issues. I dont have an acquisitions manager per se, but I work closely with a couple local wholesalers that serve in that function. At some point I will hire my someone for this.

5.  When it comes to marketing a property you have under contract the only legal way to do so is in private to your private buyers list. You cannot publicly market a property for sale that you do not own without a signed listing agreement. This is where many wholesalers get themselves in trouble. By publicly advertising/marketing a property for sale they are practicing real estate without a license, and subject to all fines and penalties associated with doing so.

6.  Not sure what you are asking with this one, but I think the answer is no.

7.  I have never had an issue with this and dont know anyone who has. I also have never found a property where I was able to but it at less than 50% of it's as is value.

Hope that info helps. Let me know if you have any other questions.

Good luck and happy investing!