wholesaling in South Florida??

Question

I've been on BP a lot but i just recently created an account. I'm from Miami and I'm interested to hear from some of you down in SFL on the wholesaling market. I'm 22 years old and I'm currently a MLO. I've been doing non stop research and studying the past 2 months on wholesaling. I would love to get some input from you guys and any helpful information would be great even from those out of florida in regards to marketing and so on. Thank you in advance.

Brian Garrett · Answer

There's a lot of "wholesalers" around here but it's very hard to find ones that have real deals.

Most of them are just trying to middle man other peoples deals or even worse stuff right off the MLS.

I had a "wholesaler" send me a property yesterday that they were asking $248,500 for.

A quick search showed me the same property was already pending sale at $227,000 publicly.

If you do decide to get started wholesaling here are a few pieces of advice I have for you:

1. Provide an accurate ARV - Don't inflate this number to make the deal look better

2. Provide accurate comps - Make sure they are in line with the subject property

3. Own the contract - Find your own off-market deals to sell instead of trying to mark up other peoples deals

4. Rehab Estimate - If you're going to provide a rehab estimate make sure it's realistic don't just low ball it

5. Assignment Fee - We know you need to make money but you can't hit a grand slam every time so price it fairly

6. Be able to close - Make sure you have the ability to close on the property if you cannot wholesale it

This is just my two cents. There's a definitely a need for good wholesalers in the area. Best of luck!

David Rubio · Answer

Just get licensed or close on the property with hard/private money (shouldn't be hard to get if you have a good deal) then resell.

You can even make more money by wholetailing (patch and paint). Takes like one to two weeks and you're adding value to the property.

John Thedford · Answer

Most of these "wholesalers" are bottom of the barrel unlicensed idiots trying to middle-man deals. This is ILLEGAL and speaks to their integrity.

John Thedford · Answer

@Steve Cheslock and for others that don't fully understand assigning contracts:

The assignment clause was NEVER intended to allow people to act as unlicensed brokers. This practice has exploded across the country. Think about this: If you put a property under contract, then charge a fee to bring an end buyer, you ARE brokering real estate. You are legally representing the seller. If you assign, you are selling the property for the owner. If you cannot assign, you fail to sell the property for the owner. Some states have realized this gaping hole, and have dealt with it due to the number of victims being legally swindled and defrauded by these types of operators. In FL, brokering is:A BAR SALEAdvertisingBuyingAppraisingRentingSellingAuctioningLeasingExchangingFOR ANOTHER...so those operators that are using assignment clauses and charging middle man fees MUST be licensed in this state. If not, sooner or later they end up in the C&D "club". I make ALL my contracts assignable for MY benefit, I could legally assign, for a fee, to others but I do not. I make them assignable so I have options how to take title or maybe take on a partner.

So--one cannot legally advertise properties UNLESS licensed or they own it. One cannot legally work assigning contracts for a fee UNLESS licensed. There are lots of bottom of the barrel unlicensed brokers playing the game. They are easy to spot. Their ads often hide their full name (like John T for instance), they omit most contact info, etc...and operate under the cover of darkness to hide their information. These are the WORST because they KNOW it is illegal but don't care. I believe this is a glaring indication of their integrity.  These facts concern FLORIDA although a few other states have cracked down and other states will be dealing with it in the future.

Jay Hinrichs · Answer

in some markets this ship has simply sailed.. not enough distressed assets to sustain a viable business regardless of  license issues etc.  ERGO guys and gals trying to wholesale MLS listings which to me is a total joke.

and maybe that's what gurus are teaching these days.. I got a call from some gal who wanted to tie up a few of my Oregon lots .. she had to have just been through a class.. when I asked her why she was doing this it was simply to make a fee.. I said why would I do that they are on MLS.. why do I need you. she hung up.  Plus I threatened to turn her into the DRE because in Oregon its totally illegal to market something you don't own.

John Thedford · Answer

FL statutes 475.42 and 475.43.

Steve Cheslock · Answer

@John Thedford... I'm just curious what is illegal about it?  I'm not in your state so I'm just curious for my own education.  If they are able to obtain an assignable purchase agreement executed by the seller that gives them equitable rights what's illegal about that?

Take out the fact that they may be "idiots" or doing a poor job(which is another story and I agree a ethical issue), but being and idiot and actually doing something illegal are two different things.

John Thedford · Answer

You cannot legally market properties unless you are licensed or own them.

Christopher Gandara · Answer

Thank you all for the info you guys have provided. Much appreciated

Jack V. Ospina · Answer

I agree with @Brian Garrett 100%. I have a bunch of wholesalers send me a list of properties and a good chunk of those properties  are on the MLS. I have access to all MLS properties and I can contact the sellers agent on my own. It's ridiculous. I would add to @Christopher Gandara to have some money saved up. Even though there is a lot of talk about no money down. You always need money in real estate to be safe. Just think about the escrow deposit you will need to put down.

wholesaling in South Florida??

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