Is quitting job to work for a virtual wholesaler a bad idea?

[Michael Ansley]

I am strongly considering leaving my job to work for a virtual real estate wholesaler. They have systems in place to make this work. The pay is commission only. Is there anything I should consider before making this move?

[Charlie MacPherson]

@Michael Ansley It's a horrible idea.  First, understand that unlicensed wholesaling is illegal in most, if not all states.  Marketing a property that you do not already own is a license-required activity.  There's a reason that states across the country require real estate agents and brokers to be licensed.  There is no exception carved out for "I'm not selling real estate - I'm only marketing the contract" or any of the other BS excuses that wholesalers use to justify stealing equity from uninformed or desperate sellers.

There is no end to commission-only jobs in the world.  In fact, I'm in one now, brokering the sale of businesses.  I strongly suggest that you know a lot about whatever business you're going into if it's 100% commission.  You need to be highly competent or have a plan to get there quickly in order to be successful.  For example, the landscape is littered with real estate agents who got into the business because it looks so easy and the barriers to entry are so low.  Almost 90% are out of the business within 5 years.  A majority don't even make it 18 months from shiny new license to toes-up in the parking lot.

Leaving the relative security of a 9-5 W-2 job - especially one with benefits - is a risk that should be undertaken only with a solid plan for surviving startup.  For example, conventional wisdom says a Realtor should expect their first commission check 6 months after getting licensed.  In business brokering, it's about 9 months, so you need reserves to allow you to survive startup.  Remember to include the cost of health insurance if you're leaving that behind.  

The next question I'd ask myself is that if I really have 6+ months worth of living expenses saved up, is working for a wholesaler the best way to invest it?  Could that money be better deployed as a down payment on a rental?  Could you take a different kind of 100% commission job, like selling insurance?  Insurance agents who stick with it can make phenomenal money.  Or could you invest that money as a 10% down payment on an SBA loan to buy a business?

By the way, *every* wholesaler will tell you that they have "systems".  They learn them at any of the plethora of sleazy guru seminars or on YouTube.  They'll make amazing promises that make it sound like they're a fountain of spewing cash that you'll get a piece of.  Reality is going to be different - and they won't care a whit about watching you wither on the vine as you slowly run out of cash.

There are so many better opportunities out there than working in the shady world of unlicensed real estate brokering.  I suggest doing your homework to find a better one.