All Forum Posts by: Karl Krentzel

Well, as a licensed Realtor®/Broker and Investor myself, I can assure you, nothing is further from the truth! You absolutely CAN wholesale a MLS Deal. Please allow me to answer your questions I see...

Question: "How would a wholesaler take down a property with an agent involved using the standard wholesale model of "flipping" the contract and not actually closing on the deal using their own funds?"

Answer:  The same way you would in any other transaction.  If assignments are allowed in your State (most of them allow it) then you may simply assign the property.  I write into my contract "Buyer reserves the right to lease, rent, repair, assign, or sell for profit."   

When written into your additional terms of the State Contract, any written words that are agreed to by the parties are legally binding, and supersede the boilerplate language of the contract. (Basic contract law) 

If your State doesn't allow assignments or makes them very difficult to do (Ohio) then you may still double close.  You may use transactional funding, or hard money if that is your choice.  

Many times a "wet" closing is required, (Meaning that you must bring your own money via transactional funding) and other times, you can do what is called a "Dry" closing.  Meaning that you have no money of your own in the deal and you use your End Use buyer's money to close.  

Question: "Can this transaction be done in a traditional wholesale sense."

Answer: Absolutely. In the case of flipping MLS Property; it is a question of the language that you use with the agent. In my Script book (Free) I have scripts available that you can use to deal with the agent..  

Trust me.  As an agent, I flip MLS property, and know PLENTY of other UNLICENSED who do too.  How?  Simple.

• Not all homeowners want the most. 
• The value is, what the value is.  The listing commissions are already figured into the deal.
• If you negotiate aggressively (you can do this!) then you can find motivated Sellers on the MLS who will then be great leads for you.

Here is a horrible video I did a number of years ago and put on YouTube about a Short sale that was on MLS that I flipped with no cash, and no credit.

It was listed for $225,000, I bought it for $115,000, and sold it for $125,000 a few days later.

You can't say that you can't flip MLS properties because "the agent will stand in the way".

They didn't stand in the way when I made my $110,000 offer on a $225,000 fourplex. 

In fact, they went in and got the deal done FOR me.  

It's all in the way you do it!

Have a powerful Sales Day! 

 Great question @Carson! 

I recently wrote an article [REMOVED] In the article, I outline both the benefits, as well as some of the drawbacks of having your license. 

One of the obvious differences (I don't choose to think of them as disadvantages) is that you must disclose two separate things. First, you must disclose the fact that you are acting on your own behalf (NAR Code of Ethics Article 4), and Second, you must disclose the true value of the home, and not deceive or mislead the public in any way about it's value (Article 1). 

Aside from the fact that you wouldn't want to mislead anyone anyway, and you wouldn't have any problem telling someone you were an agent, there are tons of benefits.  

However, I will caution you.  Be very cautious when listening to those who are unlicensed try to tell you how to do certain things in your market.  Their methods are not necessarily always in line with the spirit of the Code of Ethics.  Our Rules, our Standards are higher.  

The law treats you differently (punishes you more severely) than that of the unlicensed.  In my humble opinion, it is an honor to be both a Realtor® and Investor.  You get the best of both worlds. 

Have a Powerful Sales Day! 

Great question @Christopher!

I was recently asked that question on my podcast (Episode 364 A Real Estate Business Plan for Investing Realtors®) "What Would I Do If I were in Your Shoes Today?"

I answered the question in just a few minutes, but in summary, I talk about the need for you to understand the difference between Active and Passive marketing, as well as a plan if I were to start all over again with little money and little contacts.

It's important (I think), for you to get as much skills training on what to say, and how to say it so that you have the confidence to know what to do when the time comes.  

Nothing sucks more than generating a great lead, only to screw it up because you didn't know what to say or do.  Therefore, in my mind, if I were to start all over again, I would work on getting my sales skills in order.  

Zig Ziglar wrote the best book in my mind on the subject of sales, "Secrets of Closing The Sale" and if I were to recommend one good book on that topic, that's what I would do!

Have A Powerful Sales Day!!

MOD EDIT:  Removed self-promotional link.

 Great question!

Yes of course you can!  They are just like any other Seller.  Some are more motivated than others, and some are more experienced than others.  

Be careful to paint with broad brushes entire swaths of demographics as "want too much" or "Generally want to make the most possible". 

The cold hard reality is that for some (not all) people, they are thrust into a situation where they need to sell their home FSBO and do not know what else to do other than put a sign in the yard and run a Craigslist ad.

I've spent 18 years as a Licensed Realtor® and Investor who "wholesales" them, and teaches other agents how to do it.   Trust me when I tell you that not all leads are created equally.  If you spend the time to learn how to talk to them, and approach them in the right way, this can be a "win win" for both of you!

Have A Powerful Sales Day! 

Every FSBO Wants The Most...

Have you ever told yourself that lie?  

How about this one?  "FSBO's aren't ever motivated enough to do a wholesale deal?"

If you have ever told yourself this or are wondering how to add 25 deals to your production in 2015, then read on!

You Don't Know Me...

I appreciate you may not know who I am.  Who I am isn't really that important.  What I have to share with you IS however.  

In short, my name is Karl Krentzel, and for nearly 19 years I have been an Investing Realtor® here in the State of Arizona.  

During that time, I've worked with hundreds, if not thousands of FSBO's and have picked up a few techniques that have helped to build a successful Real Estate business. So much so, that I was able to complete 75 transactions in a single year using only one assistant... working 5 days a week, and no weekends.

Here's What's Important

I'm just a dude like you.  Struggling to kick a lot of *** in my business and make a better life for myself and my family.  

I was afraid to call FSBO's because I had a lot of those same "self limiting beliefs".  

Then, I learned techniques, and tactics that anyone could use and build a business for themselves.

I won't lie.  It's not easy.  So if you are looking for easy money, then this isn't the webinar for you.  

If you are looking for profit however, then this webinar is exactly for you!

Here's What You Will Learn 

In this Complimentary Webinar called "FSBO Domination!" I will share with you in one hour as much as I can possibly shove in.  

Everything from having a Powerful Mindset, the Plan to identify, and source your leads, as well as the Presentations you will need to win!

The cost?  Zero.  Nada.  Zip.  Zilch. 

Now, I know what you are thinking... (I've been on the other end of the ad too you know)

What's the catch?

No catch.  No Sales pitches.  Nothing.

Okaaayyyy.....

So If there is no sales job, no catch, and no cost, then why the heck am I doing this?  

Simple.  

For over 10 years, I've been helping agents, and investors succeed in their business.  It's part of my #PayItForward mentality.  

You can see evidence of this on my various YouTube Channels, Podcasts, and Blogs...

I will record this webinar, and then I will place it in my library of files for my private clients. 

That's why there aren't any "sales jobs." in this webinar.... you get to sit "ringside" while I teach my clients everything I know that is useful about FSBO's.

What If I Can't Make It? 

The great thing about technology, is that the system I have will recognize if you didn't attend, and will automatically send you a copy!   So either way, take time to register now for this awesome, Mountain Dew Caffeine fueled webinar this Wednesday the 11th at Noon MST!  

Thanks @Brandon and @Grace... 

The good news is... it DOES work in CT... You see, there are a few things you need to know...

1.  Your Broker will not have a problem buying on your own accord.  They couldn't.. otherwise no agent who works for them could sell their own home. They will most likely require you to put some form of E&O Insurance on the transaction (even though E&O will not generally cover an assignment of contract nor double close by self agent).

Pay it anyway.  It's a cheap cost of "doing business" and it gives the Broker some cheese.

2.  The overarching theme you need to remember is that you are an American Citizen first, a Realtor® second.  Therefore, you can act on your own behalf, but you have willingly agreed to be held by a separate set of standards (The National Association of Realtors® Code of Ethics).  

Nothing in those Codes of Ethics prevents you from acting on your own behalf.  In fact, if anything, the Code itself tells you how to do it (Article 4).   Therefore, there is nothing in State law, nor the Code of Ethics that prevents you from acting as a Principal to the transaction, which is what we are really talking about after all.

3.  You are a Realtor®.  Be wary of those who try to teach you how to Invest, (Whether it be rehabbing, notes, wholesaling, or other) who are not Realtors® or have never been Realtors®.  

Our standards of conduct and expected practices are required to be a certain way.  Those ways, when done properly, result in very powerful conclusion for a Seller or Buyer.  

It is my belief that as an Agent/Investor, you are in a uniquely powerful position to help the homeowner.  Whether it be by acting on your own behalf as a wholesaler, rehabber, or landlord.... 

Or on THEIR Behalf as an agent for them with all the fiduciary responsibilities that go along with it.  

Remember, you cannot be both.  An Agent, as well as a Principal in the same transaction (without their subsequent agreement in writing, which would be stupid anyway.) 

Have a Powerful Sales Day!!

 Great question Grace!

While I am no attorney, I am a Realtor® and Licensed Broker in the State of Arizona who does wholesale, and helps people across the country with the sales skills to do the same.  

Your ability to put a property under contract and subsequently sell it is generally protected under the Contract Clause of the Constitution (Basically says that the State can't make a law that prohibits the otherwise lawful execution of certain contracts.) 

There are some states that restrict wholesale activity (Ohio comes to mind), but there is no law against flipping property on a "double close"

It's helpful to remember in wholesaling, there are two forms of transfer of title you generally deal with.  Assignment of contract (where you simply give up your right to the contract) and Double Close (where you close with either the end use buyer's funds, or your own through transactional funding.) 

So long as you remember that you are a principal in the transaction, and act accordingly, you will be fine!

Happy hunting!

Have a Powerful Sales Day! 

Gotta respectfully disagree with you, I am a licensed Broker in the State of Arizona, and have been for over 18 years.  

I have a few disagreements with a couple points you made... again, respectfully speaking.

A.  Wholesaling is NOT a "net listing".  Net listings are discouraged by the National Code of Ethics (Article 1).  Wholesaling is where you as a principal, enter into a SALES Contract with the Seller.  Net listing is where you as an AGENT enter into a LISTING Agreement with the Seller.  There is agency involved with a Net Listing, where in a wholesale deal, there is NO agency.  Hence the difference.

B.  The statement "the value you bring to a wholesale transaction is no more than what an agent already brings...."  Again, have to disagree with you on this one.  The listing agent (I've been one of those in addition to an investor) has an obligation to sell the property at the highest price, and best terms possible as directed by the Seller.  

A trained, and competent Agent/Wholesaler brings far more to the equation than an "ordinary Agent".   

A trained, competent Realtor® Investor brings many things to the equation. Truthful, and accurate comparables (Article 1, 2 of the NAR Code of Ethics). Discloses the nature of their "Principality" in the transaction (Article 4) and is able to bring a TON of cash to the problem.

Your Untrained, NON Realtor® Investor is ONLY able to look at the Seller's property through one view.  A Listing. Expressly what they DO NOT want. 

C.  While I agree with your assertion that you cannot mislead the Seller as to the value, that does not automatically mean that you are unable to wholesale.  Wholesaling property... regardless of agent status, does NOT require the use of Subterfuge, or Lies to mislead or otherwise be less than truthful about the values.  Article 4 of the National Code of Ethics teaches agents how to flip, assign, sell, lease, or otherwise dispose of assets of a real estate nature.  

One area I WILL wholeheartedly agree with you on is the prevalence of NON Agents teaching wholesaling to the licensed.  LICENSED Agents have a few more concerns than that of the non-licensed.  There are trade offs of course.  Agents have some benefits that non agents do not enjoy. Having a non-licensed "guru" teaching a Realtor® how to wholesale is a recipe for disaster.

In my recent article "Does Getting a Real Estate License Help or Hurt You?" we recently covered some of those very same advantages. 

To point out the obvious, I fully believe that Realtors® should add wholesaling (aka assignment of contract) to their repetoire of services. So much so that I often write about this subject, particularly as it relates to the Code of Ethics.  

In short, your job description does not define your rights as it pertains to purchasing, flipping, disposing, or otherwise buying real estate.  A Realtor® is SUPPOSED to know about the good deals.  What you choose to do with them is answered already for you in Article 4 of the Code.

Have a Powerful Sales Day! 

Welcome Nina!

I happen to specialize in giving advice to brand new Investors, as well as Wholesaling Realtors® and I have a few ideas that I would like to share with you if you will forgive me in advance for the length! 

Three Types of Business

There is now, future, and maybe business. The Now Business comprises of people who have to sell right now!  They are the most motivated, serious people you can find.  They make decisions quickly and will take serious amounts off their home in exchange for a fast close.

The Future business is the type of business that you attract through direct mail.  Many times, in order to be extremely effective at the mailing game, you must be consistent, and do it over a long period of time.  You are investing in your future.  Many times, if you are new, you don't have the time to wait to get paid. 

Maybe Business is the type of business that you have no control over. Short sales, offers on REO property, auction property, etc. There is a great unknown over what will happen with these types of businesses as they are subject to other outside concerns.

How to Generate Business Now!

First, you have to understand the "Five Core Competencies."  The Five Competencies are Lead Generation, Lead Followup, Prequalification, Presentations, and Closing.

There are two ways to generate business.  Active Marketing, and Passive marketing.  

Active Marketing is actively going out into the marketplace and seeking someone who is looking to buy or sell.  Right now, within 5 miles of where you are right now, someone is looking to sell their home.  Your job, should you choose to accept it, is to find them!

Do this by calling FSBO's, FRBO, Expired listings, doorknocking, calling your center of influence, placing ads on CL, TONS of things you can do to actively bring a check to your door. It has high rejection, but will get you paid, paid well, and paid fast.

Passive Marketing is mailing, pay per click, running ads, things of that nature.  Things where you are waiting for someone to react to you.  It has low rejection, but it takes a long time to get paid, and will cost a lot. 

Work on Sales Skills First

It is tempting to want to run tons of mail, and tons of ads, and spend lots of money to get the phone to ring.  But what will you say when you pick up the phone?  Spend time now working on your sales skills through the tons of free resources available on BP as well as my blog.  

Once your sales skills are honed to a fine point, you will have the confidence you need to succeed in any sales environment! 

Again, congrats on your decision Nina, I wish you nothing but the best, and as always...

Have a Powerful Sales Day! 

Thanks for that question!  You know, there must be a bug in the air!  One of the people who follow my blog and podcast asked a very similar question today!  I wrote a blog post about it called "Does Getting A Real Estate License Help Or Hurt You?"

In short my opinion is "it depends".  

It depends on what you want to do with your license.  If you want to practice residential real estate as well as wholesale, or invest; then that is certainly "do-able".  

If you want to simply get it for access to MLS and hang it up at a discount brokerage; then I think you are wasting a very valuable (not to mention expensive) resource.

I look at the real estate license as this...

A Real Estate license is a "Winning Lottery Ticket" just waiting to be cashed in!

So I guess it depends on your perspective.  There are pros as well as cons.  So it just depends. 

Hope that helps!  

Have a Powerful Sales Day!