So there is a lot of discussion out there whether or not as a wholesaler if you should get your real-estate License or not. It is a question that I have asked myself a number of times, and at first I made the decision not to do. But after a few more months of thinking and dealing with incompetent Real-Estate agents, who had never heard of wholesaling, and even some who had never heard about buying houses for pennies on the dollar. My partner and I decided that this is something that we should pursue, and let me tell you why.
Gurus and other people that I have spoke with that have been wholesaling/investing for years typically don’t have one, and respectively don’t need one. They will even discourage the thought of it, why? Because they are already Rich! They are already established, they get referral business, and have a solid network that solidifies there business in there market. They have mastered there niche and marketing strategies, and have systems in place for doing those things necessary, and have employees they pay to carry out those tasks. As a newbie, how do you compete with that.
The bottom line is that the game has changed, and in order to compete in today’s market you need to be well equipped, to the best of your abilities, and I mean having the access to all pertinent tools, and the ability to MONETIZE(notice the caps) every lead you get, especially when you are getting started and cant afford to spin your wheels too much. Now some might tell you to find a Realtor to work with, well if you read the begging of this post then you will realize my own personal frustration with incompetent agents, and I can promise you there are a ton of stupid ones in your area as well.
So here are a few reasons Why you should get one.
As a Wholesaler, your primary objective, is to find Motivated sellers, and put their properties under contract for pennies on the dollar. As an Agent you have the ability to work with the largest motivated seller in the country! THE BANK! You can utilize your buyers list and market your listings to those buyers… Plus you have more time! And trust me if you are an active wholesaler like myself, you now how time, and I am talking about your contingency period in your contract, which is typically 10-14 days can sometimes not be enough time to get that property flipped. The reasons so are a mile long; from the availability to show the property to your investors, too the seller lives out of town, ect. So that can be beneficial.
Reason #2 Generating Leads
This is important to growing any business, if you build a solid reputation with the bank for moving units and helping them recoup quickly because your the guy/girl that gets it done, they will keep plugging you with deals, FOR FREE!
Reason #3 Marketing
I don’t know what kind of response you are getting from your direct mail campaigns but, I would say approximately 60% of our responses are people who are under water, and needing to preform a short sale on their property. That is more then half of the responses we get, meaning we need to work with an agent, because only a licensed Real-Estate agent can preform a short sale. And just so you know it is illegal, at least in California, for a Licensed agent to pay any non-licensed person, involved in a real-estate transaction.
Reason #4 Sellers that want Fair-Market Value
Now some people want Fair-Market Value for their property, and because of the condition of the property, and location they could get it. That’s great if your an agent, it sucks if you are wholesaler. And trust me you will run into that situation more than once. Not everyone that owns rental property needs money so desperately that they will whore off there house to get a few dollars. So what do you do pass it to the idiot that didn’t know what you where doing in the 1st place? Do you just toss the lead because YOU can’t do anything? Just so you know if you were to list a house for $200,000 and have a buy/sell commish set with the principal(seller) @ 6 %($12,000) if you simply list the house and a buying agent comes in with a buyer. You split the commish 3%($6,000) a piece and after paying your broker probably walk with a little over $4,000 in your pocket.
It’s your decision, these are just a few examples of why we are doing it, I am tired of watching money walk away, and I want to be able to maximize the amount of money I am able to make from real-estate, in all aspects. The end product I think we all want, is to be the investor, and you have to make alot of money to do that. Wholesaling is a great way to generate huge profits, I will not have to stop wholesaling because I get my Real-Estate License; I just have to disclose to everyone involved that I am Licensed Real-Estate agent.