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#347709 - 08/13/10 01:22 AM Working With Wholesalers?
Gayla Offline
Member

Registered: 05/27/10
Posts: 34
Loc: Everett, WA
I've got a client who is interested in wholesaling REO's. I know pretty much nothing about RE investment and it's taken us a few weeks to even get to the point of speaking the same language. From what I can tell he is also relatively new to the process so there's a learning curve for both of us.

Since I don't really understand it, I'm finding myself nervous about the legal/ethical issues that may be involved in this. I'm doing the research, trying to learn the language, etc. but in the mean time, is there anything in particular that I should keep an eye out for that would be a big, giant red flag?

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#347724 - 08/13/10 07:37 AM Re: Working With Wholesalers? [Re: Gayla]
super realtor Offline
Major Contributor

Registered: 05/01/05
Posts: 8596
Loc: georgia
By wholesaling is he trying to assign properties for a fee or buy outright and resell to a retail investor for a long term hold.

Just remember this: The more difficult something sounds the harder it will be to actually happen and the more chance risk and litigation will be involved.

Before performing the activity you would need disclosures drawn up and have the attorney for your head broker review before proceeding. Investors want to try get rich crap all the time and most of it never works.

I always make investors fill out an asset sheet to determine their buying power. If they have no money and want to try a hair brain scheme to make some low coin I don't even work with them.

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#347783 - 08/13/10 02:12 PM Re: Working With Wholesalers? [Re: Gayla]
Gayla Offline
Member

Registered: 05/27/10
Posts: 34
Loc: Everett, WA
Yes, I think that's what he's trying to do. I spent some time last night going through various real estate investment sites and trying to figure out the basics of how wholesaling works. It makes sense on a theoretical level but there's some parts of it that just aren't clicking in my head.

I'm struggling to understand how he would resell something that has been sitting around for three months and hasn't sold already. I get that it might be possible for something that is just listed but he's looking at properties with 120+ CDOM. And to be honest, I'm failing to see how working with me as a buyer's agent will be helpful to him in this.

Thanks for the info. Looks like I have a lot more reading to do and some serious conversations with my broker.

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#347786 - 08/13/10 02:18 PM Re: Working With Wholesalers? [Re: Gayla]
super realtor Offline
Major Contributor

Registered: 05/01/05
Posts: 8596
Loc: georgia
If you get investors I have a 100 percent commercial lender.

You don't have to put any money down but the purchase price is 1 million or more.

Buyer has to be 10% liquid. In other words they have to have a bank statement or balance sheet with 100k or more in it.They don't have to put the money down but the lender likes to see reserves is why they have the balance sheet/bank statement request.

If you are working with investors wanting the wholesale or bird dogging dump them now and find investors with cash or that have partial money.They might not have cash but their group does etc.

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#348041 - 08/15/10 10:01 PM Re: Working With Wholesalers? [Re: super realtor]
realtorsd Offline
Member

Registered: 08/08/10
Posts: 21
Loc: San Diego, CA
Find out exactly how the wholesaler will use you and how you will get paid. I don't wholesale but I have a close friend who has been doing it for 20+ years. I do know quite a few wholesalers and I've been approached by many as a Realtor.

The problem is experienced and successful wholesalers do not use Realtors to buy property. They MAY use you to sell, but only if they are in a bind. The whole concept of wholesaling stipulates that they find a property under market value, not on the MLS and already have a buyer lined up.

Before you spend a lot of time on this person my advice is find out how you will be paid. Is it flat fee CMAs? maybe they do want to list with you?... just something to think about before putting the hours in! Good luck!


Edited by realtorsd (08/15/10 10:02 PM)

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#348291 - 08/17/10 05:34 PM Re: Working With Wholesalers? [Re: realtorsd]
Gayla Offline
Member

Registered: 05/27/10
Posts: 34
Loc: Everett, WA
What I'm having the hardest part understanding really is where I, as an agent, fit into it on a wholesaling level. Everything I've found, in trying to learn more about this process, talks about finding properties and working direct with homeowners rather than purchasing through an agent. That's not really possible with REO's but they also cannot be assigned, or at least I've yet to see one that can be. So when I factor all of this together, it's not making much sense to me.

I did write up something similar this weekend for a client that has a buyer in place. He's not assigning but will be reselling almost immediately on closing. Should be a good learning experience!

Thanks for the input. It's been very helpful!

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#348415 - 08/18/10 06:06 PM Re: Working With Wholesalers? [Re: Gayla]
CIProperties863 Offline
Member

Registered: 03/09/10
Posts: 63
Loc: Polk County, FL
If he is just starting out then the reason he whats your assistants is 1 to have access to the MLS threw you, 2 have access to contracts state approved, or 3 possibly list with you when he needs a buyer. Other than that I don't see why he would need a realtor. My advise is to just build this professional relationship with him and and see if you get some listing, but I'm almost positive he just wants the MLS access for expired listings or those rare deals that come along every now and then.

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#456101 - 12/30/16 10:22 PM Re: Working With Wholesalers? [Re: CIProperties863]
Jhony Offline
Member

Registered: 12/13/16
Posts: 44
Loc: Maharashtra > Other areas
Hi,

I agree with you

Thanks

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