I am desperate to start wholesaling but I have zero money to advertise and no time to prospect because I work 6-7 days a week. :banghead Would getting a buyer’s agent be a good idea? Could I set up a deal where I could split the profit from the wholesale with the agent? What do you guys suggest? Thanks guys.
An agent tried to slip a buyer’s agent agreement in on us just yesterday. She was supposed to be sending us the purchase agreement for a property we wanted to get under contract. The very first document that came off the fax was one that said we’d agree to pay her between 3 and 10% of any real estate transaction we found for the next 45 days. Wrong answer. Especially since we are currently working with 2 other agents on properties we have yet to put under contract.
The agreement stated we’d only work with her but she could and would work with anyone else she chose during that time. So not only was she going to receive the full commission as both the listing and selling agent we’d be paying her another 3 to 10%. Pretty good racket if we weren’t working on 5 deals at the time.
Anyway, I said all that to say find someone that you are comfortable with and that has experience working with investors. Preferrably an investor agent they have the best contacts. They will have a contract setting their terms and they will work hard for you. You won’t have to split the profits with them. Just remember they will require an exclusive relationship for a period of time so make sure you really are comfortable with them.
SJB
It all depends on how you find the deals. Me personally, I stay away from Realtors unless I’m dealing with REOs (Real Estate Owned).
I suggest that you “drive for dollars”. You could drive a neighborhood on the way to work or when you get off (unless of course it’s dark on both occasions). You could also drive on your day off.
Is your plan to get a buyer’s agent to help you locate a wholesale deal that is not already listed? Or is the buyer’s agent going to find listed deals for you? If it’s listed the buyer’s agent usually gets paid by the seller, but I don’t know if there will be much room left for you to wholesale.
Can they find deals that aren't listed yet? I am totally new at this.
The best way I think for you is to find someone, Broker or Investor that works the pre-foreclosure market. I have been doing this for years. Simply put, I find the deals and the Investor funds the deals. I, as a Broker/Investor, find a buyer to wholesale to or put it on the market. I do not charge our partnership a commission.
Jim
I think you might be overlooking where you fit into the chain.
You say you want to be a wholesaler. Well, as far as I can tell, the “value add” that a wholesaler usually brings to the table is his or her ability to find profitable deals. Some might argue that part of the “value add” is in finding buyers (investors), but I disagree as finding investors for truly good deals is easy.
Finding profitable deals takes time (someone has to deal with the sellers) and money (at least for bandit signs).
If you have neither, then I don’t see how you can possibly expect to get into wholesaling. The idea that you might find other people with access to deals and then somehow split the profits with them doesn’t seem to have much merit, at least the way I’m looking at it.
If I had access to these deals, why do I need you? The only way you can add value to the chain is by bringing a buyer to the table, and you don’t have any of those. An agent is certainly not going to agree to split profits with you; they are pretty much on a commission only basis, and they are not interested in taking title to a property.
I don’t mean to throw cold water on your plans, but I am just trying to be realistic. Most guys that get into the business by wholesaling do so because they have a little bit of money and some time to commit to the effort. It seems to me like your plan involves other people doing most of the work (which usually is the best way to make money, but probably not feasible here).
If someone else has an opposing view, please do share it, because I am very interested in learning how I can make money in real estate with no money AND no time.
Excellent point PaulBroni. In this business, it takes time to find deals that no one else knows about. If a Realtor has found for you, then the chances are everyone knows about it & the deal will be overpriced, i.e., no room for wholesale profit.
You do not necessarily need to sign an exclusive agreement (for any period of time) with an agent in order to have them represent you, Instead you can sign an exclusive agreement on a per house basis, meaning that if you end up buying that particular home that they would be entitled to a commision.
I am an agent and investor, I have worked with many wholesalers and commission is no issue. I find them the homes, the seller pays me the commission, and they buy or assign the home. The seller is always paying the commission so it does not matter unless the home is unlisted and in that case you would not need an agent.
Your plan makes no sense in that you want an agent to find a house, then find a buyer, then give you half?
A better plan might be to build a buyers list, this can be done from work using proper advertising, then have the agent look for homes for you. Then if they find a good one, you put the home under contract, and work with one of your buyers.
Don’t expect the agent to want to give you one of their buyers unless you are expecting to pay them a full commission. The oppurtunity cost of giving up one of their buyers to you, is a full commission, so that is what they expect.
I hope this helps a bit
Eric Medemar
Hi Eric
I have already built an alright buyer's list through ads and I'm trying to enlist more.
I’m just a newbie trying to figure out if a Buyer’s agent could help me find any deals worth wholesaling. Like the other guys said above, if the property is listed, then it most likely has no room for profit. Can’t a buyer’s agent find desperate sellers though? I.E. A house that is in pre-foreclosure?
My suggestion: you find the desparate sellers. Then there should be little competition.