Some states require wholesalers to be licensed because of “bad actors” who overpromise but underdeliver, people who unethically lock up properties at prices they could not afford. But you should also know that these things still happen even with licensing.
In this episode, Brent Daniels gives a rundown of what you need to know about wholesaling whether you have a real estate license or not. He outlines the steps to take if you are wholesaling for the first time, and he explains the benefits of having a license ready.
Wholesaling Quicktip – Can You Wholesale Real Estate without a License
These states that are wanting real estate wholesalers or real estate investors, essentially, to be licensed is because of bad actors. Bad actors that go out there, they over promise and under deliver. Bad actors that go out there and unethically lock up properties at prices that they know they could never purchase that property at and then they beat those homeowners up day-after-day getting up to the closing to try to get that property down lower. With that, I say, if licensing comes, great. Hopefully, that somehow gets resolved, but I don’t know how you prevent that even if people are licensed. Let’s say that it sweeps the nation, which I think would take 5 to 10 years, to be honest, for it to be a requirement to have a real estate license to wholesale real estate.
If that happens, great. Get your license. “Brent, I’m not good at school and studying. I want to go and I want to be able to hustle right away.” That’s fine, but if they put that hurdle in front, you have to play by the rules. You can’t play outside of it. What I’m saying right now is to wait to see what happens. If you start hearing rumors, rumblings and things going on, then you can start making adjustments and it’s going to take 1 to 2 years for it to get implemented. In some states, it jams through, but for the most part, it’s going to take a while to go through. Because of that, that will allow you to set it up and you can do a couple of different things if this happens. Number one, get your license.
If they put that hurdle in front, you have to play by the rules. You can’t play outside of it.
Number two, closing those deals. Get transactional funding or get a real estate investor, not even a real estate investor, get an investor that has the funds that can help you close that deal and get a return in one day because you’ve already got another buyer lined up. Do you know why people have a problem with wholesaling for this reason? It’s because you don’t have to have money to make a lot of money. That’s the truth. You can go out there and you can buy your sheer effort, talk to people, have quality conversations and make $20,000, $30,000, $50,000, or $100,000. People think that’s fair. That’s not fair. You didn’t even buy that property or take the risk. You had that conversation.
You solve that problem. Do you want to know why we get paid so much? We get paid so much because of the thousand people that get paid when we take property from being vacant, being distressed, and being beat-up, and we put it out there. We put it in the hands of people that are going to make something really incredible, do a tasteful remodel or completely build a whole new property and bring up the neighborhood.
That’s what we do. That’s why we get paid as much as we do. Other people don’t want to do it because other people want to fix up properties. Other people have way too much responsibility running their construction crews, picking out their design elements, picking out the appliances, organizing and keeping those properties secure so everything doesn’t get stolen. Flippers have so many other things in their mind. Rental portfolio owners have so many other things in their mind besides marketing to distressed property owners. That’s what we do.
Most people don’t want to deal with distressed property owners and their problems.
It’s 100% right. It’s not only that, Mike. Do you know what else it is? It’s the follow-up because most people are used to when you call somebody up and it’s a normal transaction, they answer, they respond, or they need you for something. With distressed property owners, a lot of times, they feel bad that they’re in this situation, they don’t know what to do, and put this on somebody else. They hideaway. We have to go and peel back the layers of this emotional onion.
We have to make them understand that they can trust us and we’re going to help them with this process. That’s what the successful superstars in this business do. It’s to pull back that emotional onion, get to the core of it, and understand what’s going on. A lot of people don’t have the patience for that. Wholesalers do. Everybody out there that is making calls, knocking on doors, sending out mailers, putting out bandit signs, putting together websites, and following up with all these distressed property owners, I salute you because I think you’re incredible. What we do is incredible. Without us, there would be a whole lot less properties out there getting turned around and renovated. They say that there’s a shortage of properties.
There are 11 million properties and $14 billion in unpaid property taxes. We’re out there helping these people out and funding it. Are there some bad actors? Absolutely. We don’t have to be that. If legislation comes along, we live in this land. Those are the rules that we live by. That’s what we got to abide by. You either close on those deals or you get a license. If you operate out of fear that something is going to happen or if you’re preventing yourself from going after your real estate goals, your real estate dreams, building up a portfolio and having that portfolio pay your lifestyle through passive income, whether it be rentals, commercial properties, land, Airbnbs, or whatever it is, if you’re letting this prevent you, let’s destroy that right now.
Let’s break whatever is going on inside your brain that’s saying, “I don’t know if I should get into wholesaling. What if they make me get a license?” Find an investor that will help you, cover the cost, purchase or get your license. I don’t think it’s going to happen for 5 to 10 years. I liked the National Association Realtors. They are a huge lobbying group. They might be the biggest lobbying group in the country. They do a fantastic job. For the most part, Mike and I have been licensed since ’04, and they kept the industry really clean. I don’t mind them stepping in here and making it so that you have to get a license. What I’m saying is if your fear is you have to get a license and you don’t want to start wholesaling, you’re missing the boat.
A couple of things, Brent. 1) Wholesaling is not illegal. 2) Some states may choose to require wholesalers to get a real estate license. 3) If they do, then the wholesaler has two options. They can get licensed, which is not a big deal for the most part or they can close on the deals with either their own money or find somebody with money, which by the way, we did that for a lot of years buying stuff at auction. We didn’t have the money. We had to talk to people, find somebody that had the money and split up the deals with them.
When it comes to wholesaling, unless it’s specifically you cannot assign the contract in the contract, you can assign that contract. Check with the title companies and closing attorneys. It’s so funny, Mike. I did a mastermind in Tulum, The Multipliers Mastermind and an incredible guy, Jeff, out of Chicago is absolutely destroying it. He saw the legislation coming up. He knew that you’d have to get licensed in Illinois to do business there and his business tripled as soon as that came out.
Prepare yourself, and you’re going to be ahead of everybody else.
The moral of that story is prepare yourself and you’re going to be ahead of everybody else. Follow that. Don’t assume that it’s going to happen in your state. Follow it and stay up-to-date with it. Talk to the title companies and real estate brokers around town, see what’s going on and see if there’s a big push in your state because it is state-by-state. It’s not NAR that you’re going to do it throughout the whole country. It’s going to be something that they elect people in each state to run that to campaign to get licensing for wholesaling.
States that require licensing are going to get rid of the bad apples.
There is your answer. If you were interested in joining the most proactive group in real estate investing, it is the TTP Program. Go to WholesalingInc.com/TTP. Scroll down, check out the hundreds of testimonials, and check out what the program is about. If it feels good in your guts, then sign up for a call. I look forward to working with you personally.
About Brent Daniels
Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low cost, and incredibly effective telephone marketing program…
Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!
Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…
A natural leader, Brent combines his passion for helping others with his high energy, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!