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.
- Different ways to set up your real estate business
- Why people have a problem with wholesaling
- What successful wholesalers do to make a lot of money
- The steps to take if the state requires a license
- Preparation is everything
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These states that are wanting real estate wholesalers, real estate investors essentially to be licensed is because of bad actors. Okay? Bad actors that go out there and they overpromise and underdeliver. The 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, you know what? If licensing comes, great, hopefully that somehow gets resolved. But I don’t know how, I don’t know how you prevent that even if people are licensed. Let’s just say that it just sweeps the nation, which I think would take five 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. But Brent, I’m not good at school. I’m not good at studying. I just want to go. I want to be able to hustle right away. Fine. But if they put that hurdle in front, you have to play by the rules. You can’t play outside of it. All right. If it’s not here, what I’m saying right now is just wait to see what happens. All right. If you start hearing rumors and rumblings and things going on, then you can start making adjustments and it’s going to take year to two years for it to get implemented, right? I mean, it’s going to take a while in most states. Some states just jam it through, but for the most part, it’s going to take a while to go through. Because of that, that’ll allow you to set it up. You can do a couple of different things if this happens. Number one, get your license. Boom, easy. There you go.
Number two, closing those deals, right? Get transactional funding or get a real estate investor, not even real estate investors. Just 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. Okay, that’s it. You know why people have a problem? 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 don’t. You can go out there and you can just by your own sheer effort, go out there, talk to people, have quality conversations and make 20, 30, 50, $100,000, and people don’t think that that’s fair. That’s not fair. You didn’t even buy that property. You didn’t even take the risk. Well, you had that conversation. You solve that problem.
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 a property from being vacant, from being distressed, from being beat up, and we put it out there and 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 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 and picking out their design elements and picking out the appliances and organizing and keeping those properties secure so everything doesn’t get stolen.
All of these things, they’ve got so many other things, flippers have so many other things in their mind. Rental portfolio owners have so many other things in their mind besides marketing to the distressed property owners, and that’s what we do.
Also, Brent, most people don’t want to deal with distressed property owners and their problems.
Yeah. It’s 100% right. Not only that. Well, listen, it’s not only that Mike. You know what else it is? It’s the followup, it’s the followup because most people are used to when you call somebody up and it’s a normal transaction, they answer or they respond or they need you for something. With distressed property owners, a lot of times, this isn’t their fault. A lot of times they feel bad, Mike. They feel bad that they’re in this situation. They feel bad that they don’t know what to do. They feel bad to put this on somebody else so they hide away. We have to go and we have to 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 we do. That’s what the successful, really successful superstars in this business do is pull back that emotional onion, get to the core of it, understand what’s going on.
A lot of people don’t have the patience for that, and wholesalers do. Everybody out there that is making calls, knocking on doors, sending out mailers, putting out bandit signs, putting together websites, following up with all these distressed property owners, I salute you. I really do, because I think you’re incredible. I think that what we do is incredible. I think that without us, there would be a whole lot less properties out there getting turned around and getting renovated. They say that there’s a shortage of properties. There’s 11 million properties vacant, 14 billion in unpaid property taxes. We’re out there helping these people out and finding it. Are there some bad actors? Absolutely. But we don’t have to be that. You know? If legislation comes along, we live in this land, right? Those are the rules that we live by and 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’s going to happen, or if you’re preventing yourself from going after your real estate goals, your real estate dreams of building up a portfolio and having that portfolio pay your lifestyle through passive income, whether it be rentals, whether it be commercial properties, whether it be land, whether it be Airbnbs, whatever it is, if you’re letting this prevent you, let’s just destroy that right now. Let’s break whatever’s going on inside your brain that’s saying, well, I don’t know if I should get into wholesaling because what if they make me get a license? Then find an investor that will help you, right? That will cover the cost, that will cover the purchase, or get your license. I don’t think it’s going to happen for five to 10 years. All right. I like the National Association of Realtors, they’re 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. They’ve really kept it clean. They’ve kept the industry really, really clean so 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 that you have to get a license and you don’t want to start wholesaling, you’re missing the boat, you’re missing the boat.
Couple of things, Brent. One is wholesaling is not illegal, right? Two, some states may choose to require wholesalers to get a real estate license. Three, if they do, then the wholesaler has two options. They can either 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 go 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.
That was it. That’s it. I mean, when it comes to wholesaling, I mean, unless it’s specifically that you cannot assign the contract in the contract, then you can assign that contract. I mean, check with your local attorneys, check with the title companies and closing attorneys. I’m telling you, it’s so funny, Mike, I did a mastermind. The mastermind in Salome, The Multipliers Mastermind. An incredible guy, Jeff out of Chicago is absolutely destroying. He saw the legislation coming up. He knew that you’d have to get licensed in Illinois to do business there. His business tripled as soon as that came out. What I’m telling you is the moral of that story is prepare yourself and you’re going to be ahead of everybody else. All right. Don’t just assume that it’s going to happen in your state, follow it and stay up to date with it.
Just talk to the title companies, talk to the real estate brokers around town and see what’s going on and see if there’s a big push in your state because it’s state by state, it’s state by state. It’s not NAR that’s going to just do it throughout the whole country. It’s going to be something that they elect people in each state to run that kind of campaign to get licensing for wholesaling.
States that require licensing it, I mean, it’s just going to get rid of the bad apples.
Yep. Yep. There you go. There is your answer. If you are interested in joining the most proactive group in real estate investing, it is the TTP program. Go to wholesalinginc.com/TTP, wholesalinginc.com/TTP. Scroll down, check out the hundreds of testimonials. 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.