Dallas-Fort Worth Real Estate Investor Club

Bringing an Agent into your Power Team

  • 04 Apr 2013 11:08 AM
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    Message # 1259748
    Michael Mixon
    I've heard alot of success stories where investors get an Agent to mine the MLS for keywords like "fixer-upper" "distressed property" "must sell" etc, then turn around and make blind offers on these houses with the hopes that one or two will accept an offer. Then turning around an wholesaling the property. This sounds like an excellent way to find motivated sellers without doing the typical direcet mailing, bandit signs or other ways of throwing out a huge net hoping to catch even one or two prospects, but my question is, 

    "What is in it for the Agent?"

    Do they end up getting paid when the cash buyer closes the wholesale deal? It seems to me that would only benifit them if they were the listing agent of the property.  Unless, in the process of mining the MLS, the become my buyers agent. Which seems like it would work out. I just want to make sure I'm not missing anything, and I'm not wasting some Agents time by discussing this process with them.

    Thanks for any input,
    Mike
  • 05 Apr 2013 6:58 AM
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    Reply # 1260449 on 1259748
    Matthew Walker
    Michael, There are multiple dynamics at play in the scenario you just described, but the short answer to your question is this. The agent making offers in your scenario would be paid whatever the listing agent is advertising, usually a 3% commission. The buyer's agent commission comes from the seller side of the transaction and will be paid either way. If you don't use an agent, the listing broker would receive the extra 3%, more than likely, depending on how they structured their listing agreement with the seller. You'd be paying the 3% either way. Good luck.
  • 05 Apr 2013 3:17 PM
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    Reply # 1260947 on 1259748
    Michael Mixon
    Thanks Matthew, that's pretty much what I was expecting to hear.  So if I choose to pursue this method, I'm trying to figure out the best exit strategy.  

    I've talked to one agent before about doing this exact thing, but we hit a bump when he insisted I have a proof of funds for each offer.  He was adamant that the selling agent wouldn't even consider an offer without one.  So how are other investors successful wholesaling with this model?  

    My other possible option I've considered is to do a "Turnkey Rental Flip" meaning I use hard money, buy the house super cheap, rehab the bare minimum to make it rent ready and sell to a long term hold investor.  This is currently the top option on my list, as the city I live in doesn't have many (if any) rehabbers, but has a lot of hold/rent type investors.
  • 06 Apr 2013 10:55 AM
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    Reply # 1261602 on 1259748
    Matthew Walker
    Michael, You can call me at 817-907-5100 and I can try to answer your questions quicker thqt way. Thanks, Matt
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