What is this called?

Question

Hey everyone, im new to these forums but i have been doing research on real estate investing for a while now.

I have a friend that what he does is he pretty much acts as a real estate investor but he does not have a license,  he gets the house leased to him and options. So he can sell the house as his pretty much. He then makes profit from that. I know he made 18,000 off one house and he said it took about 3 weeks to do

What type of investing is this and how do you do it?

Jon Holdman · Answer

Its wholesaling.  A lease/option is as good as a contract.  Its the option that matters, not the lease, though the lease does give you possession.  Some folks prefer to use options for wholesaling.  Once you find a buyer, you exercise your option to buy the house, then turn around and sell it to your buyer.

Jason Wheeler · Answer

Wholesaling is a great way to get your foot in the door and you don't need a whole lot of capital to get started in many cases.

Account Closed · Answer

yea he sells the house for the owner pretty much. he finds the deal

Jim Wineinger · Answer

The problem is in how you present yourself to the homeowner to get them to sign that contract.

If you tell them "I have contacts with which I can get you the most for your house", this will be construed as acting on behalf of the owner.

If you tell them "I will do my best to find a buyer to sell this house to, then I will purchase it from you for our agreed upon price", then your intentions are very clear from the beginning that you intend to profit from the resale of the house.

Be open and dont mince words to get them to sign a contract.

Uwe S. · Answer

Thanks for the clarification.

-Uwe

Todd Mims · Answer

Sounds to me like Lease Options, but if he wholesaling using options that sounds like a clean way to get in and get out with fewer complications.

Brian Levredge · Answer

That sounds like wholesaling.  You put a house under contract and turn around and sell the house to someone else for a profit.  I would depend on what state you are doing business in, but you don't need a license to do real estate investing, or selling for that matter as long as you are representing yourself.  If you want to represent others, then you need a license.

Uwe S. · Answer

Hello,

Two possibilitys:
- You mean he get a lease purchase from the owner and after only 3 weeks your friend (not the owner?) sells the house right?

- Or gives the owner a lease of the house (SFH?) to your friend and then sell the owner the house with the option fully rented? If so, I think thats scam, the buyer of the house believe its rented and the tenant (your friend) goes out after one month. I donÂ´t like the sound of this.

-Uwe

Uwe S. · Answer

But propertie under contract is not lease from the owner. Really I donÂ´t understand myself ^^.

-Uwe :)

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