Hi Guys, I am new on here and will like to get started as a real estate investor. At the moment am jobless(almost two weeks) with a little cash to sustain me and family for now. I am IT professional but am dreading going back to my 9-5 (six figures but no life around it), and will like to raise some money on a down payment on a few deals I have analyzed and worth starting out with. Not asking for any handouts, I just want to network with any Landlords and investors in the Maryland, Virginia and D.C area or even east coast or those who will even work with me remotely to wholesale deals to them when I come across them on the many channels I come across. I will appreciate any recommendations to hard money lenders or properties with owner/ seller financing with minimal down payment. My plan is to get into fix and flips as I get more confident and do my due diligence. Any feedback and advise will be appreciated, without any offense taken. Thanks
@Sidney Anning Step one is to be sure that wholesaling is legal in your state. Most states require that you have a real estate license and be working under a supervising broker before marketing a property that you don't own. That means that you can't even discuss the property with a potential buyer as that is a form of marketing.
The one way of wholesaling that as far as I know is legal in every state is to actually close on the property and then resell it. I don't know of any jurisdiction that prevents you from selling a property that is yours.
There are lots of discussions her on BP regarding this. Dig through the archives and you'll have a month's worth of reading!
Sorry Charlie, but wholesaling is not illegal in most states.
I'm not a lawyer, but wholesaling as I understand and practice it, means putting a property under contract as a principal in the deal and then selling/assigning the contract to another party who will then fulfill the contract by purchasing the property.
This is done every day on Wall Street with options and futures contracts. Many people sign contracts to buy oil, corn, gold and other items with no intention of actually taking delivery of those items. They're only in it to make a profit when the price of the item moves up and the can sell their contract for a profit.
There is no law against this and it is again my understanding that all contracts are assignable unless there is language in the contract which forbids assignment. I do know that the Maryland Realtor contract does have such a clause in it and that's why I don't use it. Another reason is that I'm not a licensed agent and by law, I can't use it. As an aside, there are legal ways to assign "non-assignable" contracts, but that's a different discussion.
Just be clear in dealing with potential contract assigns that you are not selling a property, but you are looking for a fee for assigning/selling the contract.
Hope this helps clear things up.
Frederick is a great market to begin in as the price points are fairly cheap and there is a decent economy there poised for growth. If wholesaling is where you want to begin then I would suggest moving south a bit and working markets closer to DC. Personally I find Frederick to be a good rental market rather than a wholesaling market.
Make sure to hit every meetup and networking event you can.
I love the Frederick area. You can connect with me if you have questions.
@Alan C. - comparing real estate to Wall Street trading is not a good analogy; real estate is regulated in a manner that is quite different.
Even the example of how you act, by becoming a principal in the transaction, has been targeted by state regulators; @John Thedford has posted some of the newer regulations from Florida. And it seems that such regulations will be on the increase, as state lawmakers tend to copy what others have done, and realtors have strong lobbying with NAR, and quite frankly there is the bad behavior from those wholesalers who have wronged a seller that reaches the attention of the regulators and they then get to work on "correcting" that.
I am not saying or implying that any of your activity is in this category - just pointing out that there are some locations where it could be problematic.