I'm trying to understand how to do wholesaling legally?

3 Replies

Should I talk to my attorney before I talk to the seller? What information should I bring to my attorney, after I get a deal or before a deal? Should I find an attorney before I start making deals? Should I assign contracts with my attorney before I negotiate deals? Wholesale Steps Step 1. Negotiate deal Step 2. Go to laywer for a contract for the seller and another for the buyer Step 3. Contact seller Step 4. Seller signs contract Step 5. Ask everybody I know Step 6. Contract is bought Step 7. Go to the title company? Am i missing something?

@Toby Bounnarpha The first step is to determine whether wholesaling (in the assigning contracts sense) is legal in your state.  Many stated require that you be a licensed real estate agent, working under a  managing broker in order to market (even discuss) a property that you don't own.

Read up on your state's laws or talk with a real estate attorney.

Of course the 100% legal way to wholesale is to double-close.  No state prohibits you from selling a property that you own.

it is not legal to "wholesale" a property in Oregon if that activity involves collecting a compensation fee for a property you don't own.

My recommendation is to always get the license - it allows you to do so much anyways lol.

I did it more for education initially and to learn how to find distressed properties though now use it in all sorts of ways.

In 2018, my fixed costs... 

If I got a license only (doesn't mean I would have to become a Realtor, though I am). Cost is about $500 every 2 years (license + required education).

Get access to RMLS and Sentrilock lock boxes on properties, $1,200 annually (required participation fees and required membership in Realtor associations).

There are a few software packages that have made my life a lot easier, these are about $500 annually combined.

Until I conduct business FT for 2 years, the state requires one to be supervised. This cost is annual desk fees, co-commissions, and commission caps. Some of these are up-front and some are pay as they are earned. All brokerages are different and the biggest difference I have found is some require one to be full-time and some conduct formal training in addition to what state requires. 

I have been licensed for more than 2 years, and looked into going out onto my own though it is more hassle and costs a little more than if I leave it as it is (plus I get an awesome mentor that is available 7 days a week).

Back to getting a license...

I learn best through the School of Experience, I wanted a low-cost pay as I earn plan only, and I wanted to conduct my business in the way I wanted (with minimal micro-management). And I found it. 

Once I set this up my system, this didn't mean that I have to "work it". I work an average of 5-10 hours a week on it. In reality, it is my passionate side-hustle and ironically am doing more deals than average FT agent. It cracks me up. 

Once I started handing out my business card then friends and family told me they needed help. Licensing brings a little more credibility too. The only thing I do regularly for marketing is hand out my business card and maintain my own website with it's own hosting for about $150 a year.

Other advertising, mileage, and entertainment costs are variable and are a cost of doing business.

I bought a house for myself and got paid for it, advertise homes for others and get paid for it. Connect buyers and sellers and get paid for for it. And I facilitate transactions and get paid for it. 

I follow some general rules of thumb from my brokerage regarding fees though charge what I want. Overall, getting licensed was the best thing I did in this real estate adventure. 

Contact me if you want more info.

Not legal in Oregon to market a property you don't own and collect a fee like an agent would.

also we use title and escrow companies for closings  not attornies.. you can have a generic contract you want to use be produced by an attorney.

but if someone turns you in for any craigs list add  e mail blast and you show and address bd ba etc on a house you don't own.. or put a sign in the yard.. you will get a nasty gram and a cease and desist.

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