Virtual Wholesaling and choosing a market

6 Replies

From what i've picked up in my brief time on BP; poke around on BP and make some connections on the ground in markets you are considering (there is obviously an innate challenge to vetting people from that kind of distance, but BP can help that process). I think it's worth definitely taking your time to build a genuine relationship especially if you're entrusting these people with your money from a distance.

According to the department of real estate, you have to be a licensed agent to market any property you are not the current owner of.  You have to be on title to be considered the owner. They don't care about any of the other ways around it that investors try to use like "equitable interest" since you have a signed purchase contract with the owner.

I've had really good convo's with Greg Lemon the Director of the real estate commission along with a few other guys on the commission.  Did a few conference calls with them and an attorney.

You can easily find attorney's that would argue that you don't need to be licensed to market a property and find ways around it.  But at the end of the day, the commission is the judge and jury so its best to play by their guidelines.

We both know a ton of people wholesale without being licensed and never get in trouble. It's just one of those things if the commission catches wind of it, you know what their opinion is on it and could issue a cease and desist, fines, etc. 

Originally posted by @Mark Maly :

According to the department of real estate, you have to be a licensed agent to market any property you are not the current owner of.  You have to be on title to be considered the owner. They don't care about any of the other ways around it that investors try to use like "equitable interest" since you have a signed purchase contract with the owner.

I've had really good convo's with Greg Lemon the Director of the real estate commission along with a few other guys on the commission.  Did a few conference calls with them and an attorney.

You can easily find attorney's that would argue that you don't need to be licensed to market a property and find ways around it.  But at the end of the day, the commission is the judge and jury so its best to play by their guidelines.

We both know a ton of people wholesale without being licensed and never get in trouble. It's just one of those things if the commission catches wind of it, you know what their opinion is on it and could issue a cease and desist, fines, etc. 

Mark this is a heavily debated subject on BP.. welcome..  in all states in the US the way wholesaling IE assigning contracts is taught its simply a violation of the licensure laws.. what happens Is some states could care less so the guru's sell courses to these folks convince them that equitable interest works.. but its up to each state to determine if they want to enforce their licensure laws.

Oregon is one that is starting to go after folks that market properties they don't own.. same with Ohio  and FLA and some others..

NB being a very small market has not really been talked about on BP.. but your correct the bottom line Is folks need to talk to the regulators not an attorney.. attorneys in these instance are paid to argue..  In my 40 years plus in this business I have one blemish and that was when my securities attorney told me I was fine.. and the State said I was not.. they argued .. and unless I wanted to spend 100 to 200k going to law review court.. US against the state we just cave.. so I got a voluntary cease and desist rewrote on contracts the way the state wanted them.. paid my 5k fine and moved on..  so it happens.. and that was with attorneys advice to start.. 

And its the same thing in our state with rehabbing houses to resell hardly anyone knows that you need a developers license. I did not know that .. again got tagged for that 1k fine  get the license now all legal.. but 90% of the folks who may take a guru how to flip homes courses this wont be covered in this state.. and they are actively fining folks.  When you call for inspections the inspectors check on your developers license if you don't have one they report you to the CCB you get a form letter pay your 1k fine get your license and don't do it again.

ON the selling real estate you don't own in this state the civil penalties are quite harsh.. And that is why I have my  vendors in this state that I fund their deals for.. WE CLOSE then resell..  First offense in this state is kind of like a DUII its going to cost you 10 to 20k.. in legal and fines.. one of my main guys ( who by the way has made over 250k this half of year alone with me funding his deals) he got tagged for putting a sign in the yard on a house he did not own.. neighbor wanted the house knew he did not own it filed a complaint .. and having to go through the legal and all.. he just knows now he needed a capital partner.. ( ME  LOL ) … 

But as long as you have Guru's and all the others on BP preaching that its legal.. well there you go.. but 99% of the folks will never do what you do and actually call the state.. and they will get away with it up until one time someone files a complaint against them.

Anyway that's my 2 cents.