Can you do prison time for wholesaling

Question

New here and just saw a video about you could go to prison for wholesaling? I have friends whom are police I could ask them but just curious is this a actual calculation? That was ....let’s say took me off guard and questionable. Any input would be most helpful. Thank you

Mike Dymski · Answer

"What are you in for?"

-"Killin' my lady..."

"You?"

-"Wholesaling run down properties..."

-"Huh?"

Patricia Steiner · Answer

In Florida, it would be considered the unlicensed practice of real estate which is a Third Class Felony; here's the penalties:

"If convicted of Unlicensed Practice of Real Estate in Florida, a judge can impose any combination of the following penalties:

• Up to five (5) years in prison.
• Up to five (5) years of probation.
• Up to $5,000 in fines."

And, since you would also be "writing" a contract, you could be charged with practicing law without a license.  Again, this is Florida, where realtors/brokers are about the only professionals who are authorized to prepared contracts outside of the legal profession.

I personally don't get wholesaling...too little return for a whole lot of risk.  Hope this helps.

John Thedford · Answer

I know some unlicensed Brokers that should be in prison.

Jay Hinrichs · Answer

Touche'  I think as much as anything one would also get nailed by IRS  I bet a lot of wholesalers who are getting checks outside of escrow are pretty sloppy at filing their returns.   I saw this first hand with real Estate agents who were all independent contractors and never had to pay their own tax's first year about april 1 my agents would start to come to me for commish advances  LOL .. this spawned a whole niche industry of companies that have a business of advancing commish to agents.. its kind of like payday loans.. high interest maybe not as high as those but still high..

Jay Hinrichs · Answer

I suspect you can in all states.. just depends on what states want to enforce the laws on the books.

I also think to end up in prison for illegal wholesaling means your dumb as a rock.

you would get caught first time and usually get a cease and desist.. pay a fine have to hire a lawyer etc. told not to do it again.

second time little more trouble bigger fine.

third or 4th time now they get serious.

I had a client in MS that got nailed for this.. he would not stop.. so on 2nd offense he got arrested on a Friday and could not bond out until Monday.. and spending the weekend in the Hinds county jail is not a place that I would want to be.

but time goes by does it again this time over state lines and out of country..  so yes it can happen does it.. I don't think the prisons are full of those imitating or selling real estate without a license I do believe though there are those that are stupid enough to get there though.. Kind of like a serial drunk driver..

Jonathan Klemm · Answer

Hey @Lynne Garris - I am here in Chicago, Illinois which is a state that requires you to have your real estate license to wholesale.  As of today, I have yet to hear of anyone getting in trouble with the law let alone going to prison.

Just figure out what the laws are in your area and follow them.  If you need a license and don't have one, I'd suggest just finding a partner.

Adam Macias · Answer

Just... hahaha

Andrea Proeber · Answer

The only US states that currently require you to be licensed in order to wholesale real estate are Illinois and Oklahoma.

There are also some laws that you must adhere to in Florida. For example, Florida state laws dictate that you can’t market a property unless you are the current seller or contracted agent. So that means as a wholesaler, you can’t actually put For Sale signs outside the property or market the property in any way unless you currently have the legal title or are representing the seller as a licensed real estate agent.

Otherwise if convicted of unlicensed activity it is a 3rd degree felony.

However it is much more likely that you will be sued for fraud by past customers or their families that feel cheated and lied to. More and more judges are looking at this as a predatory practice that takes advantage of the most vulnerable of the general public, namely the elderly and the disabled.

Steven Goldman · Answer

If you are entering in to an assignment contract than you are not practicing real estate without a real estate license.  I really question whether the free state of Florida is going to prosecute anyone for selling a legitimate real estate contract that they have made legally assignable. Now, a civil suit from the owner for fraud that is always a possibility. So you better be careful what you say to the owner.

see below:

Purchasers, Executors, Heirs and Assigns

For many years, it has been generally accepted in Florida law that a land sale contract can be assigned. Sometimes, this is easily determined because either the section for assignment is checked or the language of the contract identifies the buyer as the “purchaser and/or assigns” when describing the person who is buying the property. Either one of these options places a seller on notice that he or she may be seeing a different face at the closing table.

Other language that may be used in the sales contract: “heirs, executors, or assigns.” This language is also notice to the seller that the buyer may opt to assign the deal before it closes. (See – Shirley v. Lake Butler Corp., 123 So. 2d 267  – These words, heirs, executors, or assigns, do not require the seller to approve the assignment in order to make the assignment effective.)

I thought Florida men were against government regulations. Unless  it effects their wallet! Give me a break. You wholesalers, Good luck and keep moving forward. With all of the appreciation in Florida it should be fertile ground!

Branden Coluccio · Answer

Don’t be stupid. It’s perfectly legal to assign a contract in Florida.

https://aboutfloridalaw.com/20...

Can you do prison time for wholesaling

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