Is it a good idea to start my wholesale career off with a property that's currently occupied with tenants? Also how do I inspect the property to make a reasonable offer without interrupting the current renters? I have spoken with the home owner who is motived to sell quickly but I can not make an honest offer until I get help with this situation... Please help... Any info is greatly accepted 

Do you actually plan on buying and then reselling or simply skirting licensing laws to broker without a license. If skirting laws, that presents challenges of showing the property to other prospective buyers not to mention that is actually brokering real estate. We have a local FRAUD and SCAMMER that took through about five or six "inspectors" when in fact this crook was trying to broker the deal. I met and educated the seller and they backed out once they realized they were being scammed. The crooked unlicensed broker sued the seller and seller counter sued. Both walked away paying their own legal fees. The unlicensed broker hates me to this day and refuses to look in the mirror and acknowledge what he did was wrong and that he is a FRAUD and SCAMMER breaking laws to fatten his wallet. It takes a lack of honesty and integrity to skirt laws and broker without a license. You will find a few unlicensed RA RA broker cheerleaders on BP to help push you along and give you a pat on the back but I won't be one of them:)

thank you for the reply @John Thedford I'm not trying to broker any kind of deal or do any illegal RE business. I was asking to see if it were at all possible to do a wholesale on the property while the tenants still lived there so they would not have to move because they have been living there for 10+ years. 

Yes possible but best done by a licensee so they don't have to play games and pull their typical scams on the seller. Hopefully they have the integrity to close if they cannot find a buyer.

@John Thedford are you actually reading the question at hand or speaking from your past experience with one dishonest person? Wholesaling is not a scam by any means and you don't need to be a REA nor broker to help a homeowner. 

Hi Cameron, I am not sure about the rental aspects of wholesaling this one. Usually you can sell to another landlord who is aware of the lease terms and will follow until expired. However, being that I am not an expert in that market, I don't feel comfortable giving you legal advice. Why don't you JV with an expert in that market. I think you can post the question on one of the FB forums. There are a lot of ppl who are not wholesaling on here giving incorrect information, find a mentor so you can gain accurate sound information. Best success

Originally posted by @Adriane Allard :

@John Thedford are you actually reading the question at hand or speaking from your past experience with one dishonest person? Wholesaling is not a scam by any means and you don't need to be a REA nor broker to help a homeowner. 

Actually I did read it and answered accordingly. Now lets talk about scams and scammers:
1. skirting laws to broker real estate without a license is a SCAM
2. misleading sellers that someone is a buyer when they are not is a SCAM
3. using BS escape clauses leaving the seller with nothing is a SCAM
4. misleading sellers as to the value of their property is a SCAM

So...care to dispute these facts? What are YOUR qualifications?

If you want to wholesale, one of the most important skills you will need to develop is working with existing tenants. They can either make your deal impossible or pleasant. You will often have to make side deals with tenants if the plan is to get them to go and you will have to build a relationship with them to gain access. They will be scared they are getting evicted and rightfully so, so you have to explain how this would work. They may not like it. But if they will be difficult, then it won't be worth it unless the deal is so good that you and the subsequent assignee are fine, sight unseen, which is rare.

Originally posted by @Jonathan Greene :

If you want to wholesale, one of the most important skills you will need to develop is working with existing tenants. They can either make your deal impossible or pleasant. You will often have to make side deals with tenants if the plan is to get them to go and you will have to build a relationship with them to gain access. They will be scared they are getting evicted and rightfully so, so you have to explain how this would work. They may not like it. But if they will be difficult, then it won't be worth it unless the deal is so good that you and the subsequent assignee are fine, sight unseen, which is rare.

If UNLICENSED BROKERS are showing properties they do NOT own that is BROKERING real estate.
 

Real Estate Activities Requiring Licensure

In Florida, it is unlawful to engage in the following real estate related activities for compensation without possessing a real estate broker’s license or sales associate license.

• Advertising or marketing another person’s timeshare or property for compensation.
• Auctioning or attempting to auction another person’s property for compensation.
• Buying or attempting to buy real estate on behalf of another person for compensation.
• Listing another person’s timeshare or property for compensation.
• Operating as a real estate broker or sales associate without a license.
• Renting, leasing, or attempting to rent or lease real estate on behalf of another person for compensation.

Penalties for Unlicensed Practice of Real Estate

The crime of Unlicensed Practice of Real Estate is a Third Degree Felony and assigned a Level 1 offense severity ranking under Florida’s Criminal Punishment Code.

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.

Defenses to Unlicensed Practice of Real Estate

In addition to the pretrial defenses and trial defenses that can be raised in any criminal case, specific defenses to the crime of Unlicensed Practice of Real Estate are:

For Sale by Owner

A person who personally owns real estate or a timeshare may sell, rent, or dispose of the real estate or timeshare without being licensed.

Likewise, a person may buy or rent real estate for them self from another person without being licensed.

I HAVE NEVER SEEN AN UNLICENSED BROKER THAT WAS NOT VIOLATING BROKERAGE LAWS.

@john Thedford… it's funny that some brokers think they are the "experts" in real estate. I wonder if you missed the day in RE class that states "for another" which means if you are not doing it for another but for yourself that is entirely legal, with the wording "for a fee". A fee to assign the contract. When entering in a contract with someone, you have equitable interest, that in turn gives you the right to resell or assign the real estate contract. If not, contractors would not be able to place liens on properties. In terms of advertising, if said information is listed in your email to a buyer, there is nothing wrong with that. No marketing should ever go online at all. I was an agent and I work in mortgages. I have done both sides of industry. You have a good day!!!!

Funny you did NOT disagree with my post about what a scam is. And sending out emails ADVERTISING is just that and requires a license. I just turned in a FRAUD and SCAMMER for that. The state found my complaint to be legally sufficient.

@John Thedford , you need to calm down and stop spewing your garbage in every forum. I am a former attorney, a licensed real estate agent in NJ. You quoted FL law. I am not in FL. I run an on-market real estate agent business and an off-market property acquisition business that discloses on all postcards that I have a real estate license. Wholesaling does not have to be done as a licensed agent. Sellers are permitted to sell their real estate however they please. Private sales are commonplace. You are targeting a percentage of wholesalers that do use bad tactics and illegal means to defraud homeowners, but there are many of us who know much more than you and practice our business in open and forthright ways to all parties involved.

You absolutely can send out emails about off-market properties. Do you think there is prohibition in the United States against privately marketing real estate? Sellers do not need a license to sell or post their home on Facebook. What about a friend of a seller who tries to help them by posting their FSBO listing? Whatever problems you have with wholesaling, you don't need to dump it into every forum like a psychopath who has been scorned by one deal too many. There are plenty of ethical wholesalers who aren't violating any laws by becoming a middle person for a sale.

What you are spazzing out about is private citizens acting as if they are real estate agents. As long as you clearly identify your role in the transaction, disclose the wholesale price and original price, and be very clear about how the transaction works off-market, you are not violating your requirements under state law for real estate. In some states, the regulations are different, but nothing can prevent ethical wholesaling.

You aren't paying attention in all of these forum blasts to who is talking, what their background is, and how they are responding. So do everyone a favor and stop. Enjoy your business however you want, but stop reverse trolling because you have an issue with wholesaling.

Yes I did quote FL law. According to DBPR it is not legal to market property you do not own for compensation unless licensed. Emails are marketing according to the state. I have turned in lots of these scammers and seen the state issue cease and desist.

@John Thedford , you are aware there are 49 other states, right? Here are some questions to ponder that would become relevant in fighting your "turning in" of wholesalers and the cease and desist. I was a practicing attorney in FL for more than 10 years.

1. Does a contract to wholesale a property, when signed legally by both parties, convey an ownership right in the purchaser?

2. If yes, then they would be a quasi-owner, with a signed contract, who can market the property. Especially if, within that contract, it was clearly stated that they would be wholesaling the house thereby giving the seller notice that they would be marketing it and also would be in the seller's best interest if the wholesaler had an out clause.

3. When saying emails are marketing, does the broadly apply to all emails? Does an email signature at the bottom of an email constitute marketing? The answer is likely no.

You like to quote yourself and your business dealings as gospel, but where is the proof? And what are you trying to gain by trolling Bigger Pockets, a site that touts wholesaling for unlicensed agents as a career-building opportunity, for so-called scammers. Wholesaling does have bad people in it, so does hard money lending, but you won't find me trolling all your hard money posts. There is also an inherent conflict in many deals between RE agent and hard money, especially if you have ever lent to one of your deals.

Originally posted by @Jonathan Greene :

@John Thedford, you are aware there are 49 other states, right? Here are some questions to ponder that would become relevant in fighting your "turning in" of wholesalers and the cease and desist. I was a practicing attorney in FL for more than 10 years.

1. Does a contract to wholesale a property, when signed legally by both parties, convey an ownership right in the purchaser?

2. If yes, then they would be a quasi-owner, with a signed contract, who can market the property. Especially if, within that contract, it was clearly stated that they would be wholesaling the house thereby giving the seller notice that they would be marketing it and also would be in the seller's best interest if the wholesaler had an out clause.

3. When saying emails are marketing, does the broadly apply to all emails? Does an email signature at the bottom of an email constitute marketing? The answer is likely no.

You like to quote yourself and your business dealings as gospel, but where is the proof? And what are you trying to gain by trolling Bigger Pockets, a site that touts wholesaling for unlicensed agents as a career-building opportunity, for so-called scammers. Wholesaling does have bad people in it, so does hard money lending, but you won't find me trolling all your hard money posts. There is also an inherent conflict in many deals between RE agent and hard money, especially if you have ever lent to one of your deals.

 As an attorney I am sure you are aware that one cannot give another permission to violate the law. DBPR just found a complaint I filed to be legally sufficient. The person was advertising property they do not own via email. 

P.S--state investigators stated that BP is...and I quote: "a hotbed of illegal activity". 

@John Thedford , just because your complaint was legally sufficient doesn't mean anything. That means you followed the rules in filing and presented the evidence. And maybe you actually do have a case against an unscrupulous wholesaler. But the real question is:

What are you trying to gain?

Are you really trying to help people? Or are you trying to discredit wholesalers in order to try to get that listing business in your state?

Why the F are you all over this site then? You are participating in a hotbed of illegal activity. No one was counseling anyone to violate FL law. You aren't even responding to all of the points.

Ask them if a person has a property under contract, with clear language to tell the seller that they intend to look for an end-game buyer and that they will make middle person money, does it give them an ownership interest? Chances are it does, if all of the language is disclosed and ethical.

Wholesaling is a sketchy business, but that doesn't mean that there aren't people who do it the right way, with and without a license. And spending all your time focused on FL RE and law when it's 1 of 50 states is asinine.

Originally posted by @Jonathan Greene :

@John Thedford, just because your complaint was legally sufficient doesn't mean anything. That means you followed the rules in filing and presented the evidence. And maybe you actually do have a case against an unscrupulous wholesaler. But the real question is:

What are you trying to gain?

Are you really trying to help people? Or are you trying to discredit wholesalers in order to try to get that listing business in your state?

Why the F are you all over this site then? You are participating in a hotbed of illegal activity. No one was counseling anyone to violate FL law. You aren't even responding to all of the points.

Ask them if a person has a property under contract, with clear language to tell the seller that they intend to look for an end-game buyer and that they will make middle person money, does it give them an ownership interest? Chances are it does, if all of the language is disclosed and ethical.

Wholesaling is a sketchy business, but that doesn't mean that there aren't people who do it the right way, with and without a license. And spending all your time focused on FL RE and law when it's 1 of 50 states is asinine.

Wholesaling is indeed sketchy and even more so without a license. UNLICENSED BROKERS use their purchase agreements as defacto listing agreements.

Bringing an end buyer is indeed brokering whether people want to admit that or not.

The other poster stated that these operators are NOT doing this for another but for themselves. Why then is a license required to market properties one does not own? Because advertising to sell properties is doing so FOR ANOTHER. 

I will not sit by and be quiet when I see what I believe is something wrong. Others may do so. I will continue to file complaints against unlicensed brokers. 

If someone has a property under contract and they state they intend to middle-man the deal that IS a brokerage activity. The unlicensed scammers will never admit that. The worst part is if they have no success unlicensed brokering the deal that they use BS escape clauses to walk and screw the seller over. State of FL investigators call these operators "predators" and state the most common "victims" are those will a poor grasp of the english language and the elderly. I will continue to fight against those types of operators. 

You live in Florida, the most transient state in America. And also the highest percentage of elderly people. Scammers go to Florida just for these reasons and the tax, but that doesn't mean every wholesaler is a scammer. If you refer to your own profile where you describe how you loaned hard money and then bought certain properties and other quasi-relationships, there are issues there as well. You seem like the type of person to follow all the rules, but I'd keep a watch over your disclosures in real estate that you are also a hard money lender because I didn't see that on your website.

Originally posted by @Jonathan Greene :

You live in Florida, the most transient state in America. And also the highest percentage of elderly people. Scammers go to Florida just for these reasons and the tax, but that doesn't mean every wholesaler is a scammer. If you refer to your own profile where you describe how you loaned hard money and then bought certain properties and other quasi-relationships, there are issues there as well. You seem like the type of person to follow all the rules, but I'd keep a watch over your disclosures in real estate that you are also a hard money lender because I didn't see that on your website.

You won't find me less than transparent. Never ever had any complaint filed and never threatened with the action. Have also owned businesses in different states that were subject to various audits by the states and never a single issue. You only have to look over your shoulder and worry when you do something wrong. 

@Cameron Strong depends on ur buyers. My first deal had tenants and here in CA if they’ve occupied the property for over a year then they get 60 day notice instead of 30. My buyers did not want to close until they were gone. Luckily the tenants left when they were supposed to. It was a long 60 days though lol

@John Thedford

I think that legal aspects not withstanding, to be ethical someone attempting to wholesale a deal would have to disclose by way of contingencies that his deal is dependent on flipping the property to the ultimate buyer (assuming that he won’t close without that), and not suggest otherwise by merely relying on other (weasel) contingencies.

The wholesalers that intend to fulfill the contract and close the purchase whether or not they are able to flip the deal ( assuming any real contingencies are met), are real wholesalers and not disguised middle men.

I’m convinced that the vast majority of new people drawn to “wholesaling” (1) have little or no investment capital (2) have no ability to close a purchase i.e. need to flip the contract in order to close, and (3) have no INTENT to close, only to flip the contract.

Unless

Hence, they throw around terms like “equitable interest”, “principal” and “selling the contract not the property”, in order to (hopefully) skirt the legalities of their activities.

In all states, representing a seller or buyer in a real estate transaction, for compensation, is illegal unless one is licensed. However, different states interpret the various activities we define as “wholesaling” differently. Some have a very broad definition of representation, some more narrow. Further complicating things, some real estate commissions actively pursue any and all violators, some are much more passive.

The worst, from an ethical perspective, are those that try to appear as if they are the end buyer, are ready to close as long as the standard contingencies are met, but in actuality have no intent to close, just want to flip the contract, or use a double escrow closing, and in fact won’t close unless they do find a real buyer. These type of misleading offers have caused numerous sellers who believe that they are dealing with a real buyer to lose precious time in selling their house, and hence lose money and if the sale is distresses may ultimately cause the seller to lose the equity in his house that might have been saved if he was able to market the house to a real buyer.

Now, if the buyer were to disclose his real intentions, and with full disclosure the seller were to agree, I would believe that the wholesaler easing acting ethical. Whether he was acting legality is a more specifically state or local issue.

@Cameron Strong here’s what I do. I tell the seller, “Look, I’ll need to partner with some people on this deal so I am going to be bringing by investors who may be interested. I’ll only move forward with the deal if I can find someone to partner with me on it or if I find someone who will pay me a little more.”

Just be honest with everyone and let them know what you’re doing and they will understand. A lot of times wholesalers think they need to hide info to make the deal work, when in reality it just makes everyone uneasy.

Make sense?

Originally posted by @Kyle Clabby :

@Cameron Strong here’s what I do. I tell the seller, “Look, I’ll need to partner with some people on this deal so I am going to be bringing by investors who may be interested. I’ll only move forward with the deal if I can find someone to partner with me on it or if I find someone who will pay me a little more.”

Just be honest with everyone and let them know what you’re doing and they will understand. A lot of times wholesalers think they need to hide info to make the deal work, when in reality it just makes everyone uneasy.

Make sense?

 You are a licensee being transparent. A licensee friend of mine just did the same thing. Those without a license making the same statements and promises are brokering regardless of their bogus argument that they are selling a contract.

Originally posted by @Don Konipol :

@John Thedford

I think that legal aspects not withstanding, to be ethical someone attempting to wholesale a deal would have to disclose by way of contingencies that his deal is dependent on flipping the property to the ultimate buyer (assuming that he won’t close without that), and not suggest otherwise by merely relying on other (weasel) contingencies.

The wholesalers that intend to fulfill the contract and close the purchase whether or not they are able to flip the deal ( assuming any real contingencies are met), are real wholesalers and not disguised middle men.

I’m convinced that the vast majority of new people drawn to “wholesaling” (1) have little or no investment capital (2) have no ability to close a purchase i.e. need to flip the contract in order to close, and (3) have no INTENT to close, only to flip the contract.

Unless

Hence, they throw around terms like “equitable interest”, “principal” and “selling the contract not the property”, in order to (hopefully) skirt the legalities of their activities.

In all states, representing a seller or buyer in a real estate transaction, for compensation, is illegal unless one is licensed. However, different states interpret the various activities we define as “wholesaling” differently. Some have a very broad definition of representation, some more narrow. Further complicating things, some real estate commissions actively pursue any and all violators, some are much more passive.

The worst, from an ethical perspective, are those that try to appear as if they are the end buyer, are ready to close as long as the standard contingencies are met, but in actuality have no intent to close, just want to flip the contract, or use a double escrow closing, and in fact won’t close unless they do find a real buyer. These type of misleading offers have caused numerous sellers who believe that they are dealing with a real buyer to lose precious time in selling their house, and hence lose money and if the sale is distresses may ultimately cause the seller to lose the equity in his house that might have been saved if he was able to market the house to a real buyer.

Now, if the buyer were to disclose his real intentions, and with full disclosure the seller were to agree, I would believe that the wholesaler easing acting ethical. Whether he was acting legality is a more specifically state or local issue.

 Very well put sir. I have met the victims and seen the games. I will continue to speak out against those victimizing sellers and often skirting laws.

@John Thedford @Cameron Strong Don’t listen to people like this. The world is changed through positive thinking, innovation, having the right attitude. People like this will always try to drag you down so you need to ignore it.

Move ahead with a positive attitude, be honest, and work hard and it will all work out in the end