Legal Marketing to Tenant Buyers - Without a RE License

6 Replies

I am looking to scale on my sandwich lease options (purchase) deals this year. I also want to really make sure to do everything by the books. I do not have a real estate license..yet. What is the legal way, pref. in PA to market a sandwich lease option deal that I have under contract with a seller to potential tenant buyers?

I know I've heard it's illegal to market the house if I'm not the owner. Much like traditional wholesaling, I should market the contract itself. Otherwise I'm acting as a realtor/broker. I'm currently doing 3 sandwich lease options and havent had issues, but I jumped in head first by learning from YouTube videos because I so desperately want to get involved with real estate investing in anyway possible. And since I dont have much money and am rebuilding credit, this seemed like the best fit. Brandons book on no and low investing does not go into much detail at all about legality and techniques and most videos do not either.

Thoughts from experience?

@Corey Woodman

I replied to you other post but as far as marketing to buyers, in my opinion, you have to have a license or an interest in a property. I've heard people say to build your buyers list first but that makes you a buyers agent looking for a property to match to the buyer. I would think you need a license for that.

So, find a property, make an offer and make sure the seller knows what your business model is. 

@Corey Woodman

Licensing issues are dealt with by the PA Real Estate Commission. As far as I know, they never expressly comment on the different variations on wholesaling. No idea if they have any interest in commenting on it. 

Often times, people get into trouble with the PA Real Estate Commission because someone involved in the deal files a complaint with the Commission. In my experience, the more "consumer" like is the transaction, the more likely that the Commission will come down hard on you. But that's just my experience watching others deal with the Commission.  

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Corey Woodman

Got that. The danger is that if the PA Real Estate Commission decides to come after you, you're not going to "win" in any scenario. It's a government agency and basically immune to counterclaims. So if they decide to come after you because they think you were doing something wrong, they can easily make you spend five figures in defending the claim even if you can eventually get the court to agree with you. That's why often times realtors and brokers just settle the claim with them.

Nowadays I spend most of my time running a construction company so I don't really do too many legal works outside of what I already have. But if you need legal help, feel free to PM me and I can put you in touch with folks who might be able to help. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.