Colorado may look to regulate wholesaling

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Colorado may look to regulate wholesaling

Matt M.
Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes

DORA just released this bulletin about wholesaling, etc here in Colorado (Denver). They may look to the legislature to put restrictions on these types of real estate transactions.

Consumer Advisory: Long-term Home Ownership Concerns (Wholesaling/Assigning Transactions and Distressed Rescue Transactions)

While these transactions serve a purpose is keeping properties moving, there is a right way and a wrong way to do it. Don't do it the wrong way.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y

well the TRUTH about wholesaling hurts..  if properties are not financeable I get that.

but the redistribution of equity to these folks who just do not tell the truth about the actual values all to 

try to make as big a score as they can.. just is wrong.. I know its a minority view on BP.. but its wrong just is. 

I wonder how these folks that wholesale and do this would feel if it was their mom or dad. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    well the TRUTH about wholesaling hurts..  if properties are not financeable I get that.

    but the redistribution of equity to these folks who just do not tell the truth about the actual values all to 

    try to make as big a score as they can.. just is wrong.. I know its a minority view on BP.. but its wrong just is. 

    I wonder how these folks that wholesale and do this would feel if it was their mom or dad. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y

    It is good to see states cracking down. 

    If you do find yourself entertaining an offer from an unsolicited investor:

    • Ask to obtain, and keep, a list of the comparable property sales in your neighborhood the investor used to come up with their purchase price offer.
    • Always keep someone else in the loop – your children, good friends, or someone you trust.
    • Always know that you can seek legal advice – in the end, it might be worth the money you spend on a consultation with an attorney.
    • Review the contract closely to see if it is assignable. Inquire into why it is assignable, for instance: to whom it is assigned and why, and how much the new buyer is paying the original buyer - AKA – an assignment fee.
    • Do not sign an assignable contract until you have had the opportunity to investigate the true value of your property and the legal implications with an attorney.
    • Take responsibility for being informed about the value of your property and the contracts that you are considering signing.
    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y
    Distressed Rescue Transactions

    Investors and real estate brokers are approaching distressed homeowners (those behind in their payments, facing foreclosure, or experiencing a medical issue). They offer the homeowner an “out” by agreeing to make the mortgage payments for them.

    Problems arise when the investor does not explain how this will be accomplished. The unscrupulous investor will:

    • Have the homeowner sign a Quit Claim Deed in which the homeowner signs over their ownership in the property.
    • Fail to explain to the homeowner that they, the homeowner, are still responsible for the mortgage.
    • Fail to warn the homeowner that they could be violating their “due on sale clause” with their lender.

    The homeowner is usually elderly or part of an at-risk population (English isn’t their first language, disability of some kind, etc.).

    The Division advises the following when it comes to these types of rescue transactions:

    • Don’t sign any documents or a deed to anyone until you have had a chance to talk with your lender and an attorney about your mortgage obligations and your legal rights.
    • Colorado has a Foreclosure Protection Act that affords you certain rights when you are financially distressed.
    • It’s best to take proactive steps when you first start having financial problems, and here are some resources that you can contact:
    • Colorado Housing Connects –
    • Colorado Foreclosure Hotline
    • Colorado Bar Association “Find-a-Lawyer” –
    • Colorado Legal Services –
    • Disability Law Colorado (Formerly The Legal Center for People with Disabilities and Older People) – 
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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y

    These brokers playing these games need to lose their license!

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    @John Thedford  those sub too investing schemes have been risky from day one.. its not new by any means.. but its still highly risky as stated.

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y
    Originally posted by @Jay Hinrichs:

    @John Thedford  those sub too investing schemes have been risky from day one.. its not new by any means.. but its still highly risky as stated.

     Yes sir--and there were LOTS of them that blew up during the GFC.

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