New member with a newb question.
Hello everyone. First time posting. I’m a small business owner in Grand Rapids Michigan, currently working on getting my real estate license, and looking invest in real estate for the first time.
I have a newb question about wholesaling. When I find a deal, how and where do I get the legal documents necessary to put the house “under contract”?
Thanks in advance to anyone willing to answer!
Welcome! Short answer- it depends....In some states, you can use the state provided contract to wholesale, though it's usually much more detailed than you want.
The BEST answer is to pay an real estate attorney- sit down and tell them what you are doing and what your end goal is and have them help you draft a contract template.
Welcome to BiggerPockets, Joseph! You found the right place for information.
- Engineered Tax Services
- (561) 253-6640
- http://www.Engineeredtaxservices.com
Welcome to the BP!
This is a great forum with very knowledgeable members that will help to guide you in the right direction.
I really like the alerts feature that can quickly guide you to current topics that might interest you: http://www.biggerpockets.com/alerts
I'd lean on your state's real estate contract written by the commission. Especially if you become a licensed agent. In my state, if you're a licensed agent, you can't work off a different contract than the one written by the state RE commission or you'll be committing an ethical violation.
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Real Estate Agent
- Bloom Real Estate Services
- http://www.gritpropertiesok.com
Thanks everyone! I appreciate the warm welcome!
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#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
Attend an RPOA.com meeting and find other wholesalers to help you.
Welcome to BiggerPockets! This is an absolutely amazing community with any and all information you could dream of finding available at your disposal.
Are you looking to get your license to primarily represent yourself, or are you thinking of making it more into a full time job and representing yourself is an added bonus?
If you are looking to primarily wholesale, it may be a bit easier for you as someone who is not licensed. Reason being, once you become licensed you will be required to hang your license with a broker. Most brokers will require you to be a part of their association, but also the National Association of Realtors. In order to get designation you have to sign off on a code of ethics. By not being licensed there are certain things that you aren't necessarily obligated to share. However, as someone who is licensed and signed off on the code of ethics, there is a fine line you should be aware of when it comes to disclosure of information.
In wholesaling you are theoretically getting it cheaper, and finding someone who will pay you more, and collecting the difference. As a licensed individual, you are technically obligated to disclose to that individual what fair market value could be for the property should they list. So one example of walking the "code of ethics" line would be maybe having a conversation where you say I'll give you $100k closing in 2 weeks, but if you go on market you could likely get $160k, but it might take an extra month for you to get your money. Are you going to be as motivated to disclose all of the information if you know disclosing all of the info might end up you you not getting as good of a deal. If you aren't licensed you aren't obligated under any type of code of ethics other than your moral compass to disclose what fair market value might be should it actually hit the market.
There are absolutely people who are licensed who wholesale successfully. However, I believe it is a risk vs. reward decision you have to make. Something happens where the owner of a property gets rubbed the wrong way, reports you to the association, and now you are being review by your associations code of ethics board with the potential to lose your license depending on how things shake out.
Getting licensed and keeping it active isn't cheap on, and there are a lot of hoops that you will need to jump through. I'm not saying don't do it, but I have a lot of conversations with people who just aren't aware of how a lot of that stuff works.
If you have any questions about monthly/annual costs of keeping your license active, or anything else while you start the journey; I'd be happy to be a resource for!