Hey BP!

Just received a call from a potential motivated seller looking to sell close to 5 acres of land. Is there any issues with this vs wholesaling single family ? Any tips or insight on evaluating this potential deal ? 

Thanks ! 

Hi @Stephanie Lewis Congrats on getting sellers calling you! As far as your question of whether there are any issues, there is nothing different in wholesaling vacant land vs a single family residence. That being said, there are issues surrounding wholesaling in general, that many "wholesalers" in Florida ignore. As long as you're wholesaling in a manner that is abiding by the FL laws regarding unlicensed brokerage, then there is no difference between wholesaling vacant/improved land. Hope this helps and good luck to you!

There are only two ways to LEGALLY "wholesale" in Florida:
1. be licensed
2. own it

Using contracts to broker is NOT legal in FL but is legal in some states. The relevant statute is 475.43.

@Stephanie Lewis , @Marty True covered the right points. Just don't represent yourself as a licensed agent but you should be fine. Before marketing the property (once you get under contract), be sure to do some background work to see if the lot can be split and what can be built on it for its current zoning that may help you market it. Also, check to see what utilities and upgrades have been done, if you want to go the extra mile check to see what kind of trees are on the property that may need a permit to be removed which can be an obstacle.

Originally posted by @Jeremy Kloter :

@Stephanie Lewis , @Marty True covered the right points. Just don't represent yourself as a licensed agent but you should be fine. Before marketing the property (once you get under contract), be sure to do some background work to see if the lot can be split and what can be built on it for its current zoning that may help you market it. Also, check to see what utilities and upgrades have been done, if you want to go the extra mile check to see what kind of trees are on the property that may need a permit to be removed which can be an obstacle.

 You are giving BAD information and quite frankly a violation of licensing laws. One cannot advertise properties they do not own unless licensed. This includes having a contract on the property. That is not title ownership. Here are a couple of guys advertising properties they had under contract. See the results:

https://www.myfloridalicense.com/sto/unlicensedact...
https://www.myfloridalicense.com/sto/unlicensedact...

Circumventing licensing using contracts to broker is NOT legal. Sorry charlie....

@John Thedford I'm assuming he has equitable interest in the property. 

“Equitable interest”, if you mean having it under contract, has no bearing on marketing a house you don’t own in relation to FL licensing statutes.......that’s guru school misinformation.

More to the point, there is a Lot of virtually useless, low value, not in demand land in the state of FL.

@Wayne Brooks   one of my fav  movies is Glenn Gary Glen ross.. anyone wanting to resell land in low demand areas should see what it takes to actually do it.. it takes real professial.

@Jeremy Kloter   equitable interest is a misnomer and something that is taught by those just wanting to get money out of those that think they can sell real estate without proper licensing.. just go and ask the state if what your doing is legal.. you will find it is not..

you just need to close on what you aim at and resell.

I funded one of the larger turn key operations I Orlando for a few years and they bought a ton of property from Altura which was a very big wholesaling operation but those boys were licensed as they knew they needed to be.. of course wholesaling in FLA these days is pretty tough..

@Stephanie Lewis send me the land info, I might have a buyer for it.

That lot is just north of me. Where is it located? Look for wetlands and gopher tortoises too.

Originally posted by @Jeremy Kloter :

@John Thedford I'm assuming he has equitable interest in the property. 

 Equitable interest is NOT ownership. Marketing properties one does not own, unless licensed, is illegal.

@Jeremy Kloter

Brokerage Activities
A BAR SALE
Appraise
Buy
Auction
Rent
Sell
Auction
Lease
Exchange
FOR ANOTHER...assigning contracts is both selling for another...and to get the buyers....advertise for another. If they cannot assign, they cannot SELL the property they DO NOT OWN. BINGO~! BROKERING. And paying a non-licensee COULD cause trouble for an agent or broker.

I am not an Attorney or legal counselor and  I am not offering legal advise. 

I am going play devils advocate for a while.  With regards the legality of the wholesaling of property in FL:

Those waters are very grey on weather or not you need a license to legally wholesale a property.  For the record I am licensed and have been since I began my wholesaling career back in 2014.  IMO, most people blast out FL Chapter 475.43 and how it legally prohibits someone from wholesaling without a license in the state of FL without reading or fully understanding the statute.  The statute reads: "475.43 Presumptions.—In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or sales associate. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved."

I believe that the phrase "Substantial consideration" (SC) is one that provides most leeway for  unlicensed activity.  There is no definition for what is considered Substantial Consideration, however, the IRS considers $100 to meet the criteria of SC.   That used in conjunction with theory of "Equitable Rights" may provide enough to beat the the licensed activity issue.  

Now all of that being said, I would recommend getting a Real Estate license. I wouldn't want to even consider running into the authorities on an unlicensed selling claim.  

Originally posted by @Rick Allen :

I am not an Attorney or legal counselor and  I am not offering legal advise. 

I am going play devils advocate for a while.  With regards the legality of the wholesaling of property in FL:

Those waters are very grey on weather or not you need a license to legally wholesale a property.  For the record I am licensed and have been since I began my wholesaling career back in 2014.  IMO, most people blast out FL Chapter 475.43 and how it legally prohibits someone from wholesaling without a license in the state of FL without reading or fully understanding the statute.  The statute reads: "475.43 Presumptions.—In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or sales associate. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved."

I believe that the phrase "Substantial consideration" (SC) is one that provides most leeway for  unlicensed activity.  There is no definition for what is considered Substantial Consideration, however, the IRS considers $100 to meet the criteria of SC.   That used in conjunction with theory of "Equitable Rights" may provide enough to beat the the licensed activity issue.  

Now all of that being said, I would recommend getting a Real Estate license. I wouldn't want to even consider running into the authorities on an unlicensed selling claim.  

 The first part of the statute states you must have a license or the presumption is that you are brokering without a license. The part you quoted states that contracts without substantial consideration are declared void. Brokerage activities include:
A BAR SALE
Advertisiing
Buying
Appraising
Renting
Selling
Auctioning
Leasing
Exchanging
So, do this for another WITHOUT a license is NOT permitted.  I got a call yesterday from DBPR concerning a complaint I filed for using contracts to circumvent licensing law. They were VERY clear..and stated this is not permitted. No ifs, ands, or buts. ILLEGAL. Get licensed, problem solved.

@Rick Allen

Here is the way the state looks at it: If you assign and bring a buyer, you are SELLING RE without a license. If you cannot assign, you aren't bringing a buyer. The state put an end to the assignment game for non-licensees via 475.43 due to the number of people putting properties under contract and then advertising them (a violation) and/or bringing a buyer (selling the RE). Unlicensed "wholesalers" ARE BROKERING. 

Ok that is pretty clear. What about assigning beneficial interest in a trust? Or perhaps, selling a single use LLC that has a property under contract? IF you have the funds lined up to close a transaction, does the state have viable case?

Really, the answer is get licensed and avoid a lot of the issues.  

if the LLC is using contracts that is a violation. The simple answer is purchase the property and resell it and call yourself a wholesaler if you wish or get a real estate license. Either of those are legal and will keep you out of trouble.

the state does not care if you have funds the bottom line is unless you own it or are licensed that is brokering without a license.

The license keeps everything square. Some of the wholesalers are unscrupulous to buyers and sellers, thus the need for licensing. If there is no opportunity for a license to be lost, then unscrupulous activity can widen.