Wholesaling as a Licensed Agent- Disclosure

[Bryan Normal]

So I wanted to wholesale (as a vehicle to eventually get into flipping) before I ever wanted anything to do with becoming an agent. Then I discovered the Michigan 5-transaction rule, and figured "Fair enough, I'll bite the bullet, be above-board, and just get the license". I have a sponsoring broker lined up, who knows my investment intentions, and I am currently studying the course materials.

In the legal part of the course, it states, "Any advertising done by a salesperson or an associate broker must be under the supervision of and in the licensed name of that individual’s broker. Effective January 1, 2018 the Occupational Code was clarified on advertising stating that the salesperson or team name cannot be larger than the broker’s name. This rule only regulates relative type size (i.e., points) and does not require similarity in type style, boldness or italics. Exceptions: A salesperson may advertise to sell property under his or her own name if the property is his or her principal residence. A salesperson may advertise property for rent or lease under his or her own name if the he or she is the owner of the property."

Given that wholesalers are already expected to be basically licensed now (or go through an agent on transactions over 5), how do licensed agents who want to wholesale, do so without taking commission or running it through their brokerage? I am fine with disclosing to someone that I am an agent, but I don't want my wholesaling efforts (marketing, and closing contracts) to have the brokerage involved. My brokerage said this was fine too- they said any investments we do, they don't expect to be involved in.

Any clarification on this would be great. If assigning contracts is legal, which it clearly is, then wholesaling is legal. And if double-closing is legal, which it clearly is, then wholesaling is legal. But these laws seem to be strongly trying to make wholesaling illegal through other means, so that a brokerage gets a cut. I understand I'm held to a higher standard as an agent to disclose, but I am only becoming an agent in the first place because I was forced to legally. Thanks!

[Wayne Brooks]

@Bryan Normal You’re realizing the catch 22 here….in order for your license to “make you legal” you have to use it as it was intended….actually working As An Agent, with everything going through your broker. Your license makes it legal for you to work as an agent under your broker….not as an individual wholesaler.