I am hoping to start a mailing campaign sometime in the next 12 to 16 months . But I have heard that wholesaling is not exactly legal or illegal in Wisconsin. My primary goal would be to find deals for myself. But, if I have a good response rate, I may end up with more deals than I can handle, in which case I would want to wholesale them. I would really like to talk to someone who has done serious levels of wholesaling in the state of Wisconsin and learn a little bit about some of the legal requirements to keep everything above board. I'd love to talk here, over private message, phone or over coffee if you're ever in this part of the state.
Hi Samuel. It's not illegal, but there are a few things that you could do that would certainly tip the scales in the other direction. I've done almost all of my business in WI and a good share of my deals are wholesales and assignments. I'm happy to answer your questions and help you out. Do you have a specific question I can answer here for all to see and benefit from?
I am very interested in this thread. I am not looking to wholesale, but am always looking for deals in Central Wisconsin. Samuel if you "get too many leads" please send some my way. Jacci if you have any current leads please reach out.
I am looking for mainly multifamily properties from or discounted single family homes.
Nick, I don't advertise over in your neck of the woods so I wouldn't have leads there at this time. Are you looking to invest anywhere if it's a good cash flow or are you looking to stay in your area? I guess the key point would be to know if you are planning to manage them yourself or are open to having a property management company do all the heavy lifting if the numbers still work out to be the ROI you need.
Ideally I would prefer to stay in my area so I could manage myself, but logistically I understand that being rural that is not always an option. I am open to deals across the state if the ROI is there. I would also need referrals for a property manager.
@Jacci Konkle , I'm sorry for the long silence; I've been working crazy hours on a rehab project, and threw my back out, so I finally have some time to sit down and review this thread.
My question is fairly general; how do you wholesale legally? Can I simply assign a contract? Do I need to work with a realtor to make it legal? Do I need my RE license myself?
Imagine this situation; I get a motivated seller, and I know I can connect him with a buyer. How can I legally make that happen? What actions would make it illegal?
Thanks for your willingness to answer a noob's questions.
Samuel, first of all, sorry to hear about your back! I am all too familiar with back pain and injury. I hope you feel better very soon. I use Cryotherapy to help, but there aren't any cryosaunas in Point. However, there will be soon! The owner here is from Point and is looking to put a Cryotherapy Spa in your area. I suggest giving it a try to anyone who needs pain relief as it is AMAZING! If you get over to Appleton or Green Bay, look it up. Ok...on to business...
People do assignments and wholesales all over the country. It is not illegal. If it was, title companies would take no part. Sometimes you run into a title company who says it IS illegal, but they are generally not fully informed and you can just move to the next one. Now, please remember I am not an attorney, so this is all based on my laymen understanding and my own experiences over the past 10+ years of wholesaling on my own. What would make it a licensed activity is finding a seller and connecting them with a buyer and collecting a commission or a fee for the service. What changes the dynamic is you having a contract on the home. Once you have an accepted contract to purchase the home, you have equitable interest in the property and you are selling YOUR interest. If you actually close on it and then sell it, it's very simple because you are simply selling your own property...even if it's a double closing and you're selling a minute after you buy it. If you are using an assignment and NOT closing on it, you are selling the paper (your interest in the property). You will just need to make the offer as the buyer being "your name, and/or assigns" and then you can use a simple assignment contract to sell that contract to buy the property to another investor and/or buyer. You will never be as excited to get a check than you are when you get these types of deals and they are a reward for great marketing and negotiating....they are not illegal. Again, run it by an attorney if you feel the need, but I do these all day long. As a matter of fact, if you DO go get a license, it mucks it up a bit. You do NOT need a license to wholesale or assign. Bottom line....you need an accepted offer. Hope that helps, now go hit that marketing and scrape up some winning deals to sell :-)
Jacci Kunkle... Thank you for explaining. If I may ask a question. Do banks allow assignments? For instance if I have a property under contract and find a buyer and assign my interest over. If they are getting a traditional loan will the lender honor my assignment and pay me at closing?
Sherika, that's a great question! I have only assigned properties to cash buyers, so I don't know the answer to this. They totally SHOULD, but that doesn't always mean they will. The best thing to do is to check with a few of the main lenders in your area. I would guess it would be easier if they are using a smaller, local bank or credit union than a national company or a mortgage broker. When you verify the lenders that have no problem with it, you can always require that a buyer either be cash or work with one of those approved lenders if they want to buy the home. Unless, of course, someone finds a problem with that, but I can't think of any. Cash/Lending is not a protected "class" for equal housing, so I don't know how they could have a case to say you can't stipulate where they get the funds to pay you. This is certainly a question that will require more digging though. As always, this is my best educated guess, but by no means am I a licensed lender or an attorney. A few calls to some lenders should be able to get you a pretty clear picture of what you might be looking at if a buyer needs financing though. Otherwise, just stick to "cash buyers only" in your marketing of the property. Another reason is the time to close. If you are assigning, it's unlikely you will have long enough to market, sell AND wait for a traditional bank closing with appraisals and all the other junk that goes with it. It's more of a situation for a purchase and wholesale in that situation.
I saw this thread and it immediately peaked my interest. First of all great conversation and thank you Jacci for the insight on wholesaling in Wisconsin. This definitely helped me understand the process better also.
2nd, I am looking for multifamily properties specifically in Stevens Point or the immediate surrounding area. Anything that you might have currently i'd be very interested in taking a look at. Depending on number of units I may be looking to manage it myself or have a property manager take care of it.
Thank you in advance!
Complete Newbie here...but interested in the thread. I'm looking to purchase multi-family properties around the Fox Valley, mainly in Appleton, but would be open to other cities in the valley. How can I get in touch with a wholesaler to help me with leads? Also, it wouldn't be a cash transaction, but depending on the finders fee, I could just pay it outright (if that's allowed!). Thanks for all the great questions and information, all!
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Jason, are the properties listed on the MLS? If so, I've already been over that list repeatedly. I'm looking for ones that may not be public knowledge.
sorry I missed this. No I have off market properties. Come out to the wiscoreia on Wednesday and we can talk.
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