Tom Krol and Vincent Polisi
Centre Hall, PA · Member since 2015 · 48 posts · 20 votes
Tom Krol and Vincent Polisi
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Atlanta, GA · Member since 2018 · 1 post · 16 votes
8yI am a licensed practicing attorney. I also have had a real estate license in Georgia in the past. Let me first say the standard things lawyers say :).......that my comments only apply to Georgia where I practice. Also I must also add that in no way should my comments be construed to be giving anyone legal advice either in Georgia or any other state, and I highly recommend you speak with a knowledgeable real estate attorney in your jurisdiction to evaluate the legality and ethics of real estate wholesaling. I do not know, nor do I have any relationship with Mr. Krol or Mr. Polisi.
I have examined the licensing laws of Georgia as it applies to this subject. I believe that real estate wholesaling is cutting it as close to the line of practicing real estate brokering without a license as you can possibly get without one. In fact, I could easily see the Georgia legislature making a one word change to the statute to include "wholesaling" to change the face of this business model for anyone in this state (which is usually followed by other states).
For that reason, I suggest everyone is this business do so with great integrity and transparency with buyers and sellers alike. Here is the dilemna: I have heard both sides of the debate. Polisi's comments that one should explain up front that you may seek to "assign" the deal to cash investor's you represent is valid. Under no circumstance should you shop a deal until to you have a contract to purchase the property and have secured an equitable interest. Here is where it gets sticky.
While normally, earnest money is not considered essential consideration in enforcing a valid real estate contract (highly technical legal discussion here), in wholesaling, we are talking an intent, not to actually purchase, but obtain equitable interest. I don't know that the courts would see earnest money in the same way in a wholesaling transaction as it does in a tradition purchase deal. I would want to stay clearly on the side of giving something to the seller for obtaining my equitable interest. At least it makes a modest showing of giving the seller something for tying up his property. I could see this as being an area of major litigation. If the courts ruled against you on this issue, you would then be working as a broker and violate the licensing law.
Also, it is paramount that your communication and contract with the seller explain your intentions. If I were wholesaler, I would go so far as to give them their market options pro's and con's, and even explain their right of bankruptcy to freeze their assets, both pro's and con's. But if you venture into those waters you now risk running afoul of the unauthorized practice of law, so perhaps that is best left at "you need to consult with an attorney on that issue."
As for the inducements I often see, such as "We buy houses for cash", I would put a disclaimer on there stating that "we" reserve the right to assign a deal or sell the property upon purchase to other cash investors. Again, the idea is transparency to the seller.
So in Georgia, can wholesaling be done legally, it is my opinion that it can be, but you need to travel cautiously. You are one word away from OCGA Sec.43-40-1 being amended to have everyone in this state scrambling to the Barney Fletcher Real Estate school.
To use a favorite lawyer saying, "pigs get fed. Hogs get slaughtered." I can assure you have seen this play out in practices areas of our firm. If you allow this strategy to turn into the wild west of real estate speculation with people out their making more money "teaching" others on how to get rich than actually wholesaling real estate with ethics and integrity, I promise you your state will take notice. And it won't take too many people complaining to get the state's attention. Think of the licensing dollars the state stands to make by making that one simple amendment in the name of protecting the consuming public.
My advice to all of those in this area......don't make the mistake of so many of my colleagues in the practice of law. Police yourself with ethics and integrity, and you will enjoy this investment area for years to come. I would even venture to say creating a trade organization promoting the virtues of ethics and integrity in the wholesaling profession would be a capital idea. Show the lawmakers that you work together to promote the improvement of the profession for all, and not just getting rich. But..... keep cranking out students with wild dreams of wealth AT ALL COST, and you will kill it for everyone.
Again, no skin in the game on either side. Just a one lawyer's opinion in Georgia. Happy investing and well wishes to you all!
Greg Rogers
Rogers, Hofrichter and Karrh, LLC
PS. You might wonder why I am own this site. I am intrigued by the opportunities of wholesaling. But I do have concerns after examining this debate that wholesaling may look like several of my practice areas completely gutted by lawyers swooping in for the money grab and leaving town in a burning pile of rubble. While I don't proclaim to know all the ins an outs of wholesaling, I do know something about how to build a multimillion dollar 25 year law practice. And I can tell you what I learned.........take care of the client first (in this case the seller), and everything else will take care of itself.
51 Replies
When the question of legality and wholesaling comes up always speak with an attorney. Go to a Real Estate Attorney to answer any legal questions. I would recommend that the Attorney must be:
- In the state where you are planning on Wholesaling.
- A litigating attorney.
- Experienced with the agent’s/broker’s regulatory board for your state.
- Familiar with Wholesaling, if you are explaining Wholesaling to them they are the wrong attorney.
- If they are also a licensed broker, that is helpful but not mandatory.
You will spend $150 to $850 for their advice and it will be the best money you’ve ever spent.
Emotions and conjecture on the topic of wholesaling vary widely. There are many opinions, rumors and recommendations but if you want to get straight to the right answer find an Attorney.
Whenever anyone is giving you legal advice always interrupt them and ask them if they are an Attorney first, this will save you time, your number one resource.
You can find a great Attorney referral from your local REIA, but remember that whoever recommends them will also want to give you legal advice, just say thank you and call the attorney directly anyway.
You will want clarity on all of the risks, how to market a Purchase Agreement (not the house), assigning (on and off the HUD) vs double closing, intent, disclosures and equitable interest. Also, no matter what any "Guru" tells you about how great their contracts are, have your attorney review them first before using them!
As a side note I always recommend getting a license. I am NOT an Attorney but this solves almost every potential issue with wholesaling real estate and is very easy to do. Good luck!- Centre Hall, PA · Member since 2015 · 48 posts · 20 votes10yTom Krol Thanks for the reply. Greatly appreciated.
- Wholesaler · Madison, WI · Member since 2014 · 7 posts · 7 votes10yAs an extension of Tom's post, free legal advice is worth what you pay. When you pay a lawyer, that lawyer (or law firm) owes you certain duties. With free legal advice, you have no recourse if their advice is wrong. And Tom is also correct that all lawyers are not created equal. You are paying for knowledge AND experience.
- Investor · Vancouver, WA · Member since 2012 · 194 posts · 125 votes10y
Let me step in real quick, because I've also had the (unfortunate) privilege of entering into a discussion with Vincent on a facebook page.
I've actually been investigated for unlicensed broker activity in Colorado, Washington, and Oregon. Each of the three investigations were unpleasant, and time consuming - but I didn't receive a a penalty, have charges levied against me, or anything of the sort after the investigations were completed.
And yet, when I spoke with Vincent about this, he adamantly told me I was wrong, got personal with me, and became incredibly aggressive and hostile. What?
(As a disclaimer, I am planning on getting my license within the next few months to quiet any sort of unlicensed broker claim about me. Even though I know I'm legit, the cost of getting a license is far worth it than to endure and endless stream of investigations).
Vincent has ulterior motives, because he has a course, podcast, and mentor program talking about "getting the deed" before marketing the home. This is also a fantastic strategy, and also quiets any sort of unlicensed broker activity claim against you - but it's not the only way to wholesale, and he seems to view the investing world as a "Zero-Sum Game," when the majority of other investors understand that this community works far better when we work together and help each other, not sling mud at other gurus who teach a different way of investing than you do.
- Real Estate Professional · Fernandina Beach, FL · Member since 2016 · 12 posts · 1 vote10y
Thanks Casey Carroll,
But I can't see paying a guru $1000 a month
- Virtual Real Estate Investor · Santa Rosa Beach , FL · Member since 2008 · 76 posts · 77 votes9y
@Tom Krol is a well documented fraud and pathological liar who can't even articulate the definition of wholesaling.
He's been busted for teaching fraud in the inducement, fraud in the factum, false advertising, bait and switch, and illegally brokering without a license.
It isn't necessary to take my word for it, you can hear his best friend state in his own words that Tom taught him to do all of the things mentioned above on my podcast.
The way the scam works is that they have people apply to join the Rhino Group. The sole purpose of this is to setup a phone call for a fishing expedition to determine how much liquid cash or credit the prospective student has available and then to go for all of it which is why there is no set price to join the Rhino Group and why you'll be hard pressed to find two people who've paid the same amount.
I can say these things without fear of any retribution for slander, defamation, or libel because they're all well documented by Tom on video and in his own voice.
Tom has no issue making false claims and has all the traits of a pathological liar. When asked to proof up with HUD-1s on the false claim that he closed over 100 deals in his first 18 months in the business (a deal closed every 5 days for 18 months starting off knowing nothing), he blocks people, kicks them out of his group, or otherwise works to deflect the conversation.
Why?
Because he didn't close 100+ deals in his first 18 months in the business and the shills that run Bigger Pockets know this but don't care and promote it anyway because it creates download numbers in iTunes and ad clicks on the site that generate revenue.
The issue at hand is that Tom has no concern for whether or not his knowingly fraudulent and illegal methods taught to students lands the students in litigation or under arrest. Similarly, he has no concern for the sellers they hamstring, lie to, and hold hostage with the bogus contract clauses and techniques they use.
If all that wasn't bad enough, he has no problem fraudulently defaming other people.
I've served Tom a demand letter for slander, defamation, and tortious interference and now that he's been dumb enough to publicly document his income in a public forum, we're proceeding with litigation. - Wholesaler · Atlanta, GA · Member since 2016 · 19 posts · 14 votes9y
@Vincent Polisi The only WELL DOCUMENTED fraud is all the hateful crap you and your minions continuously spew about this guy and almost every other coach who is NOT you! Busted?? By who, YOU?? What a joke! You are an ANGRY jealous little man who has it in for Krol, Mccall, Terry and pretty much anyone who has more success than you do. I feel sorry for you bud.
If you dedicated half as much time helping people as you do knocking them down you would probably be doing ok for yourself. The only scammer around here is you. A scammer that accuses other people of scamming, oh the hypocrisy. You aint fooling anyone pal.
Bigger Pockets are scammers too right?
Google search shows you all you need to know about this guy.
- Wholesaler · Atlanta, GA · Member since 2016 · 19 posts · 14 votes9y
Originally posted by @Casey Carroll:
Let me step in real quick, because I've also had the (unfortunate) privilege of entering into a discussion with Vincent on a facebook page.
I've actually been investigated for unlicensed broker activity in Colorado, Washington, and Oregon. Each of the three investigations were unpleasant, and time consuming - but I didn't receive a a penalty, have charges levied against me, or anything of the sort after the investigations were completed.
And yet, when I spoke with Vincent about this, he adamantly told me I was wrong, got personal with me, and became incredibly aggressive and hostile. What?
(As a disclaimer, I am planning on getting my license within the next few months to quiet any sort of unlicensed broker claim about me. Even though I know I'm legit, the cost of getting a license is far worth it than to endure and endless stream of investigations).
Vincent has ulterior motives, because he has a course, podcast, and mentor program talking about "getting the deed" before marketing the home. This is also a fantastic strategy, and also quiets any sort of unlicensed broker activity claim against you - but it's not the only way to wholesale, and he seems to view the investing world as a "Zero-Sum Game," when the majority of other investors understand that this community works far better when we work together and help each other, not sling mud at other gurus who teach a different way of investing than you do.
EXACTLY! Ulterior motives is the understatement of the century!!
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Jason Woodrow love it wholesale guru's hating on each other..
states just need to outlaw all this selling RE without a license.. :)
- Wholesaler · Atlanta, GA · Member since 2016 · 19 posts · 14 votes9y
Originally posted by @Vincent Polisi:
so, as usual, you can't disprove anything I've stated. Let me know when you can.
Prove @Tom Krol isn't a fraud and that his best friend didn't out him.
Let's start there.
Master of deflection, LMAO!! You have a future in politics.
- Wholesaler · Atlanta, GA · Member since 2016 · 19 posts · 14 votes9y
@Jay Hinrichs Agreed! Make it a level playing field. Then guys like @Vincent Polisi will have to figure out a new angle. Imagine having to work for a living!
- Virtual Real Estate Investor · Santa Rosa Beach , FL · Member since 2008 · 76 posts · 77 votes9y
I don't "wholesale" so there's no competition. As usual, no one can proffer any prima facie evidence that what I've stated is incorrect and instead meander off on strawman deflections.
@Tom Krol is a well documented fraud.
Prove me wrong. Let's start there.
- Wholesaler · Atlanta, GA · Member since 2016 · 19 posts · 14 votes9y
According to you.
But according to Google (and dozens of others who've had the unfortunate luck of getting involved with you) @Vincent Polisi is the only well documented fraud around her. Poor guy.
- Virtual Real Estate Investor · Santa Rosa Beach , FL · Member since 2008 · 76 posts · 77 votes9y
is this the best you can do? As you've so generously proven, any idiot can put whatever they want on the Internet. For that, we thank you.
Now, back to the topic at hand, can you or can you not prove that the allegations made about the fraud known as @Tom Krol aren't true because we have recorded testimony from Tom and others that everything I've stated is 100% accurate and factual?
Originally posted by @Jason Woodrow:
@Vincent Polisi The only WELL DOCUMENTED fraud is all the hateful crap you and your minions continuously spew about this guy and almost every other coach who is NOT you! Busted?? By who, YOU?? What a joke! You are an ANGRY jealous little man who has it in for Krol, Mccall, Terry and pretty much anyone who has more success than you do. I feel sorry for you bud.
If you dedicated half as much time helping people as you do knocking them down you would probably be doing ok for yourself. The only scammer around here is you. A scammer that accuses other people of scamming, oh the hypocrisy. You aint fooling anyone pal.
Bigger Pockets are scammers too right?
Google search shows you all you need to know about this guy.
I do not know either of them but it seems like you are doing the same thing. What exactly are you disputing ?
- Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes9y
Gurus should prove their credentials and customers should hold them accountable for proving these "credentials" before buying in. Lets see the 100 properties in 18 months. Blank out the sellers name and the sales numbers and lets see these 100 properties! Anyone legit would post this publicly and shut up the neigh sayers.
- Business Owner · Madison, WI · Member since 2017 · 79 posts · 59 votes9yI don't agree with any of this, it's all BS. If you actually understand contract Law shouldn't let any of this guru Bs get to you.
- Tolland, CT · Member since 2014 · 2 posts · 5 votes9y
Vincent documented everything he was saying.
All those "gurus" are teaching things in violation of state and federal laws (review the videos from the State of Ohio as just an example of those.
There are many others like Tom Krol who there is documented evidence of them committing fraud or teaching students to commit fraud.
- Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes9y
At the end of the day, its all about the money for a lot of these guys. It may start out as a way to help people, but quickly you see coaches or "gurus" develop a program that you have to pay for. I've gone through a few podcasts now that started out with really good info and it was very detailed with no sales pitches, then they develop a program and you see the switch. They start only brining guests on that are students and part of their group, such as Rhinos, and their students tell you about how they made 40k on a deal. All a big sales pitch to join their group.
The real content is gone. Thats how I see Toms stuff now. Go back and listen to earlier stuff and compare it to recent podcasts. Justin Williams did the same thing. Most of his guests are part of his House Flipping Formula group. They figured out a new income stream, good for them, but you gotta take a step back and realize when you're listening to this stuff you're being pitched.
- Metairie, LA · Member since 2013 · 13 posts · 2 votes9y
I like Vincent's podcasts but having the calls in a specific order for the beginner would've been nice and he could be a bit more helpful when reviewing a contract...however, having said all that he was always cool with me and his method of contract assignment, not "wholesaling as it's commonly known, via bond for deed seems pretty sound
- Denver, CO · Member since 2015 · 2 posts · 1 vote9y
Can someone please explain what Vincent feels is being taught by Tom and other gurus that could send us to jail or have us questioned? One other person on this page said he was questioned in 3 states. I'd like to be sure I'm stating things legally when I speak to sellers about being a cash buyer. Should we instead say that we know of cash buyers who might like to purchase their property?
Would a few of you more experienced wholesalers give some examples of how to talk about buying a seller's property in the proper way?
I've wondered if the only legal way to do this is to actually have the cash and buy the house.
Thanks for your input. - Bossier City, LA · Member since 2015 · 8 posts · 8 votes9y
If I am understanding what Vincent was saying, Is that when the "gurus" teach you to approach a property owner with the words "I buy houses for cash", and you actually have NO intention of doing so, but your plan is to negotiate a discounted price with the owner, and then market the property to actual cash buyers, you have committed fraud, by misrepresenting yourself as a "cash buyer", PLUS, if you are not a real estate broker/agent, by marketing the PROPERTY, and not marketing the sales contract you negotiated, you are also brokering real estate without a license. I'm not an attorney, but this might be a moment to step back and re-evaluate the "exit strategies" taught by the gurus!? And yes, if I heard Vincent correctly on a couple of his podcasts, the only way to truly "wholesale" a property is to PURCHASE, mark it up, and THEN re-sell it as the legitimate owner, OR --- fully disclose that you are NOT the cash buyer, but that you intend to sell (assign) the sales contract itself- NOT the property to a buyer for a profit. If I have made an error in this description, please feel free to correct me!
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