Is this an end to Wholesaling?

Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes

Bigger pockets just released an article that goes into Wholesaling and how it can become illegal to Wholesale Real Estate in South Carolina.

Here is the link for reference:

https://www.biggerpockets.com/blog/new-south-carolina-law-wo...

Wholesaling real estate seems like a great strategy but with that strategy, I've seen a lot of fishy characters who promote things that aren't true, lie to sellers directly, lie to Buyers and intentionally misrepresent information. Some of this misrepresented information includes things like after repair values, repair costs, rental comps and more.

I have even encountered wholesalers who push properties with title issues onto buyers that are not knowledgeable enough to understand that this issue could be a very serious problem.

A lot of the pitch that wholesalers make to sellers is that they were going to be buying a property with cash, even though they have no cash. So if they don't end up finding a buyer to reassign the contract to, they just lied to the seller and wasted their time.

Again, this is not to bash on all wholesalers, because I do believe that there are some decent people out there. That being said, the majority of my experience comes from people who are pushy salesman who try to get you to buy something.

At the end of the day, wholesaling real estate is like getting a net listing for a real estate agent. Except the real estate agent discloses that they will be making the difference upfront and not lying to the seller about buying their property for cash.

That being said, in many states and jurisdictions net listings are actually illegal.

My personal opinion was that a lot of this Wholesaling activity couldn't go on much longer. There had to be a breaking point, where unlicensed and unaccredited individuals could be handling real estate transactions. Lots of these individuals didn't have mentors or licensed professionals to help guide them through a transaction process. And on top of that I have seen files were there has been over five wholesalers, making a cut from the sale of a property.

So before that property went into the buyers hands it went through five other individuals. They were all making money on this transaction, and likely not being transparent with the original owner.

I remember, speaking directly with wholesalers, who would tell me not to disclose that a profit is being made.

Look, I respect the hustle. I am all for individuals trying to make their way in the Real Estate sphere. But there has to be a way that is more transparent with individuals. We can't have a large amount of unregulated people, pushing values, and figures onto the end consumer who will be the one that's really suffering at the end of the road.

To extend an olive branch there are plenty of bad real estate agents that also push things onto their clients, but those individuals work under a broker who carries a fiduciary duty to their client. Here there are no licenses regulations or implemented ethics.

What are your thoughts?

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Alan Asriants - New Century Real Estate 591 Reviews

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Will GastonPro Member

Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes

@Alan Asriants there is a ton of nuance to these situations, but I am personally done with wholesalers who require me to tell an owner that I am their "business partner."

Transparency is best for all those acting in good faith.

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Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Lydia R.:

Wholesalers who are able to close on their properties before reselling will have the advantage. I am working with a lender who is offering 100% financing to wholesalers who want to close on their deals and then resell. I think that is what the future of wholesaling will be and a lot of the bad apples will be out of the game. Which I dont think anyone will be terribly upset about.
Real wholesaling. I’m fine with this. Most others are likely to be as well. The potential to be stuck with the property is now on the wholesaler not the poor unsuspecting seller.
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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Lydia R.:

Wholesalers who are able to close on their properties before reselling will have the advantage. I am working with a lender who is offering 100% financing to wholesalers who want to close on their deals and then resell. I think that is what the future of wholesaling will be and a lot of the bad apples will be out of the game. Which I dont think anyone will be terribly upset about.
Double closing, which is totally unnecessary when end buyer exists and is located within 30 days, will increase the cost the deal. It will benefit closing attorneys, but how is this beneficial to anyone other than a third party brought in to benefit from a deal they had no part in finding and have no interest in buying? And make no mistake, someone will be paying for it. Most likely a seller , who will have to be offered less (MAO will go down to meet the closing costs). If wholesaler agrees to take it off his cut, then you will have lower paid wholesalers. I have never heard of lower pay being a motivator to work better. Opposite is always true.
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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Alan Asriants:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Yes and this is where the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) comes in as the state’s primary consumer protection agency. They are worried about buyers and sellers not being protected by the law and a brokers' fiduciary duties. I am not saying that I am in favor of this notion, but that's where the rub is

I get it. I just don't like it when state starts to "worry" about adults making conscious decisions in their own lives. It never serves interests of the ordinary people, it always serves the state that collects taxes, increases revenues to create inflated bureaucracy and stifles to death any entrepreneurial spirit. It's an irony that California that spends billions of state/tax dollars to fight homelessness also has the highest number of homeless people on the streets. Anything state touches rots.
There should be criminal laws in place to penalize those who cross the line and do outrageous things. And state may not have resources to prosecute all, but if it prosecutes few and makes headlines it will serve as a warning and deterrent, to let all know that the cost benefit ratio is not to the advantage of the potential criminal. But everything else should be left to adults to work out and for market forces to decide. I am also not against registering wholesalers and running their fingerprints through FBI's database, like they do with gun licensing. This way wronged people can file a report against registered wholesaler and those who deal with wholesalers would be assured that he is not a convicted swindler and career criminal, but someone without criminal records. Anything beyond that is going to have destructive consequences for everyone involved.

Yeah, I am definitely not pro-regulations. I have lived in Europe long enough to know what that looks like. But there is a happy medium. Law is how we function as a society. You need to be able to rely on things, weaker or ealerdly members of society get scammed enough. Like having your deed recorded, nobody worries that anyone will steal your real estate. (Even thought it happened to David Greene last year if I remember the BP podcast correctly.) There is a happy medium and I'd rather see a legal framework. I like what you said about registered wholesalers. And I imagine it would even help when you could say to a homeowner you are making an offer in accordance to State regulations.. My bank told me that their tellers have a piece of paper ready when someone comes in and wants a large amount of cash while on the phone with someone. They usually say its for home improvement. They have this at least once a week and got a paper ready that says: "if you are being pressured by someone on the phone to withdraw a large sum of cash, please nodd." Then they will verbally play along, say they will get the money and show them a second sign that says. Please put your phone here on the counter and follow me to discuss how we can help you. That's where we are as a society....!!

I totally agree. Free society doesn't mean lawless bandit society. I took wills, trusts and estates class in the college and remember that if you sign something under duress or are mentally incapable of consenting to the terms of the agreement you sign, then that agreement or will is null and void in the eyes of the law. May be we should have non-profits or pro-bono attorneys representing mentally challenged and elderly individuals who were unfairly and unlawfully taken advantage of. And state's AG's should concurrently prosecute those cases in criminal courts. We do need law and order, not just in wholesaling but in ALL things we do as individuals in a society.

Either get rid of real estate licenses or get rid of unlicensed wholesaling. One way or the other.
True wholesaling looks like an investor/flipper who has an abundance of deals on the table and sells one of those deals to another investor.

The type of wholesaling I see is a “wholesaler” putting a home under contract under false pretenses. Couldn’t close on the home without an end buyer. Asks the end buyer to pretend they’re a contractor, or “partner.” Every experience I’ve had with a wholesaler has been a negative experience, where they’re clearly criminals masquerading as businessmen. If you’re selling a contract you show me the contract not the property. If you’re showing me the property that you do not yet own, you’re acting as an agent.

Doesn't ANYONE out there (speaking of end buyers) sign a contract on property, in hopes that financing will come trough and pay for it? There is a lot said about wholesalers not coming through on closed deals, but how many times buyers go under contract and fail to buy RE simply because the bank underwriters deny the loan the last minute? Every time I go to check on new houses that builds put up I always get offered a "special deal" with large discount. I am told by a realtor that this and that deal fell through, buyer was under contract with builder, builder built the home and at the last moment underwriters at the bank denied the mortgage. Now I can get builder build what I want from the scratch or buy this ready to move home, with a discount on it.

Do you realize that with the exception of few cash investors with piles of money in bank accounts, almost every other buyer relies on a lender/bank to finance the purchase of real estate? Do you realize that de facto buyers of all financed properties are mortgage companies/banks that finance them and get the Deeds of Trust? What should we do now? Outlaw all home purchases, except for those who have a cash to close? "Buyer, bring a cash to table and close the deal in 30 days or we will put you in jail"? What will that do to real estate industry?

Some people are so unreasonable, it's hard to believe that they believe in what they are advocating for.

The difference is that when a buyer has a contractor for financing it’s stated. And if the seller has an agent they’re being told what the contract says.
What wholesalers do is tell them they are the cash buyer. That is a lie. Technically the contract is invalid. Once when I went around an unscrupulous wholesaler and contacted the seller he was super upset to find out that’s why they were dragging it out. Poor old man was under undo stress waiting to get out of this property and couldn’t understand why the cash buyer had brought half a dozen contractors to look at the property but never closed. Does that sound like a guy who knew what he was signing? I explained what the person was doing to him, but unfortunately the property turned out not to be a good fit for me or I would have purchased it from him directly.

I wouldn’t mind seeing a requirement that the top line of every wholesale contract state in bold letters, “I AM NOT A CASH BUYER. I ONLY HOPE TO FIND SUCH BUYER BEFORE THIS CONTRACT EXPIRES, IF I DO NOT FIND A CASH BUYER I WILL USE ONE IF THE FOLLOWING WEASEL CLAUSES TO ESCAPE THIS CONTRACT.” Followed by those clauses. Then the rest of the standard stuff can follow.

At the end of the day I see no De Facto difference (set the legalize aside) transaction wise between the guy who "buys" house on retail market and takes a mortgage on it to finance his purchase, and a wholesaler who depends on a third party to pay cash for the purchase. Both lack CASH when they come to table. The retail buyer obviously can own the property in the end if he pays off the balance, wholesaler has nothing to do with it once he assigns the contract, but we are talking about transaction, everything that occurs before CLOSING. NEITHER retail buyer nor the wholesaler have the actual CASH to buy the home, as mentioned before. However, BOTH come to seller and say "I will have you paid in full for this property", both sign their contracts and both seek an actual BUYER: an investor, if you are a wholesaler, or a mortgage/bank if you are a retail buyer. Hundreds of retail contracts fail, especially in current market, where underwriters go beyond Dodd Frank and deny loans at the last moment (those are underwriters who work for the same bank that issued initial pre-approval to sign a contract). So, where is your concern for sellers in those cases? Who will make them whole? Once mortgage is denied seller is left high and dry, 30 days and sometimes 6 months into the contract (sometimes even longer, in cases where seller is a builder who built the whole $700K mansion for you, in firm belief that your bank will come through and finance the entire purchase at the end). So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

Did you miss or purposely skip over the parts that didn’t suit your argument? If I buy with a financing contingency it is spelled out in detail in the contract. There is no misleading. I’ve yet to meet a wholesaler who discloses their true intent. By my standard I suppose we can put a bold lettered warning at the top. DEAL DEPENDS ON BANK FINANCING. Though, I think they’re already aware unlike in the wholesaler situation. If you can’t see a difference between lying to secure a contract and not lying but having the already agreed to financer bail…. Wait. You definitely do see the difference you just refuse to admit it.

imagine if this were the other way around. The wholesaler assigning a contract they didn’t secure yet.

Also in a normal deal there’s usually 1% or $1,000 down. Wholesalers give far less from what I’ve seen in practice and in “training.”

First of all there is a new law in the books in state of MD, which takes effect on October 1, 2024, and mandates wholesaler to disclose in the contract that they are wholesalers and will benefit from the assignment of the contract. So, this point is effectively moot. As to your other points, why is it any of your concern how much money wholesaler puts in EMD if seller is happy to get what he is offered? Do you work for CFPB? I will offer $20 to seller in EMD, he can either take it or be stuck with his property. He is free to go find his own buyers and get the most money out of the deal. Who is to say what I have to pay in EMD if sellers agrees to take what I offer?

I have read this forum extensively, ever since I have registered 6 years ago. Here is what my understanding is: almost everyone (not all, though) who persistently badmouths wholesalers doesn't give rats behind about sellers per se, but they are all realtors or brokers. These are people who feel pain in you know where when they see wholesaler walking off with $10K is assigning fee. They feel jealous, angry and motivated to destroy wholesaler, so (as they think) all the assigning fee can sink in their pockets. This is so simple. Knowing people and human nature you find out by the time you reach my age that there is no such a thing as predators caring for sellers. Money is the only factor that moves them and they will lobby the state to pass regulations and laws which will forcefully redistribute share of the pie in their favor. So, there is no moral argument, it's all smoke screen there. Therefore the question I asked earlier remained unanswered.

So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

1 Reply
Nate Marshall
Real Estate Consultant · Evergreen, CO · Member since 2018 · 1k+ posts · 737 votes
2y
Quote from @Will Gaston:

@Alan Asriants there is a ton of nuance to these situations, but I am personally done with wholesalers who require me to tell an owner that I am their "business partner."
Transparency is best for all those acting in good faith.

The wholesaling gurus are amongst the worst. EMD funding gurus are catching up. Hamas gurus are like in 3rd now.
0 Reply
Nate Marshall
Real Estate Consultant · Evergreen, CO · Member since 2018 · 1k+ posts · 737 votes
2y
Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Alan Asriants:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Yes and this is where the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) comes in as the state’s primary consumer protection agency. They are worried about buyers and sellers not being protected by the law and a brokers' fiduciary duties. I am not saying that I am in favor of this notion, but that's where the rub is

I get it. I just don't like it when state starts to "worry" about adults making conscious decisions in their own lives. It never serves interests of the ordinary people, it always serves the state that collects taxes, increases revenues to create inflated bureaucracy and stifles to death any entrepreneurial spirit. It's an irony that California that spends billions of state/tax dollars to fight homelessness also has the highest number of homeless people on the streets. Anything state touches rots.
There should be criminal laws in place to penalize those who cross the line and do outrageous things. And state may not have resources to prosecute all, but if it prosecutes few and makes headlines it will serve as a warning and deterrent, to let all know that the cost benefit ratio is not to the advantage of the potential criminal. But everything else should be left to adults to work out and for market forces to decide. I am also not against registering wholesalers and running their fingerprints through FBI's database, like they do with gun licensing. This way wronged people can file a report against registered wholesaler and those who deal with wholesalers would be assured that he is not a convicted swindler and career criminal, but someone without criminal records. Anything beyond that is going to have destructive consequences for everyone involved.

Yeah, I am definitely not pro-regulations. I have lived in Europe long enough to know what that looks like. But there is a happy medium. Law is how we function as a society. You need to be able to rely on things, weaker or ealerdly members of society get scammed enough. Like having your deed recorded, nobody worries that anyone will steal your real estate. (Even thought it happened to David Greene last year if I remember the BP podcast correctly.) There is a happy medium and I'd rather see a legal framework. I like what you said about registered wholesalers. And I imagine it would even help when you could say to a homeowner you are making an offer in accordance to State regulations.. My bank told me that their tellers have a piece of paper ready when someone comes in and wants a large amount of cash while on the phone with someone. They usually say its for home improvement. They have this at least once a week and got a paper ready that says: "if you are being pressured by someone on the phone to withdraw a large sum of cash, please nodd." Then they will verbally play along, say they will get the money and show them a second sign that says. Please put your phone here on the counter and follow me to discuss how we can help you. That's where we are as a society....!!

I totally agree. Free society doesn't mean lawless bandit society. I took wills, trusts and estates class in the college and remember that if you sign something under duress or are mentally incapable of consenting to the terms of the agreement you sign, then that agreement or will is null and void in the eyes of the law. May be we should have non-profits or pro-bono attorneys representing mentally challenged and elderly individuals who were unfairly and unlawfully taken advantage of. And state's AG's should concurrently prosecute those cases in criminal courts. We do need law and order, not just in wholesaling but in ALL things we do as individuals in a society.

Either get rid of real estate licenses or get rid of unlicensed wholesaling. One way or the other.
True wholesaling looks like an investor/flipper who has an abundance of deals on the table and sells one of those deals to another investor.

The type of wholesaling I see is a “wholesaler” putting a home under contract under false pretenses. Couldn’t close on the home without an end buyer. Asks the end buyer to pretend they’re a contractor, or “partner.” Every experience I’ve had with a wholesaler has been a negative experience, where they’re clearly criminals masquerading as businessmen. If you’re selling a contract you show me the contract not the property. If you’re showing me the property that you do not yet own, you’re acting as an agent.

Doesn't ANYONE out there (speaking of end buyers) sign a contract on property, in hopes that financing will come trough and pay for it? There is a lot said about wholesalers not coming through on closed deals, but how many times buyers go under contract and fail to buy RE simply because the bank underwriters deny the loan the last minute? Every time I go to check on new houses that builds put up I always get offered a "special deal" with large discount. I am told by a realtor that this and that deal fell through, buyer was under contract with builder, builder built the home and at the last moment underwriters at the bank denied the mortgage. Now I can get builder build what I want from the scratch or buy this ready to move home, with a discount on it.

Do you realize that with the exception of few cash investors with piles of money in bank accounts, almost every other buyer relies on a lender/bank to finance the purchase of real estate? Do you realize that de facto buyers of all financed properties are mortgage companies/banks that finance them and get the Deeds of Trust? What should we do now? Outlaw all home purchases, except for those who have a cash to close? "Buyer, bring a cash to table and close the deal in 30 days or we will put you in jail"? What will that do to real estate industry?

Some people are so unreasonable, it's hard to believe that they believe in what they are advocating for.

The difference is that when a buyer has a contractor for financing it’s stated. And if the seller has an agent they’re being told what the contract says.
What wholesalers do is tell them they are the cash buyer. That is a lie. Technically the contract is invalid. Once when I went around an unscrupulous wholesaler and contacted the seller he was super upset to find out that’s why they were dragging it out. Poor old man was under undo stress waiting to get out of this property and couldn’t understand why the cash buyer had brought half a dozen contractors to look at the property but never closed. Does that sound like a guy who knew what he was signing? I explained what the person was doing to him, but unfortunately the property turned out not to be a good fit for me or I would have purchased it from him directly.

I wouldn’t mind seeing a requirement that the top line of every wholesale contract state in bold letters, “I AM NOT A CASH BUYER. I ONLY HOPE TO FIND SUCH BUYER BEFORE THIS CONTRACT EXPIRES, IF I DO NOT FIND A CASH BUYER I WILL USE ONE IF THE FOLLOWING WEASEL CLAUSES TO ESCAPE THIS CONTRACT.” Followed by those clauses. Then the rest of the standard stuff can follow.

At the end of the day I see no De Facto difference (set the legalize aside) transaction wise between the guy who "buys" house on retail market and takes a mortgage on it to finance his purchase, and a wholesaler who depends on a third party to pay cash for the purchase. Both lack CASH when they come to table. The retail buyer obviously can own the property in the end if he pays off the balance, wholesaler has nothing to do with it once he assigns the contract, but we are talking about transaction, everything that occurs before CLOSING. NEITHER retail buyer nor the wholesaler have the actual CASH to buy the home, as mentioned before. However, BOTH come to seller and say "I will have you paid in full for this property", both sign their contracts and both seek an actual BUYER: an investor, if you are a wholesaler, or a mortgage/bank if you are a retail buyer. Hundreds of retail contracts fail, especially in current market, where underwriters go beyond Dodd Frank and deny loans at the last moment (those are underwriters who work for the same bank that issued initial pre-approval to sign a contract). So, where is your concern for sellers in those cases? Who will make them whole? Once mortgage is denied seller is left high and dry, 30 days and sometimes 6 months into the contract (sometimes even longer, in cases where seller is a builder who built the whole $700K mansion for you, in firm belief that your bank will come through and finance the entire purchase at the end). So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

Did you miss or purposely skip over the parts that didn’t suit your argument? If I buy with a financing contingency it is spelled out in detail in the contract. There is no misleading. I’ve yet to meet a wholesaler who discloses their true intent. By my standard I suppose we can put a bold lettered warning at the top. DEAL DEPENDS ON BANK FINANCING. Though, I think they’re already aware unlike in the wholesaler situation. If you can’t see a difference between lying to secure a contract and not lying but having the already agreed to financer bail…. Wait. You definitely do see the difference you just refuse to admit it.

imagine if this were the other way around. The wholesaler assigning a contract they didn’t secure yet.

Also in a normal deal there’s usually 1% or $1,000 down. Wholesalers give far less from what I’ve seen in practice and in “training.”

First of all there is a new law in the books in state of MD, which takes effect on October 1, 2024, and mandates wholesaler to disclose in the contract that they are wholesalers and will benefit from the assignment of the contract. So, this point is effectively moot. As to your other points, why is it any of your concern how much money wholesaler puts in EMD if seller is happy to get what he is offered? Do you work for CFPB? I will offer $20 to seller in EMD, he can either take it or be stuck with his property. He is free to go find his own buyers and get the most money out of the deal. Who is to say what I have to pay in EMD if sellers agrees to take what I offer?

I have read this forum extensively, ever since I have registered 6 years ago. Here is what my understanding is: almost everyone (not all, though) who persistently badmouths wholesalers doesn't give rats behind about sellers per se, but they are all realtors or brokers. These are people who feel pain in you know where when they see wholesaler walking off with $10K is assigning fee. They feel jealous, angry and motivated to destroy wholesaler, so (as they think) all the assigning fee can sink in their pockets. This is so simple. Knowing people and human nature you find out by the time you reach my age that there is no such a thing as predators caring for sellers. Money is the only factor that moves them and they will lobby the state to pass regulations and laws which will forcefully redistribute share of the pie in their favor. So, there is no moral argument, it's all smoke screen there. Therefore the question I asked earlier remained unanswered.

So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

Wholesalers are starting to get defensive. As they should. In 5 years I expect there to be a reciprocal agree
ment like an interstate compact regarding wholesaling.
0 Reply
Nate Marshall
Real Estate Consultant · Evergreen, CO · Member since 2018 · 1k+ posts · 737 votes
2y
Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Alan Asriants:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Yes and this is where the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) comes in as the state’s primary consumer protection agency. They are worried about buyers and sellers not being protected by the law and a brokers' fiduciary duties. I am not saying that I am in favor of this notion, but that's where the rub is

I get it. I just don't like it when state starts to "worry" about adults making conscious decisions in their own lives. It never serves interests of the ordinary people, it always serves the state that collects taxes, increases revenues to create inflated bureaucracy and stifles to death any entrepreneurial spirit. It's an irony that California that spends billions of state/tax dollars to fight homelessness also has the highest number of homeless people on the streets. Anything state touches rots.
There should be criminal laws in place to penalize those who cross the line and do outrageous things. And state may not have resources to prosecute all, but if it prosecutes few and makes headlines it will serve as a warning and deterrent, to let all know that the cost benefit ratio is not to the advantage of the potential criminal. But everything else should be left to adults to work out and for market forces to decide. I am also not against registering wholesalers and running their fingerprints through FBI's database, like they do with gun licensing. This way wronged people can file a report against registered wholesaler and those who deal with wholesalers would be assured that he is not a convicted swindler and career criminal, but someone without criminal records. Anything beyond that is going to have destructive consequences for everyone involved.

Yeah, I am definitely not pro-regulations. I have lived in Europe long enough to know what that looks like. But there is a happy medium. Law is how we function as a society. You need to be able to rely on things, weaker or ealerdly members of society get scammed enough. Like having your deed recorded, nobody worries that anyone will steal your real estate. (Even thought it happened to David Greene last year if I remember the BP podcast correctly.) There is a happy medium and I'd rather see a legal framework. I like what you said about registered wholesalers. And I imagine it would even help when you could say to a homeowner you are making an offer in accordance to State regulations.. My bank told me that their tellers have a piece of paper ready when someone comes in and wants a large amount of cash while on the phone with someone. They usually say its for home improvement. They have this at least once a week and got a paper ready that says: "if you are being pressured by someone on the phone to withdraw a large sum of cash, please nodd." Then they will verbally play along, say they will get the money and show them a second sign that says. Please put your phone here on the counter and follow me to discuss how we can help you. That's where we are as a society....!!

I totally agree. Free society doesn't mean lawless bandit society. I took wills, trusts and estates class in the college and remember that if you sign something under duress or are mentally incapable of consenting to the terms of the agreement you sign, then that agreement or will is null and void in the eyes of the law. May be we should have non-profits or pro-bono attorneys representing mentally challenged and elderly individuals who were unfairly and unlawfully taken advantage of. And state's AG's should concurrently prosecute those cases in criminal courts. We do need law and order, not just in wholesaling but in ALL things we do as individuals in a society.

Either get rid of real estate licenses or get rid of unlicensed wholesaling. One way or the other.
True wholesaling looks like an investor/flipper who has an abundance of deals on the table and sells one of those deals to another investor.

The type of wholesaling I see is a “wholesaler” putting a home under contract under false pretenses. Couldn’t close on the home without an end buyer. Asks the end buyer to pretend they’re a contractor, or “partner.” Every experience I’ve had with a wholesaler has been a negative experience, where they’re clearly criminals masquerading as businessmen. If you’re selling a contract you show me the contract not the property. If you’re showing me the property that you do not yet own, you’re acting as an agent.

Doesn't ANYONE out there (speaking of end buyers) sign a contract on property, in hopes that financing will come trough and pay for it? There is a lot said about wholesalers not coming through on closed deals, but how many times buyers go under contract and fail to buy RE simply because the bank underwriters deny the loan the last minute? Every time I go to check on new houses that builds put up I always get offered a "special deal" with large discount. I am told by a realtor that this and that deal fell through, buyer was under contract with builder, builder built the home and at the last moment underwriters at the bank denied the mortgage. Now I can get builder build what I want from the scratch or buy this ready to move home, with a discount on it.

Do you realize that with the exception of few cash investors with piles of money in bank accounts, almost every other buyer relies on a lender/bank to finance the purchase of real estate? Do you realize that de facto buyers of all financed properties are mortgage companies/banks that finance them and get the Deeds of Trust? What should we do now? Outlaw all home purchases, except for those who have a cash to close? "Buyer, bring a cash to table and close the deal in 30 days or we will put you in jail"? What will that do to real estate industry?

Some people are so unreasonable, it's hard to believe that they believe in what they are advocating for.

The difference is that when a buyer has a contractor for financing it’s stated. And if the seller has an agent they’re being told what the contract says.
What wholesalers do is tell them they are the cash buyer. That is a lie. Technically the contract is invalid. Once when I went around an unscrupulous wholesaler and contacted the seller he was super upset to find out that’s why they were dragging it out. Poor old man was under undo stress waiting to get out of this property and couldn’t understand why the cash buyer had brought half a dozen contractors to look at the property but never closed. Does that sound like a guy who knew what he was signing? I explained what the person was doing to him, but unfortunately the property turned out not to be a good fit for me or I would have purchased it from him directly.

I wouldn’t mind seeing a requirement that the top line of every wholesale contract state in bold letters, “I AM NOT A CASH BUYER. I ONLY HOPE TO FIND SUCH BUYER BEFORE THIS CONTRACT EXPIRES, IF I DO NOT FIND A CASH BUYER I WILL USE ONE IF THE FOLLOWING WEASEL CLAUSES TO ESCAPE THIS CONTRACT.” Followed by those clauses. Then the rest of the standard stuff can follow.

At the end of the day I see no De Facto difference (set the legalize aside) transaction wise between the guy who "buys" house on retail market and takes a mortgage on it to finance his purchase, and a wholesaler who depends on a third party to pay cash for the purchase. Both lack CASH when they come to table. The retail buyer obviously can own the property in the end if he pays off the balance, wholesaler has nothing to do with it once he assigns the contract, but we are talking about transaction, everything that occurs before CLOSING. NEITHER retail buyer nor the wholesaler have the actual CASH to buy the home, as mentioned before. However, BOTH come to seller and say "I will have you paid in full for this property", both sign their contracts and both seek an actual BUYER: an investor, if you are a wholesaler, or a mortgage/bank if you are a retail buyer. Hundreds of retail contracts fail, especially in current market, where underwriters go beyond Dodd Frank and deny loans at the last moment (those are underwriters who work for the same bank that issued initial pre-approval to sign a contract). So, where is your concern for sellers in those cases? Who will make them whole? Once mortgage is denied seller is left high and dry, 30 days and sometimes 6 months into the contract (sometimes even longer, in cases where seller is a builder who built the whole $700K mansion for you, in firm belief that your bank will come through and finance the entire purchase at the end). So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

Did you miss or purposely skip over the parts that didn’t suit your argument? If I buy with a financing contingency it is spelled out in detail in the contract. There is no misleading. I’ve yet to meet a wholesaler who discloses their true intent. By my standard I suppose we can put a bold lettered warning at the top. DEAL DEPENDS ON BANK FINANCING. Though, I think they’re already aware unlike in the wholesaler situation. If you can’t see a difference between lying to secure a contract and not lying but having the already agreed to financer bail…. Wait. You definitely do see the difference you just refuse to admit it.

imagine if this were the other way around. The wholesaler assigning a contract they didn’t secure yet.

Also in a normal deal there’s usually 1% or $1,000 down. Wholesalers give far less from what I’ve seen in practice and in “training.”

First of all there is a new law in the books in state of MD, which takes effect on October 1, 2024, and mandates wholesaler to disclose in the contract that they are wholesalers and will benefit from the assignment of the contract. So, this point is effectively moot. As to your other points, why is it any of your concern how much money wholesaler puts in EMD if seller is happy to get what he is offered? Do you work for CFPB? I will offer $20 to seller in EMD, he can either take it or be stuck with his property. He is free to go find his own buyers and get the most money out of the deal. Who is to say what I have to pay in EMD if sellers agrees to take what I offer?

I have read this forum extensively, ever since I have registered 6 years ago. Here is what my understanding is: almost everyone (not all, though) who persistently badmouths wholesalers doesn't give rats behind about sellers per se, but they are all realtors or brokers. These are people who feel pain in you know where when they see wholesaler walking off with $10K is assigning fee. They feel jealous, angry and motivated to destroy wholesaler, so (as they think) all the assigning fee can sink in their pockets. This is so simple. Knowing people and human nature you find out by the time you reach my age that there is no such a thing as predators caring for sellers. Money is the only factor that moves them and they will lobby the state to pass regulations and laws which will forcefully redistribute share of the pie in their favor. So, there is no moral argument, it's all smoke screen there. Therefore the question I asked earlier remained unanswered.

So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

No one is jealous of a wholesaler. Lighten up Francis!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Lydia R.:

Wholesalers who are able to close on their properties before reselling will have the advantage. I am working with a lender who is offering 100% financing to wholesalers who want to close on their deals and then resell. I think that is what the future of wholesaling will be and a lot of the bad apples will be out of the game. Which I dont think anyone will be terribly upset about.

Yup thats the product I have and have had since 2012.. its just now coming into play !!!!
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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

Dude your so naive planes falling out of the sky lately ( all Southwest ) is clearly pilot Error has nothing to do with Boeing.. media reporting on Aircraft incidences is so poor .. they have no clue what they are talking about.. Like when an Engine quits its Boeing.. but Boeing does not make Engines its Pratt and Whitney and GE and Rolls royce make 90% of Jet Engines !

The Alaska Air flight where the door popped was also a sub contractor issues.

the one that is on Boeing is the MCAS although the flights that crashed were all non US or European carriers .. Pilots could not deal with Runaway Trim.
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Nate Marshall
Real Estate Consultant · Evergreen, CO · Member since 2018 · 1k+ posts · 737 votes
2y
Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

Lighten up Francis. No one is impressed!
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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Jay Hinrichs:

Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

Dude your so naive planes falling out of the sky lately ( all Southwest ) is clearly pilot Error has nothing to do with Boeing.. media reporting on Aircraft incidences is so poor .. they have no clue what they are talking about.. Like when an Engine quits its Boeing.. but Boeing does not make Engines its Pratt and Whitney and GE and Rolls royce make 90% of Jet Engines !

The Alaska Air flight where the door popped was also a sub contractor issues.

the one that is on Boeing is the MCAS although the flights that crashed were all non US or European carriers .. Pilots could not deal with Runaway Trim.

Not sure who is being naive on this.
https://www.youtube.com/watch?v=-RcnCu7WLxc

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Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Alan Asriants:

Quote from @Marcus Auerbach:

Quote from @Account Closed:

Quote from @Marcus Auerbach:

Yes and this is where the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) comes in as the state’s primary consumer protection agency. They are worried about buyers and sellers not being protected by the law and a brokers' fiduciary duties. I am not saying that I am in favor of this notion, but that's where the rub is

I get it. I just don't like it when state starts to "worry" about adults making conscious decisions in their own lives. It never serves interests of the ordinary people, it always serves the state that collects taxes, increases revenues to create inflated bureaucracy and stifles to death any entrepreneurial spirit. It's an irony that California that spends billions of state/tax dollars to fight homelessness also has the highest number of homeless people on the streets. Anything state touches rots.
There should be criminal laws in place to penalize those who cross the line and do outrageous things. And state may not have resources to prosecute all, but if it prosecutes few and makes headlines it will serve as a warning and deterrent, to let all know that the cost benefit ratio is not to the advantage of the potential criminal. But everything else should be left to adults to work out and for market forces to decide. I am also not against registering wholesalers and running their fingerprints through FBI's database, like they do with gun licensing. This way wronged people can file a report against registered wholesaler and those who deal with wholesalers would be assured that he is not a convicted swindler and career criminal, but someone without criminal records. Anything beyond that is going to have destructive consequences for everyone involved.

Yeah, I am definitely not pro-regulations. I have lived in Europe long enough to know what that looks like. But there is a happy medium. Law is how we function as a society. You need to be able to rely on things, weaker or ealerdly members of society get scammed enough. Like having your deed recorded, nobody worries that anyone will steal your real estate. (Even thought it happened to David Greene last year if I remember the BP podcast correctly.) There is a happy medium and I'd rather see a legal framework. I like what you said about registered wholesalers. And I imagine it would even help when you could say to a homeowner you are making an offer in accordance to State regulations.. My bank told me that their tellers have a piece of paper ready when someone comes in and wants a large amount of cash while on the phone with someone. They usually say its for home improvement. They have this at least once a week and got a paper ready that says: "if you are being pressured by someone on the phone to withdraw a large sum of cash, please nodd." Then they will verbally play along, say they will get the money and show them a second sign that says. Please put your phone here on the counter and follow me to discuss how we can help you. That's where we are as a society....!!

I totally agree. Free society doesn't mean lawless bandit society. I took wills, trusts and estates class in the college and remember that if you sign something under duress or are mentally incapable of consenting to the terms of the agreement you sign, then that agreement or will is null and void in the eyes of the law. May be we should have non-profits or pro-bono attorneys representing mentally challenged and elderly individuals who were unfairly and unlawfully taken advantage of. And state's AG's should concurrently prosecute those cases in criminal courts. We do need law and order, not just in wholesaling but in ALL things we do as individuals in a society.

Either get rid of real estate licenses or get rid of unlicensed wholesaling. One way or the other.
True wholesaling looks like an investor/flipper who has an abundance of deals on the table and sells one of those deals to another investor.

The type of wholesaling I see is a “wholesaler” putting a home under contract under false pretenses. Couldn’t close on the home without an end buyer. Asks the end buyer to pretend they’re a contractor, or “partner.” Every experience I’ve had with a wholesaler has been a negative experience, where they’re clearly criminals masquerading as businessmen. If you’re selling a contract you show me the contract not the property. If you’re showing me the property that you do not yet own, you’re acting as an agent.

Doesn't ANYONE out there (speaking of end buyers) sign a contract on property, in hopes that financing will come trough and pay for it? There is a lot said about wholesalers not coming through on closed deals, but how many times buyers go under contract and fail to buy RE simply because the bank underwriters deny the loan the last minute? Every time I go to check on new houses that builds put up I always get offered a "special deal" with large discount. I am told by a realtor that this and that deal fell through, buyer was under contract with builder, builder built the home and at the last moment underwriters at the bank denied the mortgage. Now I can get builder build what I want from the scratch or buy this ready to move home, with a discount on it.

Do you realize that with the exception of few cash investors with piles of money in bank accounts, almost every other buyer relies on a lender/bank to finance the purchase of real estate? Do you realize that de facto buyers of all financed properties are mortgage companies/banks that finance them and get the Deeds of Trust? What should we do now? Outlaw all home purchases, except for those who have a cash to close? "Buyer, bring a cash to table and close the deal in 30 days or we will put you in jail"? What will that do to real estate industry?

Some people are so unreasonable, it's hard to believe that they believe in what they are advocating for.

The difference is that when a buyer has a contractor for financing it’s stated. And if the seller has an agent they’re being told what the contract says.
What wholesalers do is tell them they are the cash buyer. That is a lie. Technically the contract is invalid. Once when I went around an unscrupulous wholesaler and contacted the seller he was super upset to find out that’s why they were dragging it out. Poor old man was under undo stress waiting to get out of this property and couldn’t understand why the cash buyer had brought half a dozen contractors to look at the property but never closed. Does that sound like a guy who knew what he was signing? I explained what the person was doing to him, but unfortunately the property turned out not to be a good fit for me or I would have purchased it from him directly.

I wouldn’t mind seeing a requirement that the top line of every wholesale contract state in bold letters, “I AM NOT A CASH BUYER. I ONLY HOPE TO FIND SUCH BUYER BEFORE THIS CONTRACT EXPIRES, IF I DO NOT FIND A CASH BUYER I WILL USE ONE IF THE FOLLOWING WEASEL CLAUSES TO ESCAPE THIS CONTRACT.” Followed by those clauses. Then the rest of the standard stuff can follow.

At the end of the day I see no De Facto difference (set the legalize aside) transaction wise between the guy who "buys" house on retail market and takes a mortgage on it to finance his purchase, and a wholesaler who depends on a third party to pay cash for the purchase. Both lack CASH when they come to table. The retail buyer obviously can own the property in the end if he pays off the balance, wholesaler has nothing to do with it once he assigns the contract, but we are talking about transaction, everything that occurs before CLOSING. NEITHER retail buyer nor the wholesaler have the actual CASH to buy the home, as mentioned before. However, BOTH come to seller and say "I will have you paid in full for this property", both sign their contracts and both seek an actual BUYER: an investor, if you are a wholesaler, or a mortgage/bank if you are a retail buyer. Hundreds of retail contracts fail, especially in current market, where underwriters go beyond Dodd Frank and deny loans at the last moment (those are underwriters who work for the same bank that issued initial pre-approval to sign a contract). So, where is your concern for sellers in those cases? Who will make them whole? Once mortgage is denied seller is left high and dry, 30 days and sometimes 6 months into the contract (sometimes even longer, in cases where seller is a builder who built the whole $700K mansion for you, in firm belief that your bank will come through and finance the entire purchase at the end). So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

Did you miss or purposely skip over the parts that didn’t suit your argument? If I buy with a financing contingency it is spelled out in detail in the contract. There is no misleading. I’ve yet to meet a wholesaler who discloses their true intent. By my standard I suppose we can put a bold lettered warning at the top. DEAL DEPENDS ON BANK FINANCING. Though, I think they’re already aware unlike in the wholesaler situation. If you can’t see a difference between lying to secure a contract and not lying but having the already agreed to financer bail…. Wait. You definitely do see the difference you just refuse to admit it.

imagine if this were the other way around. The wholesaler assigning a contract they didn’t secure yet.

Also in a normal deal there’s usually 1% or $1,000 down. Wholesalers give far less from what I’ve seen in practice and in “training.”

First of all there is a new law in the books in state of MD, which takes effect on October 1, 2024, and mandates wholesaler to disclose in the contract that they are wholesalers and will benefit from the assignment of the contract. So, this point is effectively moot. As to your other points, why is it any of your concern how much money wholesaler puts in EMD if seller is happy to get what he is offered? Do you work for CFPB? I will offer $20 to seller in EMD, he can either take it or be stuck with his property. He is free to go find his own buyers and get the most money out of the deal. Who is to say what I have to pay in EMD if sellers agrees to take what I offer?

I have read this forum extensively, ever since I have registered 6 years ago. Here is what my understanding is: almost everyone (not all, though) who persistently badmouths wholesalers doesn't give rats behind about sellers per se, but they are all realtors or brokers. These are people who feel pain in you know where when they see wholesaler walking off with $10K is assigning fee. They feel jealous, angry and motivated to destroy wholesaler, so (as they think) all the assigning fee can sink in their pockets. This is so simple. Knowing people and human nature you find out by the time you reach my age that there is no such a thing as predators caring for sellers. Money is the only factor that moves them and they will lobby the state to pass regulations and laws which will forcefully redistribute share of the pie in their favor. So, there is no moral argument, it's all smoke screen there. Therefore the question I asked earlier remained unanswered.

So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.

Okay I’m not a realtor. I am an investor who has dealt with wholesalers, sat through “seminars” by gurus about wholesaling when I started out, and met with many of them at real estate investor meetups.

donyou seriously equate a good faith contract where the bank falls through, with a wholesaler pretending to be a cash buyer when they are not? Okay so Maryland has passed a law to require disclosure. That’s a step in the right direction. I care about the money down, because by definition wholesalers are preying on “distressed sellers.” In my experience that’s normally elderly people. When I first discovered wholesaling I thought it was great. As a business owner I contacted my attorney to review my contracts. He promptly showed me how it’s not legal in the manner that I was being told it was. So in regard to your “double closing.” In many states it’s already illegal to wholesale as it’s done. The newly proposed and enacted laws are simply clarifying that. You consistently ignore the issues that are being presented.

lying to the seller that the wholesaler is a cash buyer.

Lying to the seller that the parade of people through the property are contractors or partners.

having no intent to close if they don’t find a buyer.

marketing the property without a real estate license, and without owning the property. (Again my position is get rid of real estate licenses entirely or stop wholesalers. You can’t eat your cake and have it too.)

I don’t know you, I have no clue how you run your business. The experience I’ve had is this.

“Wholesaler strikes deal at $75,000 but does not have $75,000 and may or may not know what it’s worth to an end buyer. (That’s a whole other issue where wholesaling is pitched as an entry to the market when it shouldn’t be. A good wholesaler would likely have done flips and investments to understand the market well.) Then they market the property for sale at $90,000 doing showings and posting the property online. Often this is done without the seller knowing. Then after all of that if they find a buyer, the seller shows up to the closing Table (if it’s an in person showing,) and finds another party purchasing the property. Or often, no buyer materializes and the wholesaler does one of two things, bails out, or goes back to the seller and makes some excuse as to why they need another length of time. All the while the (often poor elderly mark) stops taking actions to exit the situation they’re in because they think it’s resolved.

I don’t need to work for the consumer protection bureau to think certain consumers need protection.

Now where you’re mentioning double closing, it’s not the point of double closing, it’s that what I call “real wholesaling,” works entirely differently. I.e. wholesaler buys property for cash and closes in the time frame with previously secured financing, (say a line of credit or bank financing on the property that is clearly stated as a contingency that may fall through, so your contracts state contingent on finding an actual cash buyer because that would be a good showing of a more honest wholesaler,) or obviously cash. Then they market a property they own, giving showings on a property they own. Those actions don’t require a license. The activities in the shady wholesaler example are licensed activities.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

Dude your so naive planes falling out of the sky lately ( all Southwest ) is clearly pilot Error has nothing to do with Boeing.. media reporting on Aircraft incidences is so poor .. they have no clue what they are talking about.. Like when an Engine quits its Boeing.. but Boeing does not make Engines its Pratt and Whitney and GE and Rolls royce make 90% of Jet Engines !

The Alaska Air flight where the door popped was also a sub contractor issues.

the one that is on Boeing is the MCAS although the flights that crashed were all non US or European carriers .. Pilots could not deal with Runaway Trim.

Not sure who is being naive on this.
https://www.youtube.com/watch?v=-RcnCu7WLxc

just been a pilot for 30 years and owned multiple aircraft.. Your just another naive person believing media slant.. media knows diddly about aviation and their reporting shows it.
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Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

I’m so glad that I wasn’t taught to operate my business this way. My competitors are dishonest. I’ve had employees who encouraged me to be dishonest and were dismissed. They now work for my competitors. Those competitors are in fact larger than me. That’s okay. I steadily grow. I own up to my mistakes and cover them. Just had an employee make a $14,000 mistake. I covered it even though there was a clear option to cover it up. Never going to happen. Own up. Fix the mistake. Build long term customer relationships because of it. I get phone calls from customers literally in the lobby of the competitors businesses, because they can’t be trusted and they come to me. But go ahead and convince yourself that dishonesty is the only way to get ahead. That business that I started out with a $500 investment, after 2 companies in a row “downsized.” One wasn’t really downsizing. They got rid of 2 “problem employees,” I was one of them because I refused to bend to they lack of ethics. I became a direct competitor. They have meetings about how to deal with me as a competitor now. Lol simply by being ethical. I truly have no other competitive advantage. As a matter of fact, they have every other advantage, except maybe that my slow growth allows me a maintainable overhead compared to theirs.
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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Jay Hinrichs:

Dude your so naive planes falling out of the sky lately ( all Southwest ) is clearly pilot Error has nothing to do with Boeing.. media reporting on Aircraft incidences is so poor .. they have no clue what they are talking about.. Like when an Engine quits its Boeing.. but Boeing does not make Engines its Pratt and Whitney and GE and Rolls royce make 90% of Jet Engines !

The Alaska Air flight where the door popped was also a sub contractor issues.

the one that is on Boeing is the MCAS although the flights that crashed were all non US or European carriers .. Pilots could not deal with Runaway Trim.

Not sure who is being naive on this.
https://www.youtube.com/watch?v=-RcnCu7WLxc

just been a pilot for 30 years and owned multiple aircraft.. Your just another naive person believing media slant.. media knows diddly about aviation and their reporting shows it.

This is getting off-topic, us discussing Boeing's wrongdoings and its planes falling off the skies like dominoes. My point was: if you are against predator behavior, why not start with criminals at the top, such as Boeing? But since you keep mentioning the issue with Boeing, I will note that the Youtube video I posted is not a media article, it consists of clips of the footage of the US Senate hearing, where US Senators asked questions and Boeing CEO "answered" them (I added quotation marks, because he had no answers for most of the questions, including why Boeing sent US Senate papers with gibberish all over them instead of the production documents that they were required to).

I also watched a documentary about Boeing planes falling off the skies and how Boeing tried to pin all of them on pilots. I didn't post it here because I don't want to steer off the topic (which is about wholesaling, whether it's coming to an end). But you can Google and watch it yourself, it's made up of interviews with whistleblowers, experts in aviation industry, some government officials and investigative reporters. It's a long one, not just soundbites to make headlines and sell the newspaper. Boeing has changed it's philosophy long before planes started to fall off the skies. You can even find articles written about it by people who presented thorough analytics of what took place in Boeing management before the catastrophic events brought media attention to its' shortcomings. They have essentially took leverages of control in production of planes away from engineers and given them to managers, who were given enough power to overrule engineers on all the matters related to designing, testing and production of the planes. If Boeing had to design a plane in X years and start production in Y months engineers' objections over safety concerns and quality issues no longer mattered. It was managers who were in power to force everyone to do their bidding, and we all saw how it ended. Anyway, this is all very well known, it may not be clear from soundbites if you get all your information mass media news channels on TV, but a little Googling and digging will reveal all the information you seek on this matter.

I just find it predictable that you would defend Boeing CEO (CEO of the company that caused deaths of hundreds of Americans lately), while at the same time vehemently opposing to wholesaling practices where no one dies, and if crimes are committed the harm can be reversed in court of law if properly prosecuted by AG's and pro-bono attorneys (contracts signed under duress or by seller lacking in basic mental capacities can be nullified in court of law and seller can me made whole, unlike people who died in plane crashes).

0 Reply
Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Shane H.:

You should be concrete with your allegations. "They" or "them being dishonest", them "lying, cheating, doing this and that" doesn't tell me anything at all. What exactly happened, who did what, and should I as a wholesaler be responsible for wrongdoings of other wholesalers?

In this business, unlike many other, things are simpler because it's about NUMBERS. NUMBERS matter in this game, not preaching ethics and producing smoke-screens to hide the true agenda.

And NUMBERS don't lie. Pick ANY off market property on the map. Look at comps in MLS, to see how much buyers paid in real world for similarly sized property in the past 6 month. There you will have your ARV. Next, deduct whatever % you think investor will want to make to be interested in acquiring this property. Let's say it's 30%. Then do estimate of the repairs. Hire a contractor if needed, to get exact cost estimates. Deduct that figure from ARV as well. Finally, deduct whatever you think you can squeeze in as your fee for finding this property. Let's say it's $10K (an average assignment fee). The final number will be your MAO, the maximum amount you can afford to offer seller to profit from the deal which will then be attractive enough for an investor to buy. Armed with that information you can now make an offer to seller. Some suggest to start with 85% of MAO and go as high as 100% of MAO before you stop negotiations and tell seller to kick the dust or find a buyer on his own. It's all simple as that. I don't understand what all the "lying", "cheating" and nefarious doings are about. It seems likely that there are some stupid wholesalers who can't do a simple math, wont look up comps in MLS (all it takes a phone call to your RE agent), have no clue about the value of the property and then they try to peddle it to an investor for a retail price. Obviously, those guys will fail, but not because they are liars and cheaters, it's simply because they are inept and don't know what they are doing.
0 Reply
Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling.

Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

I’m so glad that I wasn’t taught to operate my business this way. My competitors are dishonest. I’ve had employees who encouraged me to be dishonest and were dismissed. They now work for my competitors. Those competitors are in fact larger than me. That’s okay. I steadily grow. I own up to my mistakes and cover them. Just had an employee make a $14,000 mistake. I covered it even though there was a clear option to cover it up. Never going to happen. Own up. Fix the mistake. Build long term customer relationships because of it. I get phone calls from customers literally in the lobby of the competitors businesses, because they can’t be trusted and they come to me. But go ahead and convince yourself that dishonesty is the only way to get ahead. That business that I started out with a $500 investment, after 2 companies in a row “downsized.” One wasn’t really downsizing. They got rid of 2 “problem employees,” I was one of them because I refused to bend to they lack of ethics. I became a direct competitor. They have meetings about how to deal with me as a competitor now. Lol simply by being ethical. I truly have no other competitive advantage. As a matter of fact, they have every other advantage, except maybe that my slow growth allows me a maintainable overhead compared to theirs.

You should be concrete with your allegations. "They" or "them being dishonest", them "lying, cheating, doing this and that" doesn't tell me anything at all. What exactly happened, who did what, and should I as a wholesaler be responsible for wrongdoings of other wholesalers?
In this business, unlike many other, things are simpler because it's about NUMBERS. NUMBERS matter in this game, not preaching ethics and producing smoke-screens to hide the true agenda.
And NUMBERS don't lie. Pick ANY off market property on the map. Look at comps in MLS, to see how much buyers paid in real world for similarly sized property in the past 6 month. There you will have your ARV. Next, deduct whatever % you think investor will want to make to be interested in acquiring this property. Let's say it's 30%. Then do estimate of the repairs. Hire a contractor if needed, to get exact cost estimates. Finally, deduct whatever you think you can squeeze in as your fee for finding this property. The final number will be your MAO, the maximum amount you can afford to pay seller to profit from the deal which will be attractive enough for an investor to buy. Armed with that information you can now make an offer to seller. Some suggest to start with 85% of MAO and go as high as 100% of MAO before you stop negotiations and tell seller to kick the dust or find a buyer on his own. It's all simple as that. I don't understand what all the "lying", "cheating" and nefarious doings are about. It seems likely that there are some stupid wholesalers who can't do a simple math, wont look up comps in MLS (all it takes a phone call to your RE agent), have no clue about the value of the property and then they try to peddle it to an investor for a retail price. Obviously, those guys will fail, but not because they are liars and cheaters, it's simply because they are inept and don't know what they are doing.
I have multiple examples. I’m not going to name names in a thread.

Telling the seller you are a cash buyer is a lie. (I know you said Maryland banned that. Hopefully people actually do it or are prosecuted for not. More than likely they’ll hide it in the mix that an 86 year old senile old man won’t notice.)

telling the seller that they’re bringing in contractors to run estimates when they’re actually potential buyers.

same with “partners.”

Now that I saw your other thread I see you’re new to it. That puts things in a whole other light. I thought it was my entry too. Then I saw that the individuals locking contracts were the liars. If you’re honest as a (contract flipper) wholesaler, it’s hard to beat what a realtor has to offer.

As I said earlier I literally have gone around wholesalers to the sellers to find out how they mistreated the sellers. The best example was the confused old man, who’s renter wasn’t paying him and he was drowning. The wholesaler told them they’d close cash in 30 days. Locked the contract. 30 days expired and they made an excuse to extend the contract. They had the property listed on every marketplace, Craigslist, etc. when I called I thought it was FSBO. Quickly discerned it was a contract flipper. I asked to see the contract I’m buying. They said they don’t show the contracts, but I can go see the property just tell the guy I’m a contractor. I cut the wholesaler out. Called the seller. That’s how I found out about the renter and what they told him. Unfortunately with all the concerns it wasn’t worth the price they offered to pay, let alone what they wanted for it. I gave him the name and number of a quality realtor and an attorney who would give him a free consultation.
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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Shane H.:
I have multiple examples. I’m not going to name names in a thread.

Telling the seller you are a cash buyer is a lie. (I know you said Maryland banned that. Hopefully people actually do it or are prosecuted for not. More than likely they’ll hide it in the mix that an 86 year old senile old man won’t notice.)

telling the seller that they’re bringing in contractors to run estimates when they’re actually potential buyers.

same with “partners.”

Now that I saw your other thread I see you’re new to it. That puts things in a whole other light. I thought it was my entry too. Then I saw that the individuals locking contracts were the liars. If you’re honest as a (contract flipper) wholesaler, it’s hard to beat what a realtor has to offer.

As I said earlier I literally have gone around wholesalers to the sellers to find out how they mistreated the sellers. The best example was the confused old man, who’s renter wasn’t paying him and he was drowning. The wholesaler told them they’d close cash in 30 days. Locked the contract. 30 days expired and they made an excuse to extend the contract. They had the property listed on every marketplace, Craigslist, etc. when I called I thought it was FSBO. Quickly discerned it was a contract flipper. I asked to see the contract I’m buying. They said they don’t show the contracts, but I can go see the property just tell the guy I’m a contractor. I cut the wholesaler out. Called the seller. That’s how I found out about the renter and what they told him. Unfortunately with all the concerns it wasn’t worth the price they offered to pay, let alone what they wanted for it. I gave him the name and number of a quality realtor and an attorney who would give him a free consultation.

86 years old senile man should hire an attorney to assist him and not sign any papers on his own. There are social service orgs in MD that offer free legal advise to people in such matters if they can't afford to hire an attorney. Also, buying from a senile old man without an attorney can be a costly affair, simply because the contract signed by someone who lacks basic mental abilities is considered null and void in the eyes of law. That property could possibly go back to that man should state become aware and prosecute the case against new owner and everyone involved in the transaction. Heirs or relatives of senile man could bring a legal action of their own, on the grounds that the contract was void and null due to mental disabilities of the seller.

The second example you site also doesn't make much sense to me. First, the wholesaler can't advertise the property on craigslist. You can't sell or market a house as wholesaler, you have to find investors/potential buyers on your own and reach out to them directly, rather than making a public advertisement to get the leads. Latter is illegal. Second, why would wholesaler have to make such enormous efforts and struggle to find a buyer if the deal was a TRUE wholesale deal and not some junk property peddled for retail price? The biggest effort, IMHO, is involved in finding a property at the right price and in the right location. That's what is the most challenging part of the wholesaling, But once you have such property under the contract getting rid of it should not take much effort, unless (as I have repeatedly stated) it's a fake deal. Meaning, it's not a wholesale deal at all but a junk one tries to peddle for the full retail price.
0 Reply
Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Account Closed:

Quote from @Shane H.:
I have multiple examples. I’m not going to name names in a thread.

Telling the seller you are a cash buyer is a lie. (I know you said Maryland banned that. Hopefully people actually do it or are prosecuted for not. More than likely they’ll hide it in the mix that an 86 year old senile old man won’t notice.)

telling the seller that they’re bringing in contractors to run estimates when they’re actually potential buyers.

same with “partners.”

Now that I saw your other thread I see you’re new to it. That puts things in a whole other light. I thought it was my entry too. Then I saw that the individuals locking contracts were the liars. If you’re honest as a (contract flipper) wholesaler, it’s hard to beat what a realtor has to offer.

As I said earlier I literally have gone around wholesalers to the sellers to find out how they mistreated the sellers. The best example was the confused old man, who’s renter wasn’t paying him and he was drowning. The wholesaler told them they’d close cash in 30 days. Locked the contract. 30 days expired and they made an excuse to extend the contract. They had the property listed on every marketplace, Craigslist, etc. when I called I thought it was FSBO. Quickly discerned it was a contract flipper. I asked to see the contract I’m buying. They said they don’t show the contracts, but I can go see the property just tell the guy I’m a contractor. I cut the wholesaler out. Called the seller. That’s how I found out about the renter and what they told him. Unfortunately with all the concerns it wasn’t worth the price they offered to pay, let alone what they wanted for it. I gave him the name and number of a quality realtor and an attorney who would give him a free consultation.

86 years old senile man should hire an attorney to assist him and not sign any papers on his own. There are social service orgs in MD that offer free legal advise to people in such matters if they can't afford to hire an attorney. Also, buying from a senile old man without an attorney can be a costly affair, simply because the contract signed by someone who lacks basic mental abilities is considered null and void in the eyes of law. That property could possibly go back to that man should state become aware and prosecute the case against new owner and everyone involved in the transaction. Heirs or relatives of senile man could bring a legal action of their own, on the grounds that the contract was void and null due to mental disabilities of the seller.

The second example you site also doesn't make much sense to me. First, the wholesaler can't advertise the property on craigslist. You can't sell or market a house as wholesaler, you have to find investors/potential buyers on your own and reach out to them directly, rather than making a public advertisement to get the leads. Latter is illegal. Second, why would wholesaler have to make such enormous efforts and struggle to find a buyer if the deal was a TRUE wholesale deal and not some junk property peddled for retail price? The biggest effort, IMHO, is involved in finding a property at the right price and in the right location. That's what is the most challenging part of the wholesaling, But once you have such property under the contract getting rid of it should not take much effort, unless (as I have repeatedly stated) it's a fake deal. Meaning, it's not a wholesale deal at all but a junk one tries to peddle for the full retail price.

Lol. If you’re not planning to wholesale in the manner everyone is complaining about why are you defensive?

The reason we want some sort of regulation of wholesaling is to prevent those people from doing what they’re doing. If you’re not doing that, then the regulation will have no affect on you.
Simply jump on Craigslist or marketplace you will see dozens of such listings. I’m not sure why it doesn’t make sense to you. It’s literally what is happening and what the rest of us are annoyed by.
They have such a struggle because they have no intention of closing and therefore will take any and every contract they can get. Hence why I think requiring a certain down would put an end to that. They wouldn’t take those contracts if they stood to lose a few grand on each one.
I think the idea that if you do a good job, the deals will fly off the table is a very guru sales pitch kind of idea. ”Some will. Some won’t.” Is likely a more realistic idea. Unless you have an extensive predetermined list of cash buyers and know what those particular buyers are looking for, 30 days goes by real fast. Lol
It appears from the other thread that you haven’t actually wholesaled anything yet… get back to us and let us know how you’re making out while fairly and honesty representing to the sellers that you’re a contract flipper, not illegally advertising the properties online, not showing properties as an agent without a license. I’m not being facetious. If that’s the experience I had with wholesalers up until now I would not have a negative view of them.

0 Reply
Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:
I have multiple examples. I’m not going to name names in a thread.

Telling the seller you are a cash buyer is a lie. (I know you said Maryland banned that. Hopefully people actually do it or are prosecuted for not. More than likely they’ll hide it in the mix that an 86 year old senile old man won’t notice.)

telling the seller that they’re bringing in contractors to run estimates when they’re actually potential buyers.

same with “partners.”

Now that I saw your other thread I see you’re new to it. That puts things in a whole other light. I thought it was my entry too. Then I saw that the individuals locking contracts were the liars. If you’re honest as a (contract flipper) wholesaler, it’s hard to beat what a realtor has to offer.

As I said earlier I literally have gone around wholesalers to the sellers to find out how they mistreated the sellers. The best example was the confused old man, who’s renter wasn’t paying him and he was drowning. The wholesaler told them they’d close cash in 30 days. Locked the contract. 30 days expired and they made an excuse to extend the contract. They had the property listed on every marketplace, Craigslist, etc. when I called I thought it was FSBO. Quickly discerned it was a contract flipper. I asked to see the contract I’m buying. They said they don’t show the contracts, but I can go see the property just tell the guy I’m a contractor. I cut the wholesaler out. Called the seller. That’s how I found out about the renter and what they told him. Unfortunately with all the concerns it wasn’t worth the price they offered to pay, let alone what they wanted for it. I gave him the name and number of a quality realtor and an attorney who would give him a free consultation.

86 years old senile man should hire an attorney to assist him and not sign any papers on his own. There are social service orgs in MD that offer free legal advise to people in such matters if they can't afford to hire an attorney. Also, buying from a senile old man without an attorney can be a costly affair, simply because the contract signed by someone who lacks basic mental abilities is considered null and void in the eyes of law. That property could possibly go back to that man should state become aware and prosecute the case against new owner and everyone involved in the transaction. Heirs or relatives of senile man could bring a legal action of their own, on the grounds that the contract was void and null due to mental disabilities of the seller.

The second example you site also doesn't make much sense to me. First, the wholesaler can't advertise the property on craigslist. You can't sell or market a house as wholesaler, you have to find investors/potential buyers on your own and reach out to them directly, rather than making a public advertisement to get the leads. Latter is illegal. Second, why would wholesaler have to make such enormous efforts and struggle to find a buyer if the deal was a TRUE wholesale deal and not some junk property peddled for retail price? The biggest effort, IMHO, is involved in finding a property at the right price and in the right location. That's what is the most challenging part of the wholesaling, But once you have such property under the contract getting rid of it should not take much effort, unless (as I have repeatedly stated) it's a fake deal. Meaning, it's not a wholesale deal at all but a junk one tries to peddle for the full retail price.

Lol. If you’re not planning to wholesale in the manner everyone is complaining about why are you defensive?

The reason we want some sort of regulation of wholesaling is to prevent those people from doing what they’re doing. If you’re not doing that, then the regulation will have no affect on you.
Simply jump on Craigslist or marketplace you will see dozens of such listings. I’m not sure why it doesn’t make sense to you. It’s literally what is happening and what the rest of us are annoyed by.
They have such a struggle because they have no intention of closing and therefore will take any and every contract they can get. Hence why I think requiring a certain down would put an end to that. They wouldn’t take those contracts if they stood to lose a few grand on each one.
I think the idea that if you do a good job, the deals will fly off the table is a very guru sales pitch kind of idea. ”Some will. Some won’t.” Is likely a more realistic idea. Unless you have an extensive predetermined list of cash buyers and know what those particular buyers are looking for, 30 days goes by real fast. Lol
It appears from the other thread that you haven’t actually wholesaled anything yet… get back to us and let us know how you’re making out while fairly and honesty representing to the sellers that you’re a contract flipper, not illegally advertising the properties online, not showing properties as an agent without a license. I’m not being facetious. If that’s the experience I had with wholesalers up until now I would not have a negative view of them.

I am rightfully defensive, because instead of attacking the issue you complain of you want to outlaw or regulate to death the industry. Senile 86 years old man was screwed you say? Well, there is remedy for that: anything senile person lacking basic mental skills signs is null and void on the eyes of law. It's as good as if someone forged a signature on a contract by alleging that the seller has agreed and signed it. This sort of thing happens all the time, FYI, and is a common issue in Estates, Will and Trusts. A lot of Wills are executed by people who are medically diagnosed to be mentally disabled, therefore there are a lot of cases where either Sate or disputing heirs take culprits to court. No need to outlaw Wills, Trusts or wholesaling as an industry. No need to create a new regulation stifling wholesalers to death when existing laws make it clear that contract is invalid if signed under duress or by mentally disabled person.

The thing about Craiglist doesn't make sense because those "wholesalers" you describe are like the squirrel on the wheel. They can spam all the ad pages and post all day long what they want, but wholesale deal sells itself and has people lined up for it, because there is a profit on it. If there is a struggle to peddle it then it means it's not a wholesale deal. Market is the best judge of whatever those guys do. If they have a property which has zero demand they will simply fail to benefit from it and eventually be forced out of business (unless they have endless time to keep doing what doesn't earn them a penny). And since wholesalers can't market property to public, they can only assign a contract to end buyer they must reach out directly, the laws on the books should simply be enforced. No need to pass hundreds of laws banning the same thing if no one will enforce them. Just enforce the laws that exist and don't allow for public marketing of property that doesn't belong to a wholesaler.

It's not a "good job" that sells the deal, whatever the definition of "good job" is. It's the NUMBERS that sell. Everyone out there knows an investor who wants to buy the property to flip or fix and rent. There are not enough of those properties at wholesale prices, so there is constant demand for the investment opportunities. That's not to say that there are no wholesale deals posted or available somewhere, it's just that the REAL ones don't stay on market for a day. When I was looking for fix and flip properties I recall seeing dozens of ads for properties with inflated ARV's and not desirable from investor's standpoint. On two occasions I found exactly what I wanted. I used to get text messages, alerts and emails all the time, and I reacted on these two almost as soon as they hit me with notification. And these were not ghost ads, you could see the property address, you could go on MD Landrec, search the title, find a deed and etc. But when I called and asked to see the property it was sold before I could get my hands on it. The others could stay on for long periods of time (and were available for purchase for a month or longer).
Good deals sell quickly, people snatch them right away. The ones that you can't ever find a buyer are not wholesale deals. They are probably dilapidated houses in slow selling area with low ARV and high cost of repair that no investor in his right mind will buy. Of course, once in a while bad deals sell too, but they are not true wholesale deals is what I am trying to say.
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Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Account Closed:

Quote from @Shane H.:

Quote from @Account Closed:

Quote from @Shane H.:
I have multiple examples. I’m not going to name names in a thread.

Telling the seller you are a cash buyer is a lie. (I know you said Maryland banned that. Hopefully people actually do it or are prosecuted for not. More than likely they’ll hide it in the mix that an 86 year old senile old man won’t notice.)

telling the seller that they’re bringing in contractors to run estimates when they’re actually potential buyers.

same with “partners.”

Now that I saw your other thread I see you’re new to it. That puts things in a whole other light. I thought it was my entry too. Then I saw that the individuals locking contracts were the liars. If you’re honest as a (contract flipper) wholesaler, it’s hard to beat what a realtor has to offer.

As I said earlier I literally have gone around wholesalers to the sellers to find out how they mistreated the sellers. The best example was the confused old man, who’s renter wasn’t paying him and he was drowning. The wholesaler told them they’d close cash in 30 days. Locked the contract. 30 days expired and they made an excuse to extend the contract. They had the property listed on every marketplace, Craigslist, etc. when I called I thought it was FSBO. Quickly discerned it was a contract flipper. I asked to see the contract I’m buying. They said they don’t show the contracts, but I can go see the property just tell the guy I’m a contractor. I cut the wholesaler out. Called the seller. That’s how I found out about the renter and what they told him. Unfortunately with all the concerns it wasn’t worth the price they offered to pay, let alone what they wanted for it. I gave him the name and number of a quality realtor and an attorney who would give him a free consultation.

86 years old senile man should hire an attorney to assist him and not sign any papers on his own. There are social service orgs in MD that offer free legal advise to people in such matters if they can't afford to hire an attorney. Also, buying from a senile old man without an attorney can be a costly affair, simply because the contract signed by someone who lacks basic mental abilities is considered null and void in the eyes of law. That property could possibly go back to that man should state become aware and prosecute the case against new owner and everyone involved in the transaction. Heirs or relatives of senile man could bring a legal action of their own, on the grounds that the contract was void and null due to mental disabilities of the seller.

The second example you site also doesn't make much sense to me. First, the wholesaler can't advertise the property on craigslist. You can't sell or market a house as wholesaler, you have to find investors/potential buyers on your own and reach out to them directly, rather than making a public advertisement to get the leads. Latter is illegal. Second, why would wholesaler have to make such enormous efforts and struggle to find a buyer if the deal was a TRUE wholesale deal and not some junk property peddled for retail price? The biggest effort, IMHO, is involved in finding a property at the right price and in the right location. That's what is the most challenging part of the wholesaling, But once you have such property under the contract getting rid of it should not take much effort, unless (as I have repeatedly stated) it's a fake deal. Meaning, it's not a wholesale deal at all but a junk one tries to peddle for the full retail price.

Lol. If you’re not planning to wholesale in the manner everyone is complaining about why are you defensive?

The reason we want some sort of regulation of wholesaling is to prevent those people from doing what they’re doing. If you’re not doing that, then the regulation will have no affect on you.
Simply jump on Craigslist or marketplace you will see dozens of such listings. I’m not sure why it doesn’t make sense to you. It’s literally what is happening and what the rest of us are annoyed by.
They have such a struggle because they have no intention of closing and therefore will take any and every contract they can get. Hence why I think requiring a certain down would put an end to that. They wouldn’t take those contracts if they stood to lose a few grand on each one.
I think the idea that if you do a good job, the deals will fly off the table is a very guru sales pitch kind of idea. ”Some will. Some won’t.” Is likely a more realistic idea. Unless you have an extensive predetermined list of cash buyers and know what those particular buyers are looking for, 30 days goes by real fast. Lol
It appears from the other thread that you haven’t actually wholesaled anything yet… get back to us and let us know how you’re making out while fairly and honesty representing to the sellers that you’re a contract flipper, not illegally advertising the properties online, not showing properties as an agent without a license. I’m not being facetious. If that’s the experience I had with wholesalers up until now I would not have a negative view of them.

I am rightfully defensive, because instead of attacking the issue you complain of you want to outlaw or regulate to death the industry. Senile 86 years old man was screwed you say? Well, there is remedy for that: anything senile person lacking basic mental skills signs is null and void on the eyes of law. It's as good as if someone forged a signature on a contract by alleging that the seller has agreed and signed it. This sort of thing happens all the time, FYI, and if common issue in Estates, Will and Trusts. A lot of Wills are executed by people who are medically diagnosed to be mentally disabled, therefore there are a lot of cases where either Sate or disputing heirs take culprits to court. No need to outlaw Wills, Trusts or wholesaling as an industry. N o need to create a new regulation when existing laws make it clear that contract is invalid if signed under duress or by mentally disabled person.
The think about Craiglist doesn't make sense because those "wholesalers" you describe are like the squirrel on the wheel. They can spam all the ad pages and post all day long what they want, but wholesale deal sells itself and has people lined up for it, because there is a profit on it. If there is a struggle to peddle it then it means it's not a wholesale deal. Market is the best judge of whatever those guys do. If they have a property which has zero demand they will simply fail to benefit from it and eventually be forced out of business (unless they have endless time to keep doing what doesn't earn them a penny). And since wholesalers can't market property to public, they can only assign a contract to end buyer they must reach out directly, the laws on the books should simply be enforced. No need to pass hundreds of laws banning the same thing if no one will enforce them. Just enforce the laws that exist and don't allow for public marketing of property that doesn't belong to a wholesaler.
It's not a "good job" that sells the deal, whatever the definition of "good job" is. It's the NUMBERS that sell. Everyone out there knows an investor who wants to buy the property to flip or fix and rent. There are not enough of those properties at wholesale prices, so there is constant demand for the investment opportunities. That's not to say that there are no wholesale deals posted or available somewhere, it's just that the REAL ones don't stay on market for a day. When I was looking for fix and flip properties I recall seeing dozens of ads for properties with inflated ARV's and not desirable from investor's standpoint. On two occasions I found exactly what I wanted. I used to get text messages, alerts and emails all the time, and I reacted on these two almost as soon as they hit me with notification. And these were not ghost ads, you could see the property address, you could go on MD Landrec, search the title, find a deed and etc. But each time when I called and asked to see the property it was sold before I could get my hands on it. The others could stay on for long periods of time (and were available for purchase). Good deals sell quickly, people snatch them right away. The ones that you can't ever find a buyer are not wholesale deals. They are probably dilapidated houses in slow selling area with low ARV and high cost of repair that no investor in his right mind will buy. Of course, once in a while bad deals sell too, but they are not true wholesale deals is what I am trying to say.

The fact of the matter is you’re claiming to be justified in your defensiveness when you’re not actually a wholesaler… yet anyway… lol if you succeed while doing things properly come back and scream it from the roof tops…

While I casually said hiding the fine print from a senile old Man, they don’t have to be in fact senile to pull the wool over their eyes. The guy in my example was not senile. Just an old man not well versed in real estate and it’s scams. No different than the jailed relative scams, or the computer virus scams. They always prey on the elderly.

Don’t be mad at those of us who are sick of the wholesalers. Be mad at the wholesalers who made us sick of them. As I repeatedly say, if they get rid of real estate licensing entirely fine. But having licensed realtors and unlicensed realtors, (because that’s what they are,) is not the way.

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Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.
0 Reply
Shane H.
Member since 2018 · 433 posts · 208 votes
2y
Quote from @Account Closed:

There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.

I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Shane H.:

Quote from @Account Closed:

There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.

I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out.

and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..
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1 Reply
Account Closed
MD · Member since 2018 · 195 posts · 53 votes
2y
Quote from @Shane H.:

Quote from @Account Closed:

There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.

I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out.

Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.
POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.
I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it.
I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed.
Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated.
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