Contract

28 Replies

hey everyone,

what wholesaling contract should I use for south florida?

Thanks

Steven

You can use your own sale contract, 1 or 2 pages, the simpler the better. Lengthy contracts with too many fine prints will scare distressed sellers away and intimidate buyers :) 

I have many students in South Florida using a simple 2 page contract. Important is that you put some contingencies in there to allow you to back out if you have to (i.e. cannot find a buyer to wholesale to.)

Good luck! :)

thanks @Laura Alamery  .  Do you know where I might be able to get a template of a simple purchase agreement?

Steven

Hi Steven

There are sample contracts that members of BP have uploaded on the site. If you go to the Resources tab then click Fileplace you'll find some. Hope this helps.

I'm curious about this also. But I'm wondering if, as I've heard/read elsewhere suggested, using a title company or your attorney to provide that for you is a smarter/safer option if you're starting out. Or maybe I'm looking too much into it. Comments?

Originally posted by @Laura Alamery :

You can use your own sale contract, 1 or 2 pages, the simpler the better. Lengthy contracts with too many fine prints will scare distressed sellers away and intimidate buyers :) 

I have many students in South Florida using a simple 2 page contract. Important is that you put some contingencies in there to allow you to back out if you have to (i.e. cannot find a buyer to wholesale to.)

Good luck! :)

 I'd be interested in seeing something like this. I've read so far 'use the 4 page farbar' and 'use the 10 page farbar' and 'use the one before 2013' so your simple 2 page approach sounds appealing. I could see how it would scare a prospective seller. Plus a title company or attorney will be reviewing it anyway no? Would you be willing to share Laura? 

Laura, could you send that same contract for wholesaling a property to me at [removed email]? I would appreciate it so much.  Thanks

Originally posted by @Patty Cox:

Laura, could you send that same contract for wholesaling a property to me at [removed email]? I would appreciate it so much.  Thanks

Patty use the @ "mention" function to call out to her otherwise just putting her name in your post won't necessarily get her attention. ;)

Anyone have samples of GA purchase contracts which are simple enough for the seller yet enforceable in case of disputes?

Using contracts  to broker real estate is illegal in Florida unless you are a licensee you cannot legally advertise or Market properties you do not own this is a violation of Florida law and a third degree felony. I see some of the frauds and scammers are suggesting using BS Clauses to get out of contracts. See 475.43. You cannot market properties you do not own even if you have a contract on them. There are only two ways to legally Wholesale in Florida be licensed or own the property.

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

@Adam Fleming

@Benjamin Cowles

@Patty Cox

As far as contracts, use the simplest contract you can find (I use a 2 page contract.) What are most important are the clauses in the contract, which enable you to wholesale, assign or back out of the deal if you have to.

It is not illegal to wholesale in Florida (I mentor real estate attorneys, who want to also become investors.) It is important though that you do have a contract on the property with the right clauses and disclosures.

Originally posted by @Laura Alamery :

.Important is that you put some contingencies in there to allow you to back out if you have to (i.e. cannot find a buyer to wholesale to.)

Good luck! :)

 This is my second largest pet peeve with wholesalers. This is such bad advice and I can not t lol you how many times I see it. Wholesaling REbisna business and should be treated as such. As a business owner, your reputation and performance is crucial to your success. Backing out of a contract because you can't find a buyer is one of ,anybteasons why manybstates, especially FL, has cracked down on this strategy as it is a deceptive practice against home sellers.

As a wholesaler, when you sign on the dotted line, your intention should be to buy that home. Regardless if you do or don't find a buyer. 

My first pet peeve, in case you are wondering, is the common practice of wholesalers having no clause how to properly and accurately calculate rehab budgets and exit values. 

Perhaps you should read my thread found here https://www.biggerpockets.com/forums/93/topics/583...

The most popular, most voted on thread on BP Nation.

It is NOT illegal to "wholesale" in Florida is correct BUT there are only two ways to do it legally:

1. be licensed
2. own it (be on title)
If those wanting to "learn" this "business" choose to pay frauds and scammers that teach people to use deception, etc I would caution against trusting anyone that promotes dishonesty. Furthermore, using contracts as a means to circumvent licensing law and broker real estate is not legal. Here is the statute:
475.43 Presumptions.—In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or sales associate. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.

So, if your "teacher", "mentor" or whatever else they claim to be is proposing using contracts to broker real estate without being licensed or owning the property, they are teaching ILLEGAL practices at YOUR expense. If you want to play games, you can end up like these guys:

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

That person was advertising properties they did not own even though they did have a contract to purchase.
2. https://www.myfloridalicense.com/sto/unlicensedact...
This person also was using contracts to broker real estate and advertising property they did not own. 475.43 puts an end to that old scammer trick. Now the unlicensed broker frauds have to hide in the shadows. You often find them on CL and BP with ads that give little or no info on who they are, etc and they often will refrain giving out much personal info because they know they are committing a felony. 

These are PUBLIC RECORDS from the State of Florida. Where are the "mentors", "gurus", or other frauds and scammers to explain this? I invite them to chime in, and dare them to call it BS. 

Last but not least, deceiving sellers into signing contracts when you have no ability nor intention to close is FRAUD BY INDUCEMENT. You CAN be sued by a seller. 

So, BE CAREFUL who you trust and even MORE careful about who you choose to pay to "teach" you "wholesaling". 

@Will Barnard -I certainly appreciate you standing up for honesty. Many in this business will not.

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

@John Thedford Thank you greatly for this post what a vast amount of info and sources to verify.  Here's my position, I want to be an investor in anyway possible.  Not necessarily wholesaling but more like fix and flip and rent out.  I could only dream of being a broker or an agent.  Unfortunately I ruined my life while i was playing college football.  I caught a coupe felonies.  And went into a spiral.  Ive hanged my life around quite a bit and now own my first property with two lots. And am excited to get more but i know with my checkered passed the board wont grant me a license so wholesaling is off the table cause I'm not risking it to risky.  Thank you sorry for rant

@Adam Fleming

You don't know what DBPR will say until you ask them. Give them a call and see. Do forget the guru garbage and the FRAUDS AND SCAMMERS that promote BS escape clauses, etc. The one thing they are NOT teaching is the fact that using contracts to broker is not legal. Sure, one can assign a contract but when one starts advertising the property they are NOT selling a contract they are brokering real estate. There seems to be a lot of poorly informed people that believe the assignment clause is there to broker real estate and circumvent state law. They are clueless. The assignment clause has a legitimate use such as having the option to put a property into different entities one might control, taking on a buyer and using a different entity where both parties have an interest, assigning to a family member, etc. It was never intended to be used as a way to broker without a license. The State of Florida, after receiving thousands of complaints, has addressed the situation in 475.43. 

Look up the phone number to DBPR (www.myfloridalicense.com) and explain your hopes of getting licensed. Get an answer from the people that grant licenses rather than an internet forum. The answer may surprise you. 

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

@John Thedford - Thanks for all the info. I'm currently interested in wholesaling in the state of Florida. But the last thing i want to do is break the law. Would you please help clarify a few questions I have?

I am not a licensed realtor or broker.  I want to start a DM campaign for deals in my area. Would it be okay to wholesale a deal that i put under contract to a investor, as long as i do not market it in anyway(ex. craigslist or newspaper)? If the transaction was strictly word to mouth would this then be okay?

My mother is a broker and my fiance is a agent. They are both licensed here in the state of Florida. 

If the above questions would be considered breaking the law in this state, do you have any suggestions with what i should do with my current situation to be able to wholesale?

Also, as a agent or broker aren't you suppose to act as a fiduciary to either of the parties(buyer or seller)? Wouldn't it be a conflict of intrest to make money out of the deal?

Once again, I want to thank you for all the information you have provided. I'm not trying to debate with you. I just have questions that I would like to have answered before i spend any time or money on something that would eventually have my named tarnished or worse, land me in jail. 

Thanks!

(352) 293-6638

the easiest solution is to purchase and then resell no license needed. There is no conflict of interest if you have an educated seller. Nobody has a duty to pay fair market value.

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600
Originally posted by @Ryan McPherson :

@John Thedford If i were to buy the property then resell it, wouldn't this then incur more taxes because i bought the property then resold it so quickly? 

 Flipping or playing the assignment game are basically the same. It is all ordinary income. Buy and hold and you get better tax treatment.

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

A lot of people swear by Rich Dad, Poor Dad.  In the book, he says his partner is his cat.  I don't necessarily agree with this reasoning but it is not my business.  If I get a property under contract, you can be sure I will assign or double close it.  Once I meet the seller, the buyer, and other parties involved, it is hard for me to just be greedy and not care if I disrupt someone's life. 

Try not to just get a property under contract just because you can.  It is pretty unfair and a waste of time.  If you get a contract that a seller agrees to and then assign it, that is perfectly fine.  The seller agreed to a price, and you gave it to them.  But don't just get contracts willy nilly.  It is sleezy.

Originally posted by @Ryan McPherson :

@John Thedford If i were to buy the property then resell it, wouldn't this then incur more taxes because i bought the property then resold it so quickly? 

 If you want long-term sustained income buy-and-hold is the way to go

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

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