Wholesaling in Ohio

8 Replies

I am checking around with different title companies as I have seen here on BP to do so.  I explained what I am wanting to do as far as wholesaling.  I explained how I planned on assigning the contact to a buyer.  The lady said she would have to check with her boss.  Well she called me and said that was illegal.  She said I would have to buy the property first and then do another close and sell it to a buyer.  She said that was call Good Fund Law in Ohio.  I am not sure that is correct.  Any suggestions??

@Rusty Glines  I dont know the answer to Ohio wholesaling and the problem is I am not sure many do. Search the forums you will find some topics. I remembered this recent post. I have to imagine that buying the property and closing a few days later would always be legal. No legal advice. I also believe the good fund law is targeted to make sure that you cant do a dry closing anymore. May want to talk to another title company. @Darrin Carey  may also chime in. 

http://www.biggerpockets.com/forums/93/topics/9578...

Originally posted by @Rusty Glines :

I am checking around with different title companies as I have seen here on BP to do so.  I explained what I am wanting to do as far as wholesaling.  I explained how I planned on assigning the contact to a buyer.  The lady said she would have to check with her boss.  Well she called me and said that was illegal.  She said I would have to buy the property first and then do another close and sell it to a buyer.  She said that was call Good Fund Law in Ohio.  I am not sure that is correct.  Any suggestions??

 First find a new title agency familiar with Ohio laws.

The "law" she is referring to is ORC 1349.21 and she should specifically review section 4 of that code.

I will check around with different agencies too.  Thanks for the reply.  I still have to do some more research on this too.

@Rusty Glines  

She has confused two different issues. Assigning a contract is legal, however there are a lot of caveats surrounding that strategy. Also, some Title insurance underwriters have issues that the local title company will have to follow.      

She is right that good funds law saying the first closing has to be paid without funds from a second closing if you do a double close. 

Around here, some title companies will close with an assignment involved, and some will not.

Great.  I appreciate the replies.  I was getting worried there for a minute.  

Also at some level of enforcement or politics there are those in Ohio that believe the practice is or should be illegal.  I don't know exactly the details but there have been threads here about it. 

@NedCarey. I have talked to other realtors and they are not sure how it is supposed to work as well. They didn't know what REIA was either. I know they are local and have not been introduced to that. But, I was really surprised to hear that. Because that is one of the first things I read on here was to connect with the local REIA. Anywho, thanks for the reply.

Real estate agents are typically clueless to anything real estate investing related. They have no clue what makes a good deal or how to evaluate a deal.  This is because for most agents their business is selling nice houses to homeowners. 

The REI business is very different than the homeowner sales business and it is not something they get trained in. That is unless they go outside the agent world and research for themselves the REI world. You see agents here on BP that do understand the REI business. These are the kind of agents to deal with.

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