I just ran in to a REALTOR that told me would not work with me because assignments of contract and wholesaling is illegal in North Carolina. I have contacted an attorney that advised assignments and double closings are perfectly legal in North Carolina as long as all parties are aware of it. Any attys, Realtors in North Carolina that can elaborate more on this?
Sounds like what a REA would say. Most that say that don't understand what wholesaling is. They think it is a form of sale of a property, when in fact the property doesn't change hands until someone actually pays for the property.
Plus, anytime they think they are losing a potential commission,...?
It doesn't really matter what is legal or illegal (its totally legal by the way). If it looks like a duck and quacks like a duck as far as the board or realtors is concerned.... its a duck.
So just be ready, once you are big enough to get on their radar (around 50 to 75 deals a year) they will try to come after you for "practicing real estate without a license".
Not saying that's right, or that they should... just telling you what they will do.
A buddy of mine just had to pay $50k to settle with the department of real estate in his state, because they didn't like what he was doing.
What is your take on working with a Realtor to wholesale? Worth the time or should I not use them at all if all I intend to do is assignments or double closings?
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Avoid realtors when wholesaling. I love the realtors I work with, and have some great relationships, but its almost impossible to wholesale from the MLS.
Find other ways of getting leads to wholesale. Work directly with sellers.
How much is an LLC in NC? In MI it's only $50, so we make all offers in an LLC, then just sell the LLC when the offer is accepted.
NOTE to the forum: I'm no attorney offering legal advice...but here's what our RE attorney tells us:
No one needs a license to sell their own property.
When you wholesale a deal, have an equity position in it. I close on them first. Double closings the same day using transitional 'wet' money, as opposed to using the end buyer's 'dry' money to close on the deal.
The 'assignment' is an area the realtors like to focus on but again if you put ernest money down you have positioned yourself with equity. Its just that the paperwork is somewhat cumbersome to the closing attorney. I prefer to cooperate with my attorney.,.and pay him a little more for ease of transactions.
Now if you want to get realtors really worked up talk 'Bird Dogging'. But that's not offering other people's property for sale...only referring a potential deal to a buyer for a referral fee.
Realtors are good for closings and are a great source of market trends...knowing where deals are. I have a monthly 'take a realtor to lunch' program where I buy a lunch for a new realtor I'm hoping to get in good with. It seems to warm them up quite a bit.
Always welcome responses from detractors. :o)
I've done numerous wholesale deals in North Carolina. Guess what, they were all closed by an attorney.
I'm kinda going through the same thing. Just yesterday I had an attorney tell me it's not legal and he doesn't feel comfortable doing anything with my Contracts which are just a purchase and sale agreement and a assignment of Contact. he didn't even know what an assignment was but then in the same breath told me it was illegal and in the state of NC the Contracts are at least ten pages long and then said if I can find an attorney that will do it to give him a call because he would love to learn more about it. That let me know people are afraid of what they don't know or understand. So I'm pushing on until I do find an attorney to close my deals. So don't let anyone tell you, u can't do something because we all know wholesaling is very legal.
I'm looking to get a few wholesaling contracts drawn up. Can anyone recommend an attorney?
Many wholesalers use the 'equitable interest' argument. I was at a training done by the NC Real Estate Commission. They advise that assigning your contract and not taking title makes you a real estate broker and you must be licensed.
From NC General Statutes Section 93 - A real estate broker within the meaning of this Chapter is any person, partnership, corporation, limited liability company, association, or other business entity who for a compensation or valuable consideration or promise thereof lists or offers to list, sells or offers to sell, buys or offers to buy, auctions or offers to auction (specifically not including a mere crier of sales), or negotiates the purchase or sale or exchange of real estate, or who leases or offers to lease, or who sells or offers to sell leases of whatever character, or rents or offers to rent any real estate or the improvement thereon, for others
Some real estate agents and attorneys read the definition and will steer clear of you and your deal...
You should be able to do a double closing (i.e., you buy from the Seller at 11AM, sell to new Buyer at Noon) and avoid this. Some investors use transactional funding to achieve this. Note that there are fees for this funding plus additional legal fees. Many wholesalers will do a double close to hide their profit, as it is not uncommon for Sellers or end buyers to walk at closing to avoid giving a wholesaler a significant profit.
In NC the real estate commission doesn't look for wholesalers - but someone could complain about your activities and complain. This might result in a cease and desist letter from the NCREC. If necessary they will refer your case to the Attorney General. The major issue a few wholesalers face is a lack of ethics that lead to problems.
Yeah! right @Mark Esposito to make it legal you must double close the deal so and take the ownership of the property and pay for the 2 set of closing cost .
There is always a way around it.
Educate your realtor, or find another realtor.
Educate your attorney, or find another attorney.
Educate your title company, or find another title company.
Go to your local investor meetups, network with the heavy hitters, and use there referrals for all of the above.
Updated over 1 year ago
There is always a way around it. Educate your realtor, or find another realtor. Educate your attorney, or find another attorney. Educate your title company, or find another title company. Go to your local investor meetups, network with the heavy hitters, and use their referrals for all of the above.
I know an attorney in North Carolina who can double close. PM me.
@Curtis Waters I know wholesalers don't want to hear this
but Oregon just made selling or trading in equitable interest a event that needs a licensed broker to handle.. if you do this your selling RE without a license and you will get a cease and desist .. they are nice the first time.. but violate it again and your in for some pretty heavy trouble
and I think many states are starting to follow suit because of the abuse that is done by beginners and others that are just slimy operators .. those ruin it for others.
simple way to solve this is to have your transactional funding in place or figure out how to come into title.
I know this post is about 2 years old but there is nothing saying wholesaling in NC is illegal. That is a realtor that has no clue or doesn't want to lose their commission on the C side of the transaction. A lot of states are getting tighter and that's where a good transactoinal lender comes into play. Two years ago when this thread was created this whole thought of tightening up wasn't even a gleam in an eye.
@Jay Hinrichs We are in the Oregon market in case you have any contacts needing TF. We have some great rates and you can PM me for details.
@George Taylor I am good and unless your NMLS registered and state licensed mortgage banker your not in Oregon.. its not legal.. I am a NMLS registered and state licensed mortgage banker.. just FYI I just don't put it on my BP signature because I much prefer being a developer
and one of my main markets I s Charleston SC.. love that place
@Jay Hinrichs Our ability to do transactional funding is in every state except AK, HI, PA, CA, and NV. I would have to check with our managing partner on the exact specifications in Oregon but as far as I know we are still able to do TF there. Charleston is great, I'm going there next week for vacation, I love the charm. I'm sort of new to the BP community so I'm feeling my way around it.
@George Taylor I guess it depends on how you set them up.. if your loaning at all then no your not able to do Oregon
but be that I am blessed I am not in need of capital ..
@Jay Hinrichs I welcome all the knowledge that I can get from those in other markets than my own. I'll reach out to my boss tomorrow to clarify this. I appreciate it..
Illegal to wholesale? ........That's silly.
I'm in Charlotte, if it was illegal there would be no attorney willing to close the transactions.
It's important not to let people stop you with their beliefs on how things work.
Not all realtors are the same, some are aware of The multiple strategies of actual real estate investing.
I say it all the time
find a local paralegal and do your home work
this will save you the bar fees and you will be educated about the law in your state
realtors are mostly cream puff seller-(no offense) especially when it comes to something out side the boilerplate contract
I bought my first piece of property on a napkin at the black bear dinner
make sure you get in with the title company and make it a habit of being a friend with the county court house
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