Best states to wholesale real estate WITHOUT a license?
Real Estate Investor · Portland, OR · Member since 2016 · 39 posts · 5 votes
Best states to wholesale real estate WITHOUT a license?
Most Popular Reply
Real Estate Agent · Boston Ma · Member since 2019 · 31 posts · 31 votes
6yOriginally posted by @Don Konipol:
Real estate brokers (and agents) take listings (sign agency agreements with sellers) and/or act as agents for buyers. Rarer, they can act as intermediaries.
Stay away from giving the appearance of doing what real estate brokers do. Real estate brokers typically don't obtain a purchase contract or option in their name, and sell the contract or option.
This is not to say that doing the above as a business model does not require a real estate license (state requirements, laws and interpretations vary), bu,t that if you don't appear to be doing what real estate broker's do you are much less likely to be sued, accused, or catch the eye of the regulatory authorities. You do not want to make the mistake some wholesalers do by getting the seller to sign an agreement giving you a commission for procuring a buyer.
I respect everyone’s opinion on this matter and have heard some real great points. However, have you ever heard the phrase, “making a anthill into a mountain”? Well, that’s what’s going on here. Nobody really answered your question.
Yes you can wholesale without a license as well as create a business out of it! You can wholesale all day and whether they like it or not, your making money. I am a MA Licensed Broker and can tell you, unless your living in OK, IL or OH, you are good to go Sir. Although I personally would suggest getting your license, the excuse above is rather weak and sounds like you’re afraid of something. But anyway, without digressing too much like everyone has on this thread, I’ll break it down:
As long as you have equitable interest in the property (i.e you have a signed contract aka Purchase and Sales Agreement with negotiated terms and earnest money), and your name is on that contract along with the Sellers, you can market the CONTRACT itself, NOT the property, but the deal you are on the line to buy. As long as you’re not representing FOR ANOTHER for a profit, but instead, conducting business in your benefit, you are breaking NO laws.
-Never say “Hello, I haven property for sale people” now that insinuating you have legal title in the property and therefore are selling it- However, if you don’t have legal interest and you are marketing the PROPERTY itself, then the sound of it sounds illegal however, as a Broker, I would know exactly what you got going on however, would definitely know you lack education in the field and just winging it.
-The correct way is that your have for sale and are marketing the PAPERWORK you have equitable title interest in. Proper way of sounding is “Hello y’all! I have a great deal under contract. I am currently selling a contract for assignment of a great deal”!!!
Get it now- Nothing is illegal about it. Recently states put sanctions on wholesaling but will never 100% band it. It would be equivalent to marshal law if they did away with wholesaling. However, what they will do, is purposely throw barriers in your path to deter the inexperienced and clueless draw them out of the wood work and weed them out. This is your fly by night Wholesaler, who watched a few Youtube Videos, thinks they know it all, but when doing it they realize “Whoa, this is like work, the guy said it would be easy? Ohh well I quit!
Eventually they will banned non-licensed individuals because for the simple fact there are too many things people attempting this Real Estate game and want to fast forward through the learning and other important parameters needed. The ones your Gurus did but will never tell you!
Automate your business, remember you are selling the paper/contract or note OF the property not the Property itself, the Contract paper you are selling just so happens to have a property in its agenda. (See the loop whole). Perfectly legal and always will be legal. It WILL never be banned. It is a arbitrage flipping which was basically recognized in the 1972 in midst of that decade long recession, young couples int the suburbs, to save their own home value from falling victim to a neighbor foreclosure.
16 Replies
- Investor/Consultant · Sacramento, CA · Member since 2011 · 175 posts · 41 votes10y
Any of them. Sure I know I will start another debate where people will spout it legal advice and misleading jargon when I say this but...
You don't need a license to wholesale a property. If you have a signed contract on a property with the intent to buy, you can sell/assign your rights to the contract.
And if anyone wants to argue that (which they shouldn't. there are enough threads on here over the topic sending people every which way already), then simply do a double close with transactional funding.
#solved
maybe just stay away from non-disclosure states when you first start out.
- Real Estate Investor · Portland, OR · Member since 2016 · 39 posts · 5 votes10y
Originally posted by @James Holland:
Any of them. Sure I know I will start another debate where people will spout it legal advice and misleading jargon when I say this but...
You don't need a license to wholesale a property. If you have a signed contract on a property with the intent to buy, you can sell/assign your rights to the contract.
And if anyone wants to argue that (which they shouldn't. there are enough threads on here over the topic sending people every which way already), then simply do a double close with transactional funding.
#solved
Let me re-phrase: what areas are best for not being asked questions? Ohio and Illinois, for instance, are notoriously fussy about doing anything like this without a license?
By non-disclosure states, are you talking about those ones where it's hard to get comps because purchase prices are secret?
- Investor/Consultant · Sacramento, CA · Member since 2011 · 175 posts · 41 votes10y
Originally posted by @Ryan Gillis:
Originally posted by @James Holland:
Any of them. Sure I know I will start another debate where people will spout it legal advice and misleading jargon when I say this but...
You don't need a license to wholesale a property. If you have a signed contract on a property with the intent to buy, you can sell/assign your rights to the contract.
And if anyone wants to argue that (which they shouldn't. there are enough threads on here over the topic sending people every which way already), then simply do a double close with transactional funding.
#solved
Let me re-phrase: what areas are best for not being asked questions? Ohio and Illinois, for instance, are notoriously fussy about doing anything like this without a license?
By non-disclosure states, are you talking about those ones where it's hard to get comps because purchase prices are secret?
yes. that is what I meant by non disclosure.
Well I can't speak for every city or state. But I have done wholesale deals in Sacramento, CA; Las Vegas, NV, Indiana and different parts of Florida without ever a single incident or even anyone questioning it. Hope that helps
- Real Estate Investor · Portland, OR · Member since 2016 · 39 posts · 5 votes10y
Fantastic, thanks! Do you use the same contract everywhere?
- Investor/Consultant · Sacramento, CA · Member since 2011 · 175 posts · 41 votes10y
yep. always
- 10yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Real estate brokers (and agents) take listings (sign agency agreements with sellers) and/or act as agents for buyers. Rarer, they can act as intermediaries.
Stay away from giving the appearance of doing what real estate brokers do. Real estate brokers typically don't obtain a purchase contract or option in their name, and sell the contract or option.
This is not to say that doing the above as a business model does not require a real estate license (state requirements, laws and interpretations vary), bu,t that if you don't appear to be doing what real estate broker's do you are much less likely to be sued, accused, or catch the eye of the regulatory authorities. You do not want to make the mistake some wholesalers do by getting the seller to sign an agreement giving you a commission for procuring a buyer.
- Real Estate Investor · Portland, OR · Member since 2016 · 39 posts · 5 votes10y
Originally posted by @Don Konipol:
Real estate brokers (and agents) take listings (sign agency agreements with sellers) and/or act as agents for buyers. Rarer, they can act as intermediaries.
Stay away from giving the appearance of doing what real estate brokers do. Real estate brokers typically don't obtain a purchase contract or option in their name, and sell the contract or option.
This is not to say that doing the above as a business model does not require a real estate license (state requirements, laws and interpretations vary), bu,t that if you don't appear to be doing what real estate broker's do you are much less likely to be sued, accused, or catch the eye of the regulatory authorities. You do not want to make the mistake some wholesalers do by getting the seller to sign an agreement giving you a commission for procuring a buyer.
I was intending to use this one.
- Scranton, PA · Member since 2016 · 201 posts · 44 votes10y
I haven't had a problem wholesaling in any a state yet, but I do know that many states have actual laws saying you must be a licensed Realtor to do real estate. That's why we call ourselves business brokers, consultants, advisors, or other terms that allow us to show up on a HUD statement or to get paid, without necessarily having engaged in dealing real estate without a license. In some places such as Florida that's a lot harder to do with the deal is going through the MLS, but there are still some ways.
Most of my deals have been Pennsylvania, and frankly no one has ever blink an eye
Give the title age of contract of sale in the assignment document in very few ask any other questions. I'll just follow what they are instructed to do, if you're bored of Realtors gets involved that's an open question I guess depending on your state laws and whose lawyer is better, but the chances of them finding out is really not that high
- Real Estate Agent · Boston Ma · Member since 2019 · 31 posts · 31 votes6y
Originally posted by @Don Konipol:
Real estate brokers (and agents) take listings (sign agency agreements with sellers) and/or act as agents for buyers. Rarer, they can act as intermediaries.
Stay away from giving the appearance of doing what real estate brokers do. Real estate brokers typically don't obtain a purchase contract or option in their name, and sell the contract or option.
This is not to say that doing the above as a business model does not require a real estate license (state requirements, laws and interpretations vary), bu,t that if you don't appear to be doing what real estate broker's do you are much less likely to be sued, accused, or catch the eye of the regulatory authorities. You do not want to make the mistake some wholesalers do by getting the seller to sign an agreement giving you a commission for procuring a buyer.
I respect everyone’s opinion on this matter and have heard some real great points. However, have you ever heard the phrase, “making a anthill into a mountain”? Well, that’s what’s going on here. Nobody really answered your question.
Yes you can wholesale without a license as well as create a business out of it! You can wholesale all day and whether they like it or not, your making money. I am a MA Licensed Broker and can tell you, unless your living in OK, IL or OH, you are good to go Sir. Although I personally would suggest getting your license, the excuse above is rather weak and sounds like you’re afraid of something. But anyway, without digressing too much like everyone has on this thread, I’ll break it down:
As long as you have equitable interest in the property (i.e you have a signed contract aka Purchase and Sales Agreement with negotiated terms and earnest money), and your name is on that contract along with the Sellers, you can market the CONTRACT itself, NOT the property, but the deal you are on the line to buy. As long as you’re not representing FOR ANOTHER for a profit, but instead, conducting business in your benefit, you are breaking NO laws.
-Never say “Hello, I haven property for sale people” now that insinuating you have legal title in the property and therefore are selling it- However, if you don’t have legal interest and you are marketing the PROPERTY itself, then the sound of it sounds illegal however, as a Broker, I would know exactly what you got going on however, would definitely know you lack education in the field and just winging it.
-The correct way is that your have for sale and are marketing the PAPERWORK you have equitable title interest in. Proper way of sounding is “Hello y’all! I have a great deal under contract. I am currently selling a contract for assignment of a great deal”!!!
Get it now- Nothing is illegal about it. Recently states put sanctions on wholesaling but will never 100% band it. It would be equivalent to marshal law if they did away with wholesaling. However, what they will do, is purposely throw barriers in your path to deter the inexperienced and clueless draw them out of the wood work and weed them out. This is your fly by night Wholesaler, who watched a few Youtube Videos, thinks they know it all, but when doing it they realize “Whoa, this is like work, the guy said it would be easy? Ohh well I quit!
Eventually they will banned non-licensed individuals because for the simple fact there are too many things people attempting this Real Estate game and want to fast forward through the learning and other important parameters needed. The ones your Gurus did but will never tell you!
Automate your business, remember you are selling the paper/contract or note OF the property not the Property itself, the Contract paper you are selling just so happens to have a property in its agenda. (See the loop whole). Perfectly legal and always will be legal. It WILL never be banned. It is a arbitrage flipping which was basically recognized in the 1972 in midst of that decade long recession, young couples int the suburbs, to save their own home value from falling victim to a neighbor foreclosure.
- 6yNiccolo FazioPro MemberWholesaler · Dallas, TX · Member since 2020 · 16 posts · 4 votes
@GARY LEONARD JR I sent you this question in a message, however, I feel like your answer may be better shared with this conversation to add value to all of us reading it. First, thank you for your step by step answer you provided. I feel like it was very easy to understand and you provided a lot of clarity to the original question.
My follow up question comes from the bio in your profile. I see you started an REI company to separate your wholesaling business from your Realtor business. I was thinking of doing the same thing for the same reasons I am guessing you did.
My question is that when you are engaging in Wholesaling I am sure your contracts are signed by you DBA your company. Do you disclose you are a Realtor in the contracts you use for Wholesaling? Do you need to? Or, is it not necessary because you're acting as the business and the business isn't licensed?
@Ryan Edwards You could always just do the research yourself on the states you are interested in. There is no master list out there of wholesale friendly states. Laws change all the time, a state that was wholesaler friendly a year ago might not be so friendly next year. I strongly suggest you do your own homework on this one. You will also need to get some good boots on the ground in whatever market you are going to virtually wholesale in. Please be sure and put a well thought out (and researched) plan together so that you can be successful in your wholesaling ventures. I have been in this game a long time and Ive seen a lot of people quit because they had no idea what they were getting themselves into
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes5y
In OR, not legal. If you want a test case, give me your contact and the property and I'll call the REA for you, done it before.
"then simply do a double close with transactional funding."
BS - You're arranging the sale of RE in expectation of a fee/skim without a license. If you really think you can show intention to close, then get ready to show Proof of Funds, some earnest money and a GFE from a lender.
Again, you're so confident, call up the state's REA and ask.
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes5y
Originally posted by @GARY LEONARD JR:
Yes you can wholesale without a license as well as create a business out of it! You can wholesale all day and whether they like it or not, your making money. I am a MA Licensed Broker and can tell you, unless your living in OK, IL or OH, you are good to go Sir.Since he wants to arrange the sale of real estate in expectation of a fee/skim, then maybe you should re-read Exemptions from license requirement – M.G.L. 87 QQ in Mass and pretty sure you need to be a principal or atty or have a RE license.
If he wants to engage in the fantasy of saying he's buying, the tell the REA you have PoF, E/M, are taking title and a GFE from a lender.
- Principals (buyer or seller)
- Negotiating loans secured by real estate
- Property managers while acting under contract with property owner
- A licensed auctioneer
- Dealing with securities or beneficial interests of a trust
- Public officials
- An attorney-in-fact
- An attorney ONLY in the normal performance of their duties
- A receiver, executor, administrator, guardian or conservator
- 0. Selling real estate pursuant to a court order
- 1. A trustee of a trust
- 2. A bank, credit union or insurance company acting as a fiduciary
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