Hello all. After many hours/weeks of research and communication with members on BP, I decided to go ahead and get my RE license for different reasons that will aid my personal goals in RE investing. I was considering starting out in wholesaling which is why I started research on doing it without a license. Now, whether you operate as a wholesaler with or without a RE license is your business, I'm not here to judge. To each their own. However, in studying for the RE exam, of course I am now being exposed to tons of FL - RE laws, etc and I ran across an interesting piece of information. See below: *****Florida Real Estate License Law requires that an individual who, for another, in Florida , for Compensation* or valuable consideration will need a real estate license if they perform any of the following when dealing with real property: • Appraises • Auctions • Sells • Exchanges • Rents • Negotiates a sale • Advertises or represents as an individual involved in the real estate business, through either oral or written representation • Procures sellers, purchasers, lessors, business enterprises or business opportunities • Closes any transaction which results in or is calculated to result in a sale or exchange and who expects to receive ANY compensation or valuable consideration Real property or real estate means any interest or estate in land, or enterprise or business opportunity, including any assignment, leasehold, sub-leasehold or mineral rights. It does not include a cemetery lot or right of burial in any cemetery; nor does it include the renting of a mobile home lot or recreational vehicle mobile home park or travel park. *Compensation is anything of value, paid, received, or expected to be paid or received or remuneration for services rendered.***** I know many will have different opinions as to what this means, but in my understanding, it seems as though wholesaling without a license is indeed illegal in FL. I understand that many insist, "We are not selling properties, we are selling "equitable interest" in a property to another investor"... Sure, but at the end of the day, you are going into a binding contract with a seller under the "pretense" of an investor/buyer, "knowing" that you are not interested in buying and therefore that constitutes a "Business Opportunity", or "Negotiating of a sale", no? Either way, it does not matter what others do, I am concerned with what I do. But, I would like to hear what others on BP have to say about this as I am new to the entire RE industry. Thanks for sharing your thoughts.

Kurt the reality is the real estate laws read the exact same in 99% of the states.. if you did not need a license to put a buyer and seller together for compensation.. there would be no need at all for a real estate industry and or a real estate commission to regulate it all. this is the doing of Guru's and those that want to circumvent the laws.. and or get rich quick as they have been brainwashed into thinking this is the way to start in the industry if you have no money. However as we know this I much more difficult than it appears.. and in some states they are starting to crack down on this.. unleashing Non educated folks into peoples financial lives is never a good thing.. folks get on here and are encourage to start anywhere with no thought as to the potential harm they can do a seller and or buyer.. its one of the most narssistic attitudes I have ever seen. LOL

@Jacob Pereira Close, but not quite. Most people trying to say wholesaling is legal, the typical assignment route, like to quote the above language "for another", and "you're selling your contract, not the property" don't read the full statute. As you'll see below, this is also covered in FS 475.43 475.43 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. And BTW, "most" wholesalers do Not buy the property if they can't find a buyer because they simply don't have the funds to do so.

I am think a lot of good opinions have been expressed. It would be great to have some examples of legal cases that have been prosecuted so that we can see the laws cited in action. I have learned something from this thread that is going to change how I operate as a wholesaler. I am not convinced that I need to be licensed to wholesale by flipping the contract. I don't need a RE license to enter into a purchase contract as a buyer, and I don't need a RE license to sell my contract to someone else for a fee. Based on what I have learned, I do think that when I am looking for an end buyer, I have to be careful of what I say I am selling and how I market it. I don't want to appear to be marketing a house that I don't own. Frankly, I think that would be a pitfall for a licensed agent as well. If marketing a house of which you are not the legal owner (i.e. not on title) is illegal, then that is true of an "unlicensed broker" or a licensed RE agent that does not have a listing agreement with the owner (unless the sales contract is somehow a substitution for the listing agreement - which I cannot see being true since a listing agreement gives an agent permission to list on behalf of the owner and to act in the owner's best interest but in a wholesale transaction, the agent is acting on his own behalf and in his own best interests). Again, I see a lot of arguments about unethical behavior, untrained/naive newbies, "unconscionable profits", etc. that again is not inherent to wholesaling without an RE license but is just the result of bad practices that can be found in any activity/profession. There is a reason that when the DBPR spoke to that REIA, that they could not define a "reasonable" EMD. That is because all EMDs are "reasonable" if the purchase contract that the seller and buyer signs says they are reasonable. The only time that EMD stops being reasonable is when one party challenges the contract in court and presents sufficient evidence to the judge/jury/arbitrator to convince them otherwise. Same goes for "unconscionable profits": it is only unconscionable when a court of law says so. And when it comes to "informed sellers", I encourage every homeowner I deal with to seek advice from the relevant expert (tax expert, RE lawyer, RE agent, psychic/medium, tea leaves, whomever they feel is working in their best interests) on what is best for them in the transaction. I do not advise a homeowner that I am buying from of FMV. I advise them that I am looking to buy the house for my own investment purposes. I am not accepting liability for a seller making the decision to sell based on what I say the property is worth; I can only say what it is worth to me. But again, I would love to see some examples of cases that have been prosecuted and see how the law was actually applied. I think the 3 points of contention are 1. does the sale contract give "equitable interest" 2. acting on one's own behalf vs as an agent for someone else and 3. how one markets for an end buyer. Please let me know if I have missed something in the list.

@Jay Hinrichs that's funny! I suppose it's just the nature of the site with all of the new people that find the site and ask the same sort of questions that we've all seen, along with the same folks being active and/or having keyword searches set up. I'm beginning to get a complex, though. Probably not all that different than how ambulance chasing attorneys, er personal injury attorneys feel.Remember kids, rarely using the words "all", "none", "always", and "never" is a good idea. So few things in life are that easily categorized.To the topic at hand, I'll speak to my experience in Ohio, which is decidedly unfriendly to wholesalers/wholesaling. The biggest issue that gets people in trouble here is advertising. If your buyer's list is small enough or you know it well enough to only market via voice communication, you can probably operate with impunity in the State. If you send out mass emails or post things on (pick your favorite website) with full property details, you'll get really familiar with the Division of Real Estate and not in a good way.There are ways to advertise without running afoul of the folks in Columbus, some of which have been shared on BP in the past. I won't share the other tips I've learned, as it cost me a ton of time and headaches to figure out and it's one of the only barriers to entry in my chosen line of work. It can be done, though.Generally speaking, I'd counsel everyone to remember the truism "If you lie with dogs, you're bound to get fleas." Operate with integrity and surround yourself with people who do the same, and things will have a tendency to work out in your favor. "The arc of the moral universe is long, but it bends toward justice." Don't try to get one over on anyone. Be a good person. Be the type of businessperson that you'd want to do business with. Don't sit on BiggerPockets lumping ALL of anyone into any categories. Just because you don't agree with their chosen line of work doesn't make you any more right than they are. Say something nice about someone you don't agree with.Happy New Year (again)

Hey, another "All Wholesalers Are Crooks" thread that's trending on BP. It wouldn't be a week on BP without one of these with the same cast of characters taking the same sides over and over.Happy New Year.

Might be missing more of the legal points and ethical point; They don't have a valid sale contract because they entered into the contract without the ability or intent to perform under that contract, they are not dealing in good faith and that contract is voidable. Next, the voidable contract is simply a substitute for a listing agreement, the listing agreement being a contract between the owner and an agent. Substitute listing agreement with bogus sale contract and agent with buyer, there you have the reality of what is done. Agent = Straw Man Sale Contract = Contract to control a transaction or Listing Agreement Buyer = Agency Capacity, no intent to buy but to transact business. When you couple these points to our guruized wholesalers learning from the shady types, they probably don't have any real estate business or even a business background, newbies can't value a property properly, they don't understand the risks of tortuous conduct dealing with owners, frankly, they are taught to mislead, hype, advertise property they don't own and use illegal advertising methods to find owners and sure couldn't define equitable interest and legal interest if they had to, which is why they are a public nuisance! You don't need a license in any state to wholesale legally by taking title and then selling it, it's an educational problem and doesn't fit well with the lazy, entitled, shady simple minded folks that try to get into real estate, and those types will always be with us. :)

From my understanding (I'm not a wholesaler), it's legal due to a technicality. A wholesaler doesn't actually find a buyer or seller, what they do is they find a house and then put it under contract. In other words, they make themselves the buyer. After that, they sell off their contract on the house, not the house itself, to another person. It's shady, but at no point are they finding a buyer for the seller or a seller for the buyer, so the wording you listed is circumvented, depending on how you interpret it. If it makes any difference, every serious wholesaler I've ever met has an RE license, so they're obviously aware of how legally tenuous it is.

I love reading the forums, but the sheer amount of wholesaling related posts is getting absolutely absurd. Maybe BiggerPockets should create an offshoot.. call it "SmallerPockets" - A forum for terrible ideas.

As Jay mentioned, all states are very similar in regard to who is required to hold a license. A real estate license may not be the answer for wholesaling the way guru's teach it, you'll have "Net Listing" issues which is illegal in most states but not all, but in all states the National Association of Realtors places net listings in unethical dealing as the Realtor's responsibility is to obtain the highest and best price for the client/owner. I believe in CA you can dance around this issue with certain disclosures and there may be other states as well. Plain and pretty simple, if any wholesaler does an assignment deal and makes significantly more than a Realtor without improving the property in any way, they are just a crook, stealing equity. You'll hear wholesalers try to justify the bigger bucks, nine ways to the moon, but it's a psychological issue doing so, not business, not fair dealing, not the real estate business. All services have a fair value, from digging a ditch to doing brain surgery, it's not about an opinion with justifications. :)

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RE wholesaling in Florida is highly illegal?

Kurt Charles

Winter Park, FL · Member since 2016 · 40 posts · 26 votes

Hello all. After many hours/weeks of research and communication with members on BP, I decided to go ahead and get my RE license for different reasons that will aid my personal goals in RE investing. I was considering starting out in wholesaling which is why I started research on doing it without a license.

Now, whether you operate as a wholesaler with or without a RE license is your business, I'm not here to judge. To each their own.

However, in studying for the RE exam, of course I am now being exposed to tons of FL - RE laws, etc and I ran across an interesting piece of information. See below:

*****Florida Real Estate License Law requires that an individual who, for another, in Florida , for Compensation* or valuable consideration will need a real estate license if they perform any of the following when dealing with real property:

Appraises
Auctions
Sells
Exchanges
Rents
Negotiates a sale
Advertises or represents as an individual involved in the real estate business, through either oral or written representation
Procures sellers, purchasers, lessors, business enterprises or business opportunities
Closes any transaction which results in or is calculated to result in a sale or exchange and who expects to receive ANY compensation or valuable consideration

Real property or real estate means any interest or estate in land, or enterprise or business opportunity, including any assignment, leasehold, sub-leasehold or mineral rights. It does not include a cemetery lot or right of burial in any cemetery; nor does it include the renting of a mobile home lot or recreational vehicle mobile home park or travel park.

*Compensation is anything of value, paid, received, or expected to be paid or received or remuneration for services rendered.*****

I know many will have different opinions as to what this means, but in my understanding, it seems as though wholesaling without a license is indeed illegal in FL.

I understand that many insist, "We are not selling properties, we are selling "equitable interest" in a property to another investor"... Sure, but at the end of the day, you are going into a binding contract with a seller under the "pretense" of an investor/buyer, "knowing" that you are not interested in buying and therefore that constitutes a "Business Opportunity", or "Negotiating of a sale", no?

Either way, it does not matter what others do, I am concerned with what I do. But, I would like to hear what others on BP have to say about this as I am new to the entire RE industry.

Thanks for sharing your thoughts.

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RE wholesaling in Florida is highly illegal?

RE wholesaling in Florida is highly illegal?

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