Real Estate license for wholesaling in OKC,OK?

11 Replies

I am from Oklahoma and I was doing some research about wholesaling. Is it true than a real estate license is needed to wholesale in OK? If so any tips about the easiest way to get licensed? -Alex H

Hi Alexander, I have done a lot of research about wholesaling, think of wholesaling as flipping, but instead of flipping a property you are flipping a contract, you don't need a license to flip a house or wholesale but having one, knowing the laws, having full access to the MLS, and having the option to work as an agent will give you more options and will also save you money when doing this type of deals. To get your license you have to go through a 90 hours course, pass a test at the school where you took the class and then take the estate exam.

Hi @Alexander Hanna

You do not need a license to wholesale if you are buying and selling the property for yourself. It is the same as buying and selling the property you live in - you don't need a license to purchase and sell anything for yourself. The only time you need a license is if you are helping someone else buy and/or sell which is brokering; then you need a borker's license.

And @Cesar Egas said that with a wholesale you are flipping a contract, not a property. That is not true. With wholesaling, you actually purchase a property and close on it just like any other purchase. The difference is that you then resell at a small mark-up without doing repairs to the property. What Cesar was discussing, selling the contract, is called assignment - you assign the contract rather than selling the property. Again, you don't need a license if you are buying the property for yourself, only if you are assisting or brokering for another.

Sorry for the confusion @Alexander Hanna and @Karen Rittenhouse but yes I did meant flipping a contract which is in my opinion a more simpler way to describe what wholesaling is or should be, putting it in a simpler way when you want to flip a property you want to follow these steps. 1. you have to look for it you gotta find leads, 2. when you find a lead then you gotta figure out the ARV, 3. you gotta calculate the repairs, 4rd if the maths make sense you purchase the property, 5. you start working on the repairs, 6. you advertise it and sell the property. So now when you are a wholesaler just as a flippers you gotta follow all these steps except step 5. and like @Karen Rittenhouse mention before there are different ways to do these deals you can assign the contract or you can purchase the property to do a quick resell.

These "flipping contract"  way of calling wholesaling I heard it in Podcast #42, I heard many podcast about wholesaling before and I guess people get super confuse about it and I think this might be the easiest way to call it, and ever since I heard it thats how I like to explain it.

@Cesar Egas

As you know, there are many ways to buy and sell real estate. There is a TON of confusion on bigger pockets about wholesaling / retailing / assigning / wholetaling. They are all legitimate ways to buy and sell, and all very different.

As I said before "flipping a contract" is not wholesaling and causes confusion when discussed that way. "Flipping a contract" is assignment. You can assign a contract when you never close on the property, never go on title. Very different from wholesaling where you do close on the property and go on title.

Thanks for the clarification @Karen Rittenhouse , it does get a little confusing like for example when Sharin Vornholt mentioned and think of wholesaler as a transaction coordinator or when Mike Nelson mention that he "flip contracts" or "wholesale contracts" even thou is not really "wholesaling" in theory it kind of works out the same and the intention and end result is the same which is selling a good lead, selling a good deal to an investor.

I just find it fascinating how words can be interpreted different depending of what you are referring to and how can same words can have different meanings or you can even create a new trend and make up a new meaning for a word like for example "Flipping" I'm pretty sure at some point many years ago someone in the the real estate business started calling it "Flip" and now everyone call it that.

by the way I do remember your podcast now, great podcast, I learned a lot from there a lot of good tips.

Swesome discussion thanks for the insight! My takeaway is that when buying or selling a property I intend to live in, I don't need a license. I'm a little confused on the brokering aspect. If I got a property under contract and assigned that contract I would not need a RE license? Is assigning a contract different from a double close? I would be "purchasing" the property then selling it immediately after, either through transactional funding or my second close financing the deal?

This is from a previous post about wholesalers: I just copy/paste it here.

There are good and bad wholesalers in Oklahoma. Most of the high-volume wholesalers are getting a premium for their deals and sometimes they are buying them and "wholetailing" them.

The market will change with the housing bubble and wholesalers will be less valuable as bank own properties "REO's" will be the low hanging fruit, per the investor buyer perspective (just like what happened in 2008). One of the reasons we are teaching our agents to be ready for the change.

Wholesaling in OKC isn't illegal if you use the correct language in your contract "and/or assigns" on the buyer line. I am not a legal advisor and you should seek advice from your attorney...just in case.

OREC Oklahoma Real Estate Commission is looking into the possibilities of making Wholesaling a licensable activity. I won't go into it much here since it'll be 10,000 words long, ha. It's been tabled recently but it is in the future discussions. Agents are going nuts over this!

  • Check out local wholesalers Speeedy House buyers (some of my past students).
  • Best to come to the LOCAL REIA and meet active wholesalers. Millionaire Possibilities is a great place to meet experienced investors.
  • Plenty of Meetups with all levels of experience. Meetup.com

Hope that helps.

Ron

Oh, the other commonly taught is:
It is illegal to sell real estate without a license (in Oklahoma) unless:

  • It is your own property (For sale by owner or your rentals)
  • You are an attorney
  • You have an "equitable interest" in the property (Assignable Clause as a wholesaler)
  • You work for a company that owns the property (think home builders or investment company)

There are always exceptions and other factors so you may want to seek attorney advice (I am not an attorney or legal advice).

Other things to think about: If you are licensed, you'll need permission from your broker to wholesale. You will most likely need to fully disclose that you are an agent/Realtor and your intent to wholesale vs. acting as an agent. 

We vetted this out in full with OREC (Oklahoma Real Estate Commission) to allow wholesaler into our real estate brokerage. There is a proper way to do it and it's all about disclosure and doing it correctly. 

Hope that helps!

Ron

@Ron Harris That was very helpful and informational reading! 

I want to graduate to buy and hold investing but I feel that learn to buy, sell and finance deals through the medium of wholesaling could be a good avenue. I had run into hiccups of education gaps and uncertainty and your post gives so good avenues to explore.

You may have noticed but I have joined the millionare possibilities, okc entrepreneur group and real estate investing group on meetup.com

I also am planning on attending the failing forward presentation. I would love to get to know you and more people in the group! 

Hi Alexander!
I don't remember if I send you the calendly link for us to meetup for coffee? You can pick my brain and I'll share what it looks like to be a RE full time investor. I'll PM you.

Originally posted by @Alexander Hanna :

@Ron Harris That was very helpful and informational reading! 

I want to graduate to buy and hold investing but I feel that learn to buy, sell and finance deals through the medium of wholesaling could be a good avenue. I had run into hiccups of education gaps and uncertainty and your post gives so good avenues to explore.

You may have noticed but I have joined the millionare possibilities, okc entrepreneur group and real estate investing group on meetup.com

I also am planning on attending the failing forward presentation. I would love to get to know you and more people in the group! 

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