Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes
Hi guys I was thinking about this today and just wanted to ask this question and see what your opinion on the matter is. Many people in and out of real estate frown upon wholesaling. There are so many negative stigma's and opinions towards it. I just want to ask why do you think people view it as wrong, unethical or shady? I personally don't think it is any of those things, because I view it as every other aspect of real estate, problem solving. You are providing value and a solution for others. I know that there are some bad wholesalers just like there are bad people in every profession. I think this kind of trickles down and stems from the negative attitude towards people in real estate in general. As I have transitioned into wholesaling I have come to realize that it isn't all peaches and cream, and is actually very hard. Definitely not as easy as guru's and people on FB, and YouTube make it seem. I see many wholesalers work hard, help others, and provide value to both the seller and the investor, yet they are called "vultures" and seen as the bad guys. What would it take to change this? What is it going to take to change the overall view on real estate investors to a positive one?
@Michael Guzik Don't waste your time trying to change the perceptions of the general public. There are only 3 groups of people who's opinions matter:
1. Sellers. If they're motivated they don't care about anything other than: "Can you solve my problem?" 2. Buyers. If they're motivated they don't care about anything other than: "Can you solve my problem?" 3. Friends and family. Just tell them you flip houses. They'll think you're a rock star.
I don't think your murder analogy doesn't quite work for various reasons. But we can stick with it since it's kind of interesting.
Let's say there is a law that defines "murder." Consider the following:
Does abortion constitute murder? In the United States, the states disagreed on this question until Roe v. Wade gave some clarity when SCOTUS held that a person has a constitutional right to an abortion until the third trimester. Sounded easy enough --- except that it wasn't at all. Setting aside the "politics" behind Roe, lawyers have argued countless numbers of cases on what Roe and its progeny means.
Here's a recent example: in California, a pregnant girlfriend asked her boyfriend to punch her in the stomach until the baby/fetus died. The pregnancy was early enough that the girlfriend could've gotten an abortion. Did these two commit murder? If so, why?
Another real-life example: a person with HIV (or even AIDS) sleeps with someone. No protection is used as the person intentionally failed to disclose (or outright lie) to the partner. A year later, the partner dies from complications associated with AIDS. Did the person commit murder?
A slight variation to the above facts (and another real-life example): same facts as above but this time the person disclosed to the partner about his/her HIV status. If the person later dies, is it murder? Many people I have spoken to about this case intuitively say "no." But if I recall correctly, the person was in fact found guilty of murder (technically attempted murder) and had to go to the state Supreme Court to get exonerated.
One last real-life example: parents have a young child. The parents are religious and do not believe in vaccination. There is an outbreak of a contagious disease in the area that they live in. Despite this, the parents still refuse to vaccinate the child. The child ends up contacting the disease and dies. Did the parents commit murder?
The law against murder has been around since the early days of civilization. In the very earlier days, none of the above examples would have been something that they were pondering about when banning murder. But as time goes on, we have to deal with new practices. And often times it's unclear how the law will rule on it.
Let's leave the grisly topic of murder and get back to your point. I think you are committing a strawman fallacy. Notably, I --- nor anyone else --- is making the argument that acts are only legal if the law says it is. Instead, here's the argument:
In all states including Pennsylvania, there is some kind of law that regulates the "practice of real-estate." In Pennsylvania, we call it RELRA.
Under RELRA, only brokers and salespersons can engage in certain activities. RELRA and related regulations expressly spell out situations where there's an exception to this rule.
The government agency in charge of administering is the State Real Estate Commission. One of its jobs is to offer guidance in situations where the law is unclear. So if it is unclear under RELRA and the regulations about whether a particular activity violates RELRA, the Commission can initially rule on it.
If you disagree with the Commission, you can file an appeal with the Commonwealth Court.
And if you lose at the Commonwealth Court, you can file an appeal to the Pennsylvania Supreme Court and hope that the Court: (1) takes your appeal; and (2) rules in your favor. By the time you get to this point, you would've spent at least five figures --- if not six figures --- in legal fees.
Now wholesalers often appear to engage in activities that seem "suspiciously" similar to what brokers and salespersons do.
As you can see from this discussion, reasonable people can disagree on the legality of the topic.
With the above in mind, are wholesalers engaged in the illegal practice of real estate in Pennsylvania? From what I can tell, you say "no." Other people say "yes".
My point is that both opinions are irrelevant from a legal perspective. Until there is a firm ruling on the issue, we are all just guessing. Now some guesses might be better than other guesses. But it's still a guess.
Note that often times there are many legal issues that we will never have a clear answer on. For example, there are pretty interesting questions in Pennsylvania about how you are supposed to calculate damages when the landlord fails to properly return the security deposit. Last time I checked, the trial courts have come up with at least three different ways to calculate this. Now we could get clarity if a landlord or a tenant would appeal this matter to the appellate courts. The problem is that filing an appeal to the appellate courts is very expensive. So while it's an interesting issue, I doubt we will ever get a clear answer on it.
I suppose my broader point here is that the law is rarely black and white. If it was, lawyers wouldn't make any money. :)
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
@Chris K. We needn't speculate, those regulations are enforced regularly. Probably on a daily basis people are being fined or criminally prosecuted for practicing real estate without a license because they're working on the behalf of others. And less often, but still common, people are investigated and cleared of practicing real estate without a license because they are working on their own behalf.
What you are saying may be true for your area --- I have no idea what the situation is in Ontario or in Canada in general. But jurisdiction matters a lot when it comes to legal matters. And with an issue like wholesaling, you generally can't make blanket statements about its legality.
Just so I'm clear, I'm not making an ethical judgment about wholesaling. There is not necessarily a correlation between the legality of an act and the ethical nature of the act. For example, jaywalking is "illegal" in most jurisdictions. But I doubt any of us think of it as a seriously unethical conduct. Compared that to eating meat. For most kinds of meats, it legal to do in the United States and in Canada. But for some vegetarians and vegan, it is a deeply unethical act that's akin to murdering a human being.
I'm also not lingering on this topic for fun or to embarrass anyone. My main concern to make sure that the BP community doesn't oversimplify a complicated legal issue. Many people --- especially new investors --- are already often confused about the fine details of a particular topic. For instance, I can't count the number of times newer investors ask on BP about some convoluted asset protection scheme. Now it may very well be the case that the scheme itself is legit. But it could also be the case that it's flat-out inappropriate for someone who is just starting off investing and has no meaningful net worth to protect. The fine details matter.
I suppose I'm sensitive to this topic since I've met many newer investors who tried to embark on their journey as wholesalers. Many of them were nice folks trying to dream big. Unfortunately, many of the people I met were also frankly taken advantage of by others. For example, I remember one older gentleman who paid a decent amount of money to go to this no-money-down investing course that ended up being a wholesale lecture. The stuff he learned from that course was so rudimentary and generic that he could've gotten in serious trouble if he tried to wholesale in Pennsylvania based on that lecture.
At the end of the day, I don't care whether people think wholesaling is ethical. But I do have concerns when people make blanket statements about its legality. When it comes to legal issues, the devil is in the details. Speaking in absolutes without strict justification will only add confusion to what is already a complicated topic.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
@Doug P. I agree with what you said about agents, now that I think of it a good portion of the negative stigma comes from them. I have never really thought of it that way, but now that I'm looking through the forum it's all real estate agents saying negative things. I completely understand why they act the way they do, it's out of fear or the scarce mentality. I'v realized a lot of wholesalers, investors and agents alike all operate and think this way and I believe everyone is hurt by it. If everyone just realized that all of us provide value in our own unique ways, and worked together we would be so much better off.
@Tyion Bridgeman I see your point and respect your opinion my friend. Yes there are some wholesalers that are like that, but I would argue that there are far more agents that fit that description. I can't tell you how many agents I have met that are clueless about real estate and investing especially. It astounds me how one can obtain a license and still be so ignorant to the real estate market, it almost devalues the license itself. Literally all three of those things you said describe the majority of agents in my opinion LOL. It goes both ways though because I'm sure many wholesalers fit that criteria as well. I disagree though on the inflating real estate, since wholesalers work off market and provide discounted properties. I'm not sure they inflate the cost of real estate. They do over estimate and promise a higher ARV value, which is the same as an agent saying they can sell your house for X, which usually isn't reasonable and is why so many houses have price changes and lower their asking price. I believe it was on Grant Cardone's second podcast that he said, he could do some research and be in a market for a day and know more than 95% of agents that had been there their whole life. I believe he hit it right on the head. I can see your point brother, but I don't paint a broad stroke over all agents and say they are all dummies, because each of them knows something I don't. I've learned to work with as many people possible because I know that they can always provide me value either now or sometime in the future.
@Chris K. I just read the RELRA and see what you mean. Section 35.202.1 (Exceptions) states:
"An owner of real estate with respect to property owned or leased by the owner. In the case of a corporation or partnership, this exclusion does not extend to more than five of the partnership’s partners or the corporation’s officers, nor to the other employes of the partnership or corporation."
But section 35.201 doesn't define what "owner" means. To make it even more unclear it says: "leased by the owner". Someone who is leasing a property is NOT the owner! And yet according to that wording, they are.
So it's up to each individual investor to inform themselves of this unclear situation and decide whether or not to take a calculated risk.
@Michael Guzik LOL yeah can't we all just get along? Agents are just a nasty unpleasant bunch, and Realtors are 10x worse. It seems the realty business is a slime pit that corrupts everyone who enters it. I had a couple of good friends who became Realtors and within a year I wouldn't trust them to tie my shoe.
@Michael Guzik - i think this conversation is less about wholesaling, specifically, and more about what it means to operate a "good business."
whether it's wholesaling, or virtually any other form of business transaction... it all comes down to:
legal operation
transparency in expectation setting
delivering the value promised in the agreement, up front
these three characteristics are universal in "good business" and can be applied to most other types of transactions, whether it's wholesaling real estate or selling hot dogs on a street corner
@Chris K. I just read the RELRA and see what you mean. Section 35.202.1 (Exceptions) states:
"An owner of real estate with respect to property owned or leased by the owner. In the case of a corporation or partnership, this exclusion does not extend to more than five of the partnership’s partners or the corporation’s officers, nor to the other employes of the partnership or corporation."
But section 35.201 doesn't define what "owner" means. To make it even more unclear it says: "leased by the owner". Someone who is leasing a property is NOT the owner! And yet according to that wording, they are.
So it's up to each individual investor to inform themselves of this unclear situation and decide whether or not to take a calculated risk.
@Michael Guzik LOL yeah can't we all just get along? Agents are just a nasty unpleasant bunch, and Realtors are 10x worse. It seems the realty business is a slime pit that corrupts everyone who enters it. I had a couple of good friends who became Realtors and within a year I wouldn't trust them to tie my shoe.
doug you too funny my wife has been a broker for 30 years and her clients LOVE her.. and so do I she brings home the bacon !!! and sometimes we bring home Canadian bacon as well.. if a realtor in our market is a true slim ball an doing illegal things they will be kicked out of the industry by the state.. every month in our bulletin you see those with revoked licenses.. so to that extent agents are held accountable.. I have been a broker for 40 some years I don't think I am a slim ball LOL.. some people like me .. and my bankers like me
I think this gets pretty hilarious the brokers calling wholesalers slim balls and the wholesalers calling agents idoits and crooks.. too funny really..
@Michael Guzik - i think this conversation is less about wholesaling, specifically, and more about what it means to operate a "good business."
whether it's wholesaling, or virtually any other form of business transaction... it all comes down to:
legal operation
transparency in expectation setting
delivering the value promised in the agreement, up front
these three characteristics are universal in "good business" and can be applied to most other types of transactions, whether it's wholesaling real estate or selling hot dogs on a street corner
or just like all the private individuals in CA that lend money when they really need a license.. you have a license for some reason.. I am NMLS registered as well.. we have those licenses for some reason.. for me it was to legally loan hard money in Oregon.. Lenders come into this state every week and don't realize you need a state license for any 1 to 4 when in WA you DO NOT so this all becomes jurisdictional.. and I did my CA lending with my CA brokers licenses.. back in the Day when I had my shop in Oakland.
Living in Ohio from my understanding wholesaling is illegal because when you are not allowed to market a property without a licence. So if you get a property in contract you cannot market the property because you would then be acting like a real estate agent when you are not one. So you cant post on Facebook, craigslist, website or the mls.
Now I see nothing wrong if a wholesaler gets in a contract with someone that needs to sell their house for cash if you have the cash on hand to buy the property. This would avoid the ethical issue of a potential buyer dropping out of a deal because you can still buy the property. Also no one can come against you saying that you are wholesaling when because you have the cash in your account. So you are a cash investor and you are not misleading the seller, who is the person from a legal stand point that I would be worried about ethics. If they needed the cash and you backed out they could really be hurt by it.
I think an issue may arise if you are getting a short term loan from a lender if you are forced to buy the property and you cannot get them their cash back quickly. At the end of the day this is more like flipping houses but I see nothing wrong with this style of wholesaling or wholeflipping.
@Adam Kendrick There's always a way. In every state and province you can still buy a property and resell it. And in most places you can list a property you have under contract with an agent, so long as the owner gives you the right to list it in the contract.
First of all there are many aspects of realestate investing and trust me all of t hem are not ethical. Believe me. But to all you people saying that you need a license, especially Ryan Mullin, you need to do your research and please don't speak on legal issues of a business if you are not an attorney. Look at this video from a realestate attorney and he will answer the question of if it illegal of not:
Yes I will admit wholesaling is like creating a middle man, but alot of times as a investor I love fro someone to bring me a deal that will profit me, $20,30 or more dollars, I don't care where they came from. Its like having a personal assistant. I don't care about the wholesaler making $10-15 thousand if I am about to make 50 after the flip. You don't need a license for a lot of aspect of realestate investment. Yes along time ago you needed a license but you don't know. People, do your research and people think just because they worked hard and went to school that that is the way to everything. I promise you the same people that are saying you need a license, if you had no money, no or bad credit and you were needing money to support the family and couldn't find a job, you would do what you had to do. Alot of people get started in RE buy wholesaling. WHO CARES WHO DON"T LIKE IT.
Adam Kendrick do your research. You don't own the property so a wholesaler is not marketing the property, you are marketing the contract. PEOPLE: MARKET CONTRACT. PERIOD AND SIMPLE.
IT MAKE ME SICK, ALL YOU PEOPLE SWEAR YOU ARE REALESTATE PROFESSIONALS AND DON'T HAVE A ONCE OF COMMON SENSE. STAY OFF BP IFYOU DON'T KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE MESSING WITH PEOPLES LIVELYHOOD. AND WHOLESALING IS NOT ILLEGAL IN OHIO, BECAUSE I HAVE DONE MANY DEALS IN OHIO.
@Chris K. I just read the RELRA and see what you mean. Section 35.202.1 (Exceptions) states:
"An owner of real estate with respect to property owned or leased by the owner. In the case of a corporation or partnership, this exclusion does not extend to more than five of the partnership’s partners or the corporation’s officers, nor to the other employes of the partnership or corporation."
But section 35.201 doesn't define what "owner" means. To make it even more unclear it says: "leased by the owner". Someone who is leasing a property is NOT the owner! And yet according to that wording, they are.
So it's up to each individual investor to inform themselves of this unclear situation and decide whether or not to take a calculated risk.
@Michael Guzik LOL yeah can't we all just get along? Agents are just a nasty unpleasant bunch, and Realtors are 10x worse. It seems the realty business is a slime pit that corrupts everyone who enters it. I had a couple of good friends who became Realtors and within a year I wouldn't trust them to tie my shoe.
What about stare decisis?
Laws are ambiguously written some times and the legislature doesn't always rectify the situation in a timely manner. The courts in PA could have already defined "owner" somewhere else in the statue and/or in a court case could have put a finer point on the issue. Among other things, lawyers are paid the big bucks to answer legal questions using legal concepts.
People always have the right to make their own decision, but reading a single paragraph, finding one perceived issue, and declaring the law unclear is a suboptimal decision making process.
Doing so without any grounding in legal principles magnifies the issue.
And before you or Michael ask, I am not an RE agent, never have been, and don't plan on become one.
Adam Kendrick do your research. You don't own the property so a wholesaler is not marketing the property, you are marketing the contract. PEOPLE: MARKET CONTRACT. PERIOD AND SIMPLE.
IT MAKE ME SICK, ALL YOU PEOPLE SWEAR YOU ARE REALESTATE PROFESSIONALS AND DON'T HAVE A ONCE OF COMMON SENSE. STAY OFF BP IFYOU DON'T KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE MESSING WITH PEOPLES LIVELYHOOD. AND WHOLESALING IS NOT ILLEGAL IN OHIO, BECAUSE I HAVE DONE MANY DEALS IN OHIO.
So when you wholesale, you advertise the contract? You email/send the contract to the potential buyers? I have never once been sent a contract to view from a wholesaler, it is an address and description of a property.
At the end of the day the unethical part comes from the thought that most wholesalers claim to be cash buyers and never tell the seller they are actually not the buyer. I have been told to lie to sellers about who I am when viewing properties... because the wholesaler is lying to the seller. That is where the ethics come into play. An honest wholesaler who tells the seller what they are doing, I have no issue with that at all, and would even entertain doing it myself if the right scenario came around.
@ Jay Hinrichs - liking that last paragraph, totally agree. As far as I know in NH, it is legal to assign a contract you have on real property, as it is legal to purchase/assign an option on property. Certainly sounds like those folks saying they're selling a house when they only have it under contract is entering murky waters in the eyes of the local Real Estate Commission...... always good to seek the opinion of more than one competent real estate attorney on this stuff (yes, I've had crappy advice from real estate attorneys who 'specialized' in real estate!). New Hampshire is certainly challenging to attempt being a wholesaler, it's hard enough to get deals cheap enough for an investor, let alone so cheap that you can fit in a wholesaler's margin as well. Those being successful (selling multiple contracts in a month) are spending a ton of money on marketing (which works....), or going to a LOT of auctions, seeing as so many get cancelled, or the borrowers owed so much that the bank takes them back at the auction because no-one is willing to pay anywhere close to what was owed. Wholesaling is simple and provides fast cash but it isn't easy.
Today, most states allow wholesaling. Most title companies allow wholesaling as long as there is transparency - the wholesaling fee must be on the HUD -1. In fact, there are many attorneys that do not know what wholesaling is and think that it is illegal. The issue is with real estate brokers who see wholesalers as competition - they want it regulated. Wholesalers play a decisive role in buying and selling their contracts. Real estate brokers cannot handle all of the deals in real estate. For example, tax sales - when a owners home has been sold for taxes, and they have a very limited amount of time left to redeem it, most cases they need a cash buyer. Many brokers cannot handle this situation quickly. Take REITS for example, these are cash buyers, they go directly to banks, hedge funds to buy, HUD, etc they do not go thru a broker in most cases. In terms of ethics, during the housing bust 2007 many real estate brokers /agent were among the top violaters of ethics and many lost their license because of unethical practices. Cash is king, many sellers want a fast sale and are willing to sell at a discount - this suits the wholesaler. There are many large successful wholesalers in the United States and they do an excellent job in doing what they do. Again its the jealous real estate brokers/agents that take issue with it. If I own a house and want to sell it to a friend, relative, or whoever I should be able to sell it without going thru a broker. Many real estate deals are consummated without using a broker or agent.
@Jay Hinrichs - on the options, what are the mechanics of you getting paid as the Optionee - would you
1) Assign the option to your buyer
2) Enter into a P+S with the seller and assign that to your buyer
3) Do a double closing
4) Get an option 'cancellation fee' (on the seller side of the HUD) as your buyer buys from the seller for the price he agreed to buy it for
Just curious, I've done all four.......
I guess that all works I don't do this personally.. although I have a big property that I have an option on in Oregon its 117 acre developerment piece I optioned in 09 for 5.5 million and my annual payment is 120k .. if and when I get that big developer coming in I think we will exit at 30 to 40 million I will either close on our 5.5 then resell or double close is how I would do it..
@Jay Hinrichs - Woah! That's a substantial deal! Hope it comes to fruition!
I had a $10 option on a $6MM marina/approved 47-unit condo development to be built - wanted to assign my option for $250k, but only managed to find someone to lease the marina and no-one to buy the whole kit and kaboodle. Cool experience but not cool with the lack of result...... :)
Any legal business can be run ethically, or unethically. It's the responsibility of the people that make up the business to educate themselves and run it in a legal, responsible, and ethical manner.
Adam Kendrick do your research. You don't own the property so a wholesaler is not marketing the property, you are marketing the contract. PEOPLE: MARKET CONTRACT. PERIOD AND SIMPLE.
IT MAKE ME SICK, ALL YOU PEOPLE SWEAR YOU ARE REALESTATE PROFESSIONALS AND DON'T HAVE A ONCE OF COMMON SENSE. STAY OFF BP IFYOU DON'T KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE MESSING WITH PEOPLES LIVELYHOOD. AND WHOLESALING IS NOT ILLEGAL IN OHIO, BECAUSE I HAVE DONE MANY DEALS IN OHIO.
Everyone has an opinion. But to me, the opinion(s) of the guys/girls in the white robes matter more.
There are . In this 4+ year old topic () I posted about ORC statutory changes, specifically removal of the phrase 'an interest in' from ORC broker exemptions... which resulted from a .
I would encourage you and your legal counsel to ask yourself, 'Why would the Ohio legislature change Ohio law and removed the phrase "...has ‘an interest in’..." from exclusion from the ORC brokering statute?'
I have no dog in this fight... I don't 'wholesale' as a business. I have the capability to close every contract I sign. I'm just posting because some in BP Nation don't realize that some attorneys and regulators in some states (e.g. OH) pay attention and have been known to monitor posts on BP.
Wholesaling is, generally, unethical because... 1) You put a property under contract to purchase, but have no intention of buying and, 2) You are selling something that you dont own. You can twist it and turn it about selling contracts and assignments any way you want, those two facts still remain.
This is a great topic. I have found that most of my local wholesalers have below average professionalism. They come and go all the time. Yes, they are marketing contracts, but in reality, they are marketing properties.
I think wholesaling is rife with unethical behavior, but that doesn't imply that all wholesalers are bad. In theory, wholesaling can be done correctly, ethically and to the benefit of all parties.
Problem #1
To get a property under contract, sometimes you have to make the seller think that you are the end buyer. Not surprising, the seller is not always pleased that they had their contract flipped on them. It's a hard sell to tell the seller the truth about what you are doing.
Problem #2
I get at least 20 wholesale deals a day in my email inbox. The information often ranges from inaccurate to fabricated. Almost without exception, when an "ARV" is advertised, it is completely made up.
Problem #3
Lots of wholesalers inevitably go outside the wholesale box and get fees. For example, they may bring a buyer to another wholesaler's property and call it a "consulting fee." Guess what? That's a brokerage fee and unless they are licensed, it is not legal.
Problem #4
It is not regulated. Real estate licenses are highly regulated. Wholesaling is not. Because it is not regulated, there is a lack of professional standards that wholesalers have to abide by. That's one reason that most wholesalers say that having a real estate license is a detriment. I am up for the regulation of wholesaling activities.
Enough with the negative. I bought a property from a wholesaler about a month ago. When it comes down to it - if it is priced correctly and I get clear title, count me in.
Adam Kendrick do your research. You don't own the property so a wholesaler is not marketing the property, you are marketing the contract. PEOPLE: MARKET CONTRACT. PERIOD AND SIMPLE.
IT MAKE ME SICK, ALL YOU PEOPLE SWEAR YOU ARE REALESTATE PROFESSIONALS AND DON'T HAVE A ONCE OF COMMON SENSE. STAY OFF BP IFYOU DON'T KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE MESSING WITH PEOPLES LIVELYHOOD. AND WHOLESALING IS NOT ILLEGAL IN OHIO, BECAUSE I HAVE DONE MANY DEALS IN OHIO.
Everyone has an opinion. But to me, the opinion(s) of the guys/girls in the white robes matter more.
There are . In this 4+ year old topic () I posted about ORC statutory changes, specifically removal of the phrase 'an interest in' from ORC broker exemptions... which resulted from a .
I would encourage you and your legal counsel to ask yourself, 'Why would the Ohio legislature change Ohio law and removed the phrase "...has ‘an interest in’..." from exclusion from the ORC brokering statute?'
I have no dog in this fight... I don't 'wholesale' as a business. I have the capability to close every contract I sign. I'm just posting because some in BP Nation don't realize that some attorneys and regulators in some states (e.g. OH) pay attention and have been known to monitor posts on BP.
Chris when I had lunch this last week with the investigator from the state of Oregon. she admitted she reads BP posts and was asking me about all these wholesaling threads .. and was unclear that a lot of this is taught by national wholesaling gurus..
she was cute.. I explain how it went and she said .. Well you cant do that.. you can be an investor which means you close and then resell but you cant market what you don't own .. in any form or fashion.. they were also investigating a RE broker who has made a career of listing certain wholesalers deals before the wholesaler close thereby aiding in a double close.. which they think violates the rules.
They also don't buy the equitable interest theory and actually it was in my CE this last year.. I know many of these wholesalers hang their hat on that one.. but when your whole business model is to do direct mail or other marketing to get folks to sign contracts and you basically never close and then you send out direct e mail solicitations just like a realtor showing address bd bath sq ft what work needs to be done ARV basically a valuation to the public or post on BP market place or craigslist.. that to them is a scheme to circumvent the license laws.. not my laws and not my words this was what thy told me.. and she had 3 files she got from title companies and had me walk through them with her and show her on the huds and in the date downs how these transactions happened..
Buy resell be an investor in the true sense once you own sell your own property.. perfectly fine.. put a business plan together to make assignment fees or constantly double close not fine.. according to our state investigator..
