Wholesaling in New York

9 Replies

Hi all, Is wholesaling legal in nyc? If so any wholesalers in the metropolitan area. I would like to begin wholesaling. I’ve watched several videos on YouTube and many articles online as well.

@Jesus Ramirez Income from wholesaling is treated as active income, subject to self-employment tax in addition to regular income tax (at ordinary rates).

An LLC is one option but your entity structure should be decided after a full analysis of your situation by your CPA and attorney.

@Jesus Ramirez ,

If by Wholesaling you mean, buying cheap and selling high, then yes it is perfectly legal in NY. If you mean to enter into a contract and not be able to close unless you can assign it, I would recommend you discuss your business plan with a lawyer who is prepared to defend you. 

Jesus,

Don't take any of this as legal advice, it is just friendly advice, but there is nothing wrong with an assignable contract, depending on the nature of the property you are purchasing. If it is a homeowner selling, they may or may not be willing to permit the assignable contract, the low contract deposit, and the many contingencies that usually go along with a wholesale contract (everyone wants out if they can't find a retail purchaser). If you are talking auction properties, or bank-owned or short sale properties, often times there will be additional restrictions on the purchase, such as a 30 day period before you can re-sell, non-assignment, or non-redemption (selling/renting the property back to the original distressed homeowner). The investors that I work with often have multiple "exit strategies" depending on each deal so that they do not end up stuck with a property.

Dave