More importantly, you may want to consider a Real Estate license unless you plan on purchasing these homes yourself, and then flipping them to investors.
The Department of RE is starting to really crack down on wholesalers that aren't licensed. Here is AZ, 2 of my favorite wholesalers just received C&D letters from the Dept of RE to quit all activity, or face prosecution. Not good because both wholesalers were holding a book of business when they received the letter. This will likely cost them dearly.
More importantly, you may want to consider a Real Estate license unless you plan on purchasing these homes yourself, and then flipping them to investors.
The Department of RE is starting to really crack down on wholesalers that aren't licensed. Here is AZ, 2 of my favorite wholesalers just received C&D letters from the Dept of RE to quit all activity, or face prosecution. Not good because both wholesalers were holding a book of business when they received the letter. This will likely cost them dearly.
I also want to know if i need business license for sending Bandit signs elsewhere having business name on it? Because i wanted to create business name and put it in my business card so they will easily contact me but im not sure if it will violate the law for not having business license?
You will need to check with your city to verify whether or not a business license is required. If you have a RE license, it would solve both problems as you can run your deals through your RE license.
@Jacob Anthony D. Estayo No you don't need a business license to wholesale real estate here in Las Vegas. I have been doing it out here for years. There is no law against being a wholesaler in this city. You are simply informing a seller that you have a buyer for them and being paid a referral fee for bringing the 2 together.
@Cara Lonsdale you may want to ask more questions about your wholesaler friends. If the division came down on them it's because they were doing something fraudulent or not being completely open about there business. I know a few guys out there killing the game and have a hug amount of business going on and they never get looked at. Just my opinion.
@Jacob Anthony D. Estayo No you don't need a business license to wholesale real estate here in Las Vegas. I have been doing it out here for years. There is no law against being a wholesaler in this city. You are simply informing a seller that you have a buyer for them and being paid a referral fee for bringing the 2 together.
@Cara Lonsdale you may want to ask more questions about your wholesaler friends. If the division came down on them it's because they were doing something fraudulent or not being completely open about there business. I know a few guys out there killing the game and have a hug amount of business going on and they never get looked at. Just my opinion.
Louis, Just because they CAN do it, doesn't make it legal. It just means they have flown under the radar without being caught. In most, if not all states, people who engage in real estate activities without a license are subject to legal action. The only way to practice real estate without a license is if you are acting in a FSBO capacity. This is why I asked that in my original comments. Someone who buys the properties themselves, and then sells the properties themselves would be the only legal way to conduct this type of transaction. However, most wholesalers do assignment contracts, and try and sell the assignment position. This is where they cross the line that most RE authorities consider to be practicing RE without a license.
The whole idea of wholesalers without RE licenses is a monster debate by itself. It was not my intent to engage in that debate, but rather mention the issue to a new wholesaler considering what they need to start their business.
@Cara Lonsdale I get that but if you are going to guide a person to get their license then it has to be stressed about those laws. Generally, if you have a real estate license you will not be wholesaling. There are ways to do it, however the agent and broker must be on the same page. In most cases if someone is getting sued for assigning their interest in a property (which is perfectly legal) then they have said something to the seller to prompt an investigation. There are tons of transactions being done by real estate licensed professionals for the board to monitor, what made that wholesaler so targeted?
@Jacob Anthony D. Estayo In this market it is not necessary for you to get your license but it does give you some added benefits such as MLS access. But again, I have been doing this 8 years now and never had a license and the properties are not being flipped in my name.
@Cara Lonsdale I get that but if you are going to guide a person to get their license then it has to be stressed about those laws. Generally, if you have a real estate license you will not be wholesaling. There are ways to do it, however the agent and broker must be on the same page. In most cases if someone is getting sued for assigning their interest in a property (which is perfectly legal) then they have said something to the seller to prompt an investigation. There are tons of transactions being done by real estate licensed professionals for the board to monitor, what made that wholesaler so targeted?
@Jacob Anthony D. Estayo In this market it is not necessary for you to get your license but it does give you some added benefits such as MLS access. But again, I have been doing this 8 years now and never had a license and the properties are not being flipped in my name.
Great convo!
These are completely false statements.
Clarification #1 - Realtors can absolutely wholesale. Having a RE license allows you to legally buy and sell houses on behalf of others. In the case of wholesaling, that is exactly what you are doing. The fact that it is being done at a lower price point has nothing to do with whether it can be done or not. So, I am not sure where you came up with that myth.
Clarification #2 - Again, unless your market doesn't require a RE license to practice real estate (which to my knowledge doesn't exist in the US), then anyone engaging in the practice of Real Estate without a license is subject to legal action. There are exceptions, of course, which I listed in my original post. FSBOs and anyone completing a purchase for themselves are OK. However, I would challenge you on that point too. Many states have limits on how many transactions you can do on your own before a license is required. I know there are laws for involving car sales too. I think you can only buy/sell 4 cars on your own within a 12 month period before you are required to have a dealer's license. Same concept.
Again, not saying that it isn't done all the time, but I am just saying go into wholesaling with your eyes WIDE open so you know that if you do not have a RE license, you are subject to legal action.
And if you need something more concrete, please refer to your state statutes listed below:
NRS 645.230 prohibits someone from representing another person (holding themselves out as a salesperson) without the appropriate license. That's not to say that the Real Estate Division might not complain about someone who is clearly operating as a business ("dealer") for the purpose of selling real estate. Activity that sufficient resembles the facilitation of a sale for another person can be grounds for prosecution for selling without a license under NRS 645.230.