Rental Property Investor · St Augustine, FL · Member since 2019 · 74 posts · 47 votes
I’ve got a property under contract, it’s a preforeclosure and I’m trying to wholesale it. This will be my first wholesale deal.
The owner lives out of state and his daughter is living in the property (I’m assuming rent free). The owner has put me in contact with his daughter to walkthrough and show it to buyers. I’ve done my walkthrough and had an inspector go to the property as well.
Now it seems that she is playing games with me and not responding to my messages until it’s past the time I asked to bring a buyer. I might add, I have about 6 interested buyers who want to “put in an offer”- so it will be a few showings, or at least until one of the buyers takes it.
In addition, the debt is going up every day due to daily interest- so the longer the tenant is in the property, the more it’s going to cost my buyer. She has showed no signs of getting ready to move out even though I’ve told her she’s got 10-14 days to vacate.
Specialist · Southeast Michigan · Member since 2015 · 300 posts · 244 votes
6y
The only option you have is to Partner up with Mister Thedford for a 19.99% hard money loan to whole-tail the property or else you’re committing a felony and going to jail pal.
@John Thedford so you’re saying assigning a contract to my personal network is considered “marketing”?
Geez. How do your "buyers" do so without you marketing the property? You ignore facts and break the law. As I stated I WILL turn you in if I get enough information. Better stay hidden. I am not the only one turning in unlicensed brokers.
Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
6y
@John Thedford Bro you are bold, but your smart enough to know who to insult and who not to. Not faulting you for that. I thought about tagging you on the post/thread were the lady was asking if the list she bought was good or a rip off. She was a beginning wholesaler or wanted to be. I didn’t tag you, because I felt that would of been a jerk of me and the lady didn’t argue fair. When you offline a few days we miss the excitement:)
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
6y
Just stating facts. People breaking the law don't like facts or reality. They have a sense of entitlement that they are above the law. Florida law is very clear and the OP is clearly brokering without a license. Is that an insult to point out the law?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
6y
I know exactly the thread you are referring to and I never replied back in that thread as you just can’t talk sense with that know everything but one thing person who is just starting out at 23 years of age. Had she taken another approach, I would have gladly stepped in to help her.
As to the rest of your comment, while John May take a very aggressive and forward approach in his dealings with illegal activities as it relates to wholesaling, I don’t think he is “insulting” anyone here, just delivering facts, and harshness aside, the facts are the facts especially in FL which probably has the most strict laws on the books about this.
I don't think wholesalers realize what "marketing without a license" means. Marketing is any act of sales, advertising or promotion. Showing the property to buyers is marketing. Advertising the property is marketing. E-mailing a buyers list is marketing. Telling anyone you have a property for sale is marketing. It is impossible to sell a property to someone without marketing it.
There is two options, get a license or buy the property before selling it.
The daughter living in the property is a tenant and has tenant rights. You don't need a lease to be a tenant. Only the the owner, her father, can evict her. Maybe his plan is to sell the property with her living there and let someone else be the bad guy. Figure the cost of eviction into your asking price.
@Jacob Kline make sure what you are doing here is legal.
Not a lawyer ... I believe a tenant must pay rent. Without paying rent, I believe they are a guest. Guests do not have same rights as tenants. Only issue is the owner is likely the only one that knows if the daughter is a guest or a tenant. Unless the OP is informed otherwise, they should assume the daughter is a tenant and has every tenant right of that state including minimum time to terminate a month to month lease (in CA, tenants over 1 year must get 2 months notice). This needs to be factored in on any purchase (not just a wholesale). If the law is similar to CA and the daughter is a tenant and has lived there over a year, they would be allowed to stay 2 months after notice even if the RE has been sold. This could make the RE hard to wholesale.
@Jacob Kline Have the father deal with the daughter. Learn the laws of the state with regard to what is allowed in selling of a RE. My own view is it is unethical (and possibly illegal) to represent to the seller that you are buying the RE if you only intend to buy it if you find a buyer. The seller could be relying on the sale. Wholesalers get a bad reputation. Not all wholesalers deserve the bad reputation.
@John Thedford so you’re saying assigning a contract to my personal network is considered “marketing”?
Jacob, it may appear that John is attacking you but I think most of it is frustration from all his dealings on this topic. Yes, if you negotiate a contract to purchase real estate (and you are not the actual or end buyer who closes), if you market that property in any way, if you find a buyer and then receive a fee for the transaction (which is the intent of a wholesaler), you have now performed the duties of a licensed real estate agent or broker and without a license in the state of FL, CA, and many other states, you have now committed a crime. Punishable by jail, fines, and/or restitution. This is why we advised you to seek legal help on your transaction.
I don’t want to see you get in trouble and we all know you are trying to make a living, but you must do so within the legal limits of the law or expect to have legal consequences (possible criminal consequences).
Please do consult your attorney familiar with real estate law in FL, they can tell you this very same thing. You may also contact the FL board of realtors as well. Hope that helps clear the air for you.
Now, if you have a buyer in place, form an entity and name you and your buyer as owners of the company, vest your offer in the name of that entity and at closing, sell your shares for your wholesale fee to that “partner”, you don’t need a license in any state working in that format.
@John Thedford I doubt anyone is worried about you reporting them
Actually the "skilled" lawbreakers do tend to operate as inconspicuous as possible. Quite a few that I have reported have gotten a cease and desist from the state. They can be charged with a 3rd degree felony.
Rental Property Investor · St Augustine, FL · Member since 2019 · 74 posts · 47 votes
6y
@Dan Heuschele thanks for the info Dan. Seller is 100% on board with the assignment of contract and understands what it means. He also agreed that he will deliver the property vacant.
I plan on having the owner deal with her regarding walkthroughs and vacating the property before closing.
Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
6y
@John Thedford let say @Jacob Kline wanted to close on subject property and then rent it or retail it and clean it out a bit then wholesale as the owner. As a hardmoney lender what would he need to do to get a loan through a HML. Other folks are reading this post so it will be educational for them as well. :) How much equity would need to be in the deal to make since using hardmoney?
Also would you as a Hardmoney lender loan money on a property you could not do a walk thu in?
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
6y
I suspect most HML will want 20% down but I see some claiming high LTV and some state they lend rehab funds. I have never walked a property I loaned on. I generally ask for 25% down and lend the rest except rehab costs.
Off topic of your post I have met victims of these unlicensed brokers. I have seen them in tears when they found out their "buyer" was a fake. I have seen people having heart palpitations because of these types of operators. I have seen sellers miss the birth of their grandchild due to lies and games. This is not a victimless action. It harms people.
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
6y
@Calvin Ozanick. Not true there is an issue here. The OP is telling the seller he’s a buyer but acting as a Broker. He has no legal right to show the property. The tenant paying rent or not has every right to her privacy. I suggest the OP seek legal advice. If he can’t close on the property and sell it himself he’s in trouble legally. RR
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
6y
@Jacob Kline your not assigning an equitable interest. You are showing advertising and offering a property to multiple buyers. The law calls it brokering without a license. RR
@Jacob Kline your not assigning an equitable interest. You are showing advertising and offering a property to multiple buyers. The law calls it brokering without a license. RR
They know that but have no respect for the laws. Anything for a buck...
@Dan Heuschele thanks for the info Dan. Seller is 100% on board with the assignment of contract and understands what it means. He also agreed that he will deliver the property vacant.
I plan on having the owner deal with her regarding walkthroughs and vacating the property before closing.
Does he know you are commiting a crime and just doesn't care? What if you cannot assign it? Scam your way out of the contract with weasel clauses? An owner CANNOT give you permission to violate the law. You are ultimately responsible for your actions. I know...you are entitled...
Investor · Member since 2019 · 18 posts · 39 votes
6y
@Will Barnard and @John Thedford. Any reasonable adult besides a licensed real estate agent knows he's not going to get into trouble for wholesaling. There are a lot of laws on the books that are outdated and are not enforced. You've probably broken some and not even known it. I also take marketing to mean putting on MLS and other things but not talking to a handful or even a 100 investors you know. Bigger Pockets podcast and website is a big proponent of wholesaling and have featured many wholesalers who make millions. Following your logic, the same website you support supports and illegal activity? Not likely
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
6y
@Joel S. After reading your profile I see you are an experienced investor with multiple properties and familiar with many ways to fund investments. I’m not sure why you are asking about hard money loans to buy a rental. Most hard money loans are far to high of an interest rate for a long term type of loan. Hard money is more commonly used for short term loans until a lower rate long term loan is obtained, or repairs needed to make a property livable/sellable are made. In short hard money loans are for the most part impractical for purchasing a rental. This website is full of new investors and posting the idea that they should seek hard money as a source of money for a long term investment is doing those new investors a disservice. IMHO. RR
@Will Barnard and @John Thedford. Any reasonable adult besides a licensed real estate agent knows he's not going to get into trouble for wholesaling. There are a lot of laws on the books that are outdated and are not enforced. You've probably broken some and not even known it. I also take marketing to mean putting on MLS and other things but not talking to a handful or even a 100 investors you know. Bigger Pockets podcast and website is a big proponent of wholesaling and have featured many wholesalers who make millions. Following your logic, the same website you support supports and illegal activity? Not likely
You just said (in so many words) that licensed real estate agents are not reasonable adults. That says enough for me to recognize plenty.
At any rate, you are missing the point, wholesaling is NOT illegal just like driving is not illegal but there are ways to wholesale and drive illegally. Once you understand that difference, we can have an adult conversation. For the record, Biggerpockets does not “support” anything other than a resource for people to come and network and learn from each other. They also recognize the difference between a legal and illegal wholesale transaction.
Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
6y
@Ralph R.i was asking on behalf of the poster. Other folks are reading this thread as well that needed that information. They need to price deals as if they had to close with hardmoney as a worst option. I agree with you though HML should not be the first option.
P.S about 8 years ago I went tarmingi hunting right there in Bethel:) Hopefully one day I will do it again. Never been there in the summer just winters.
@Will Barnard and @John Thedford. Any reasonable adult besides a licensed real estate agent knows he's not going to get into trouble for wholesaling. There are a lot of laws on the books that are outdated and are not enforced. You've probably broken some and not even known it. I also take marketing to mean putting on MLS and other things but not talking to a handful or even a 100 investors you know. Bigger Pockets podcast and website is a big proponent of wholesaling and have featured many wholesalers who make millions. Following your logic, the same website you support supports and illegal activity? Not likely
You are obviously not informed. There are ways to legally wholesale. I know licensed agents that wholesale. I also know people that buy and resell. They are operating legally. The OP is not.