Achieving Real Estate License to Wholesale Properties in Illinois

Wholesaling
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Achieving Real Estate License to Wholesale Properties in Illinois

DeVawn M Nolan
Member since 2020 · 1 post · 0 votes

Hello to All,

I am beginning my real estate journey and after tons and tons of research I’ve decided the best option for me as a beginner is to wholesale. To my luck in my home state of Illinois a law recently passed only allowing licensed agents to wholesale properties. With this new information I’ve decided I only have two options: Only wholesale in Indiana or go through the procedures to achieve a real estate license in Illinois and also do business in Indiana. I've been considering getting my license for a while now but what has been holding me back is that I would obviously need to work under a broker and since I have no intention of being a traditional realtor I would hate to go through the process and then not be able to find a broker to work under. I was wondering if there are any Brokers that specifically work with wholesaling properties in the Chicago land area? Or if anyone has any advice they think would help I’d greatly appreciate the advice. Thank you.

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Eudith VacioPro Member
Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
6y

Hi @DeVawn M Nolan if your intention is to only wholesale, Chicago has agencies that are investor friendly and allow you hang your license with them at a very low monthly cost. You may still have to pay for the MLS which is like $2k.

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  • Barry Pekin
    Specialist · Purcellville, VA · Member since 2015 · 1k+ posts · 841 votes
    6y

    @DeVawn M Nolan,

    If you're not already, start attending local REI meetings. Network. Ask around. I found a few brokers who are very investor friendly, and as long as they like and respect you, they will let you work with them.

    0Reply
  • Justin Polston
    Property Manager · Shelbyville, IN · Member since 2014 · 303 posts · 161 votes
    6y

    @DeVawn M Nolan if you're getting involved in Indiana, i work with investors, some who have gone on to get their licenses, which I have held. I'd be happy to discuss some options. Although not local to that area, just need to be in the same state.

    Let me know if I can be of help.

    0Reply
  • Joe Norman
    Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    I don't have any advice for you regarding Wholesale Friendly Brokers, but I would love to know more about this law that prohibits wholesaling w/o a Real Estate License.  Do you know what the law is called, or have a link to any articles about it? 

    0Reply
  • Alec Ramsey
    Contractor · Cheyenne, WY · Member since 2017 · 14 posts · 0 votes
    6y

    I have my claws in a very pretty off market investment in Winnebago, IL.   I am out of state but for all intentive purposes my mother owns it , is moving out and I'm looking for a either a cash investor , return paid after repairs.  Brrr method.   After some deeper analysis I will confirm that a wholesale may please all parties.   Lastly I think an investor only needs to fund repair costs while the mortgage is handled.  I can GC the subs, handle the budget schedule and materials.   In and out 6 weeks maximum.  Houses in Winnebago aren't sitting around for long.    

    Thanks for hearing me out







    0Reply
  • Alec Ramsey
    Contractor · Cheyenne, WY · Member since 2017 · 14 posts · 0 votes
    6y

    I know my options very well.   My market assessment could be dialed in better but some experience and a little capital will do magic right now keep that in mind 

    0Reply
  • Eudith VacioPro Member
    Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
    6y

    Hi @DeVawn M Nolan if your intention is to only wholesale, Chicago has agencies that are investor friendly and allow you hang your license with them at a very low monthly cost. You may still have to pay for the MLS which is like $2k.

    2Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @DeVawn M Nolan:

    Hello to All,

    I am beginning my real estate journey and after tons and tons of research I’ve decided the best option for me as a beginner is to wholesale. To my luck in my home state of Illinois a law recently passed only allowing licensed agents to wholesale properties. With this new information I’ve decided I only have two options: Only wholesale in Indiana or go through the procedures to achieve a real estate license in Illinois and also do business in Indiana. I've been considering getting my license for a while now but what has been holding me back is that I would obviously need to work under a broker and since I have no intention of being a traditional realtor I would hate to go through the process and then not be able to find a broker to work under. I was wondering if there are any Brokers that specifically work with wholesaling properties in the Chicago land area? Or if anyone has any advice they think would help I’d greatly appreciate the advice. Thank you.

    Hang your license with a 100% commission broker or partner with a broker.

    312-681-7487
    2Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    6y

    @DeVawn M Nolan Why not find a private or hard money lender and just purchase your wholesale deals and resell them?

    0Reply
  • Siobhan Kelly-Roberts
    Investor · Los Angeles, CA · Member since 2017 · 110 posts · 52 votes
    6y

    Look at this as a GOOD thing. Requiring a license will weed out the wholesalers who aren't serious and don't want to commit to getting licensed. Less competition = more potential deals for you!

    0Reply
  • Jeff Cichocki
    Lender · All 50 States · Member since 2015 · 401 posts · 250 votes
    6y

    Be careful with getting a license to solve the problem. It's not as clean cut as that. When you get a license, you are held to a higher standard and you have to put the seller first. This creates a problem for a licensed agent.

    The new law says you can only wholesale a house or contract once per year without a license. Lots of people are running out to get their license now thinking it will solve the problem. This creates a very tricky situation; a double edged sword if you will.

    When you put a house under contract for one price and then sell it at a higher price, you are not putting the seller first. This is a violation of your license. If you become licensed, the only thing you can do is to make a commission.

    There were a bunch of real estate friendly investors who announced that they would help. The NAR caught wind of it and changed some of their internal rules for agents to also squash it. The NAR is a major player in this new law. They want all properties to go through them; by force (law) if necessary.

    Be careful to what your reading out there. Lots of people aren't thinking it through all the way. Lots of people are only reading half the story. They are coming up with they think is the next great thing only to be wrong. The State of Illinois will be making examples of people who don't follow the rules and try to circumvent the law.

    I'm not going to drop any names, but I'm getting my info from someone at a very high level on this one.

    Good luck and be careful.

    1Reply
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Lydia R.:

    @DeVawn M Nolan Why not find a private or hard money lender and just purchase your wholesale deals and resell them?

     It is SUPER expensive! As a wholesaler, the fees are already marginal for most.

    I too am about to take the step to get my license.

    My last flip, cost me $15K in agent fees and $10K in private money closing fees and about $7K in interest for that private money loan.

    If I had my own license (brokerage), that would save me a LOT of money and a ton more deals to be made and a ton more ways to get paid out of each deal.

    I still need to look into the actual, theoretical and practical consequences doing what I do as a licence agent... but I know there is a lot of money gone, not having my licence!

    :/

    0Reply
  • Marcin Talaga
    Real Estate Broker · Chicago, IL · Member since 2015 · 102 posts · 53 votes
    6y

    I would say get your license, learn the PROPER way to buy and sell Real Estate, then ease into your wholesaling career. Even if you just want to wholesale, it wouldn't hurt to take the Real Estate courses, learn the basics, learn about all the rules and laws and ethics behind selling homes, etc. What a lot of sellers don't know is that even if you FSBO there are laws you have to follow that can open you up to litigation if you don't.

    0Reply
  • Account Closed
    Attorney · Skokie, IL · Member since 2016 · 270 posts · 109 votes
    6y

    Illinois revised the Illinois Real Estate License Act of 2000, which includes a change to the definition of a Broker. The new definition includes:

    “Whether for another or themselves, engages in a pattern of business of buying, selling, offering to buy or sell, marketing or sale, exchanging, or otherwise dealing in contracts, including assignable contracts for the purchase or sale of, or Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or improvements thereon. For purposes of this definition, an individual or entity will be found to have engaged in a pattern of business if the individual or entity by itself or with any combination of other individuals or entities, whether as partners or common owners in another entity, has engaged in one or more of these practices on 2 or more occasions in any 12-month period”

    For any person, or entity, engaged in the business of Wholesaling real estate, you cannot wholesale more than one deal a year. A Broker’s license is required if an individual intends to wholesale more than one deal a year and they will be subject to the rules and regulation of the Illinois Department of Financial and Professional Regulation.

    Be sure to familiarize yourself with the entirety of the new regulations, as there are important changes to Wholesaling that matter to how an individual engages in the business.

    1Reply
  • Zoran Stanoev
    Real Estate Broker · Chicago, IL · Member since 2015 · 147 posts · 73 votes
    6y
    Originally posted by @Alec Ramsey:

    I know my options very well.   My market assessment could be dialed in better but some experience and a little capital will do magic right now keep that in mind 

    I'd recommend starting your own post if you have a question like this rather than high-jacking someone else's post.  You're more likely to get a response. 

    0Reply
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