Wholesaling - Nationwide - Legally Need an Agent?

4 Replies

Hello everyone, and I thank you SO much for any input that you can provide. It means a lot!

Our company is launching soon, and our business model involves marketing to property owners who are interested in selling at a discount, and our intent is to wholesale the property. A key component to our business is to be able to market to a specific property type owners nationwide. I have heard the debate regarding if wholesaling is 100% legal in all states without a real estate license. And my conclusion is that you are probably safe in most states, but the wisest move would be to get a license.

That would be totally fine, if our model was not to operation on a nationwide basis. That would require me to have my license in all 50 states, which seems a bit excessive.

Another option that we have considered is to somehow find a way to have an employee in each state, who is a licensed agent in that state..since real estate licenses are only valid per state. And we would have the licensed agent be the one who is in contract, and assigning the contract for us, instead of the contract being in the name of our LLC. They would still be working on our nationwide brand, but from a contractual stand point, the company is not on the wholesale contract, just the agent. Which again, seems excessive, but maybe that is the best way to do it in order to stay completely compliant.

I would certainly love to be able to enter into contract on a property in any state, offer it to our buyers list...and then assign it to the investor / buyer that we find. And not have to deal with using a real estate license at all. But of course, I want to do everything upright.

I REALLY appreciate any advice that you have.

Thank you!

Ross


The only state as of right now that you can only do 1 legal wholesale deal per year is Illinois. If you do more than 1 you have to be licensed. The rest of the states you are fine to wholesale and do not need a license. 

It may seem excessive to get licensed in 50 states, but I'd counter going nationwide with wholesaling is excessive. Most of the institutional wholesalers start in an area, gain some traction, set up shop in another market, and organically try to grow market by market. Going all out in 50 states without knowing the laws in each will be difficult. 

As far as employing an agent in each state, then you'd have to have a brokerage in each state. Agents need to be licensed under a brokerage.