Wholesaling in Ohio ?

Question

How’s everyone doing?   I have a property in Ohio I’m looking to put under contract but just heard from another source that assignment contracts in Ohio and Illinois is somewhere along the lines illegal?? Can anyone vouch for this or point me in the right direction, I am new to wholesaling but I just want to make sure I’m staying within the boundaries and not going to get into any legal trouble here. Thanks guys

Reece Iovine · Answer

Not illegal in Ohio, but you cant market the property for sale. You can only market the contract for sale. So if you post on say Facebook you can not post pictures of the property. You need to post with out pictures have people reach out to you then you can send them pictures. You could always try working with and learning from an experienced wholesaler first.

Jay Hinrichs · Answer

Illinois passed a law last year you need a real estate license to engage in any kind of bringing a buyer and seller together period.

Ohio has laws against unlicensed activity as well..  many threads on the subject..

Charlie MacPherson · Answer

@Salvatore DeTurris  Some very interesting information here: https://www.youtube.com/watch?v=9fi54S8nwUA

The answer is generally, no.  There are very narrow exceptions, most of which involve the intent of the party when to contract was written.  The person has to be a bona fide buyer with the full intent of closing on the property.

They state that you can market the contract only.  That means you can't even show photos of the property - only photos of the contract.  You can describe the property but that's all.

Intent is described at 14:45.  They talk about "investors" who put in multiple offers in a short time and whether that person has the ability to close on all of them as a means of determining intent.

The Board is very focused on those who are trying to circumvent license law, so I would not expect a dispute to go in your favor.  They also state at about 17:30 that the original contract is the one that has to be closed on.  A whole new contract at closing is not allowed.

Earnest money is at 21:00.  EMD has to be a substantial amount, though there is no specified amount.  A "nominal" EMD has to be enough to reflect your true intent to close on the property.

23:00 - troubling language in contracts.  Tying the property up while you find an end buyer.  Goes to your original intent.

Contingent on finding an end buyer, seller must immediately vacate upon finding this contract, flex option (option contract), clear statements disclosing to the seller that your true intent is to find another buyer - all language the board has a problem with.

27:00 - contract terms that state that the wholesaler is granted the right to show, market, advertise:  Not allowed.  You cannot have terms that violate license law.  You also cannot advertise it for rent until you actually own it.

Long story short, the regulators in Ohio are on to wholesalers and don't look kindly on their activities.  Don't expect leniency if you end up in front of them.

PS - finding this video took all of 30 seconds.  I just happened to be up at 3:00 AM and spent some time watching it.

Salvatore DeTurris · Answer

@Brandon Sturgill    I hear ya, it’s so crazy but thank you for the info !

Brandon Sturgill · Answer

@Salvatore DeTurris Here is a solid article with the in's and out's...bottom line is that if you do not intend to close on the property yourself you're brokering without a license. The unfortunate truth is that our regulatory agency has their hands full with so many dip sh*& agents they can't regulate the wholesale industry...it's open season here until it isn't...

https://josephandjoseph.com/ar...

Brandon Goldsmith · Answer

This is a pretty grey area in Ohio has it is illegal but definition but the definition on wholesaling and be interpreted differently and there are certain things you can do to get around it. If you plan on being in Ohio real estate for a while, I would just get licensed. @Salvatore DeTurris

Marc Rice · Answer

@Charlie MacPherson

Good insight there! Lots of interpretation and nuances

Remington Lyman · Answer

Here is a good video The Ohio Division of Real Estate made about wholesaling in Ohio https://www.youtube.com/watch?v=9fi54S8nwUA https://www.com.ohio.gov/real/

Antaun Williams · Answer

@Salvatore DeTurris this some bs

Salvatore DeTurris · Answer

@Brandon Goldsmith   I follow, I’m continuing to do my due diligence before I get anything under contract. Thank you for the reply

Wholesaling in Ohio ?

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