Is wholesaling illegal in Charleston?

Question

Great morning all,

I would like to get started wholesaling in Charleston. I feel like I’ve learned all that I can from other wholesalers on YouTube. Would love to find a mentor that’s actually working in the Charleston market. I reached out to a realtor to let her know what I would like to do with real estate and she advises me against wholesaling in Charleston stating that it’s very tricky with the laws here. That state standard contracts are there for a reason and title searches are done for a reason. Also, that pay would be tricky unless I’m being paid commission as a licensed realtor and that’s it’s illegal here to receive cash payment for real estate transactions.

Can anyone shed lifht on this?

Jim Pellerin · Answer

@Jessica Douglas This question keeps getting asked and answered a lot and in many different ways. And I don't know of anyone who has been fined or charged for doing a wholesaling deal. After reviewing this question and talking to a lot of people, here's my position:

Wholesaling is legal everywhere ... if done right and it depends on your definition of wholesaling.

The reason, I believe, people are saying wholesaling is illegal is because some people are trying to broker a property for sale. You should never try and sell a property that you don't own and on behalf of someone else. Only realtors are licensed to do this.

As a wholesaler, the only thing you should be doing is trying to sell the contract that gives you the rights to purchase a property. This gets challenging when trying to market that contract without showing the property. The best way around this is to not market the property. You should already have a closed buyers list that you can send your purchase and sale contact information to. Make sure you stipulate that you are sending them information related to the contract and are willing to assign the contract to them.

Of course, you can always double close buy you still have to be concerned about marketing a property you don't own.

And, of course, you can always use a realtor to handle all your transactions for you.

Ryan Whitcher · Answer

@Jessica Douglas NOPE! I've done several assignments in South Carolina myself. Just make sure you're being ethical and not treating sellers like garbage. That's the main reason why wholesaling gets a bad reputation - too many newbies getting houses under contract at way too high of a price and eventually letting the seller down.

David Steadman · Answer

I am an investor in Charleston, and I just started this year to dive into the Charleston market. To answer your question there are very successful wholesalers down here if it is done correctly as stated above. I will say i think a select few realtors don't get what wholesaling is and thinks of it as a competitions. I would dive in if you have an interest to do so. Everyone is looking for deals.

There is a great monthly meet up that @Troy Gandee and his team put on once a month. It is very well run, and there are a lot of people that show up from all experience levels. Honestly it was great for me when I was first starting as it showed me there are a lot of people doing this successfully. I think the next one is on 5/6.

Jessica Douglas · Answer

@Ryan Whitcher thanks so much for your response! I will definitely keep that in mind when handling the sellers! Thanks again! 🙏🏾

Jessica Douglas · Answer

@David Steadman this is awesome! Thanks so much for that information! As well as letting me know about the meetup! I’ve only been to one REIA meeting here in Charleston but that was over 2 years ago. After COVID put a hold on the in person meets, I really lost interest. I know that now, in order to take this to the next level, I need to network. I will check out this meeting! Thanks again David! Hope to see you there! Nice to hear that you are doing well here in the Charleston Market!

Troy Gandee · Answer

@Jessica Douglas Wholesaling is legal in SC. You're technically just assigning your ownership interest in the property with your ratified contract to another party. This has been used for other purposes for decades. However, there are still a lot of things you can do during and assignment that are illegal, so I don't recommend you start making offers until you understand the laws. Every state and market also has best practices. You don't want to ostracize yourself right away by stepping on toes. We're lucky here that our investor community is pretty honest and trustworthy. We try pretty hard to keep the snakes at bay. Like @David Steadman said, we host a monthly meetup through REI Central. It's the 1st Thursday of each month from 6-8 at Palmetto Brewing Company downtown. I would also suggest doing some coaching through a local mentor who actually know state and market specific laws and regulations. Clear Vision Coaching is a great option for that.

Jessica Douglas · Answer

@Troy Gandee wow! Thanks for the amazing incite Troy! Very valuable information here! I will familiarize myself with the laws before jumping in. I really want to get a mentor so I will checkout clear coaching! I won’t be in town for this upcoming meeting but I will be for the June meetup! Looking forward to meeting up with the group and providing value while gaining value! Look forward to meeting with you! Thanks so much for taking the time to respond!

Jessica Douglas · Answer

@Jim Pellerin Great Morning! Wow, this really puts it into perspective for me! I hadn’t even thought about the marketing portion of this. I will make sure to create a buyers list and send out to them only. Thank you so much for taking time out of your day to respond! Big help! 🙏🏾

Is wholesaling illegal in Charleston?

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