Wholesaling Real Estate Laws In Michigan

Member since 2021 · 2 posts · 3 votes

So I am exploring wholesaling and was told that I could not sell more than 5 houses in the course of one year in the state of michigan without a license. Now I am very confused, as I know people that have been wholesaling in Michigan for 10 years or more and they are wholesaling over a 100 houses a year. What is everyones thoughts on this?

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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

We know several wholesalers in Michigan that have the real estate brokers license, so they are not violating the law.

Regarding selling contracts, believe Michigan has closed that loophole.

Of course, also know many wholesalers that are not properly licensed, that haven't been caught yet.

[email protected]248-209-6824

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Will BarnardPro Member
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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
5y
If they are not licensed, then they are skirting the laws, plain and simple.
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  Member since 2018 · 58 posts · 24 votes
  5y
  Originally posted by @Will Barnard:
  If they are not licensed, then they are skirting the laws, plain and simple.
  
  I think you need to clearly define your terms for their legal definitions. "Assigning" a purchase agreement is not "Selling". Look up the legal definitions of the terms that you are using.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
5y
We know several wholesalers in Michigan that have the real estate brokers license, so they are not violating the law.
Regarding selling contracts, believe Michigan has closed that loophole.
Of course, also know many wholesalers that are not properly licensed, that haven't been caught yet.
[email protected]248-209-6824
Logical Property Management4.9459 Reviews
Website View Page
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Account Closed
Professional · Canton, MI · Member since 2016 · 296 posts · 230 votes
5y
@Julia Ferris assigning a contract requires an assignment agreement. In order for that assignment agreement to be a valid contract, there needs to be consideration (i.e. some sort value or benefit exchanged between the parties). For wholesalers, that consideration is cold hard cash 100% of the time. So, yes, assigning a contract is equivalent to selling a contract.
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Yoann Dorat
Investor · Boca Raton FL · Member since 2017 · 255 posts · 188 votes
5y
@Louis Goerg BP is not the best place to get advice on wholesaling, If you have questions feel free to send me a DM and I'll do my best to help you out.

Do not overthink it, you can wholesale houses without being licensed in Michigan as long as you have the proper disclosures in your advertising. I know several guys actively wholesaling in Michigan and I never heard of anyone getting in trouble but I guess it could eventually happen if you cross a line.
With more and more people getting into wholesaling (thanks to gurus) the states are going to start to enforce/change their regulations, hence why I asked everybody within my company to get licensed in all of our markets last year if the rules ever all of sudden, we're prepared.
So not mandatory but I strongly suggest you get licensed if you planned on staying in this business for a while
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Darryl MatthewsPro Member
Real Estate Agent · Grand Rapids, MI · Member since 2016 · 143 posts · 49 votes
5y
From my experience it'll be vital to partner with the right Title Company.
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