Originally posted by @Paul Amegatcher:
Originally posted by @Bill Gulley:
Originally posted by @Steven Leigh:
Daniel Roman you will find that Bill and others are constantly jumping into every discussion with their opinion that wholesaling is illegal. It's always a good idea to seek legal counsel about what you are doing, but those of us who have already done that can tell you that their arguments don't hold water.
Even worse, their constant hijacking of every thread with off-topic posts is insulting to all users.
Dear Steven, I agree that people should seek legal counsel, but that would be from a competent attorney, in fact, ask several to ensure your attorney isn't an idiot.
Don't let you contribution score go top your head, I see you're active on BP, however from the original post, my comment was not off topic as I also considered the title.
Now, as to insulting, I don't believe it was insulting at all to warn our new member about wholesaling with assigned contracts, if you were insulted, get thinker skin in the real estate business.
You should know being in Ohio that assigning contracts as a business is considered brokering without a license. Now, if you have a license, you'll simply be in the arena of unethical dealers, but that doesn't stop many, that would then be up to a broker or the real estate commission in ethical dealings.
@Daniel Roman (name didn't come up to mention) be warned that this is a public forum, many here have not a drop of real estate training or knowledge, much less understand real estate or contract law, compliance or even the difference between real and personal property, regardless how cool they may sound or appear to be. Yes, we have con artists on BP.
My reference to a cage you picked up as intended. However, doing one assignment and getting caught at it will most likely be a fine and probably barred from ever holding any state professional license, jail is likely reserved for those repeat offenders who might do 10 or 20 deals and get caught, showing a total disregard for the licensing laws while conducting business.
Wholesaling can be done ethically and legally, it's not when all you're doing is assigning a sale contract.
Be careful too with options and leases giving some type of purchase credit to a buy, those are considered financing agreements and then Dodd-Frank may then apply as well as unintended tax matters, not to mention foreclosure requirements.
Now, back to the popcorn gallery. :)
Bill,
Your are wrong in this statement.
"You should know being in Ohio that assigning contracts as a business is considered brokering without a license. Now, if you have a license, you'll simply be in the arena of unethical dealers, but that doesn't stop many, that would then be up to a broker or the real estate commission in ethical dealings."
Ohio law does not consider assignment of contracts as brokering without a license. The expert on this is Attorney Jeff Watson out of Cleveland, Ohio. I'm going to link his interview with the Ohio Department of Commerce Division of Real Estate: http://watsoninvested.com/wholesaling/
In this videos they talk about legal ways to wholesale in Ohio.
Wholesaling is legal in Ohio if done correctly.
LOL, "I'm wrong" nope, not at all, you are in error. Read carefully where I was saying "as a business"!
I know that video well, Brian Gibbons posted it months ago and there are some key points made by those regulators that wholesalers aren't listening too, all they want to hear is that you can assign a contract.
Listen to what they are saying about "intent" and "ability to perform". Without true intent and ability to perform, you have a voidable contract, this was not touched on I don't believe in that video or by Jeff on his web site, but this is basic contract law. Listen carefully to the regulators, they bring up this point and mention an invalid contract.
If I have the intent to close as stated in the contract and the ability to do so, on my own as stated in the contract then I have a good, binding contract. If something then happens after my signing that contract, like I want to do a different deal, I am totally free (unless stated otherwise in the contract) to assign that contract, with or without compensation, to another party. That is ethical and legal.
"As a business" changes things, when you have no intent or ability to follow the contract as the principal buyer and you assign to another buyer AND you do so repeatedly, over and over, that is when you can be considered brokering without a license, it has become a different animal like a mule to a donkey.
Doing repeated transactions without ever closing in your name becomes a business operation, you're not dealing in good faith, you don't have that intent and ability along with the right to assign a contract as I mentioned above, you're "dealing" relying on another parties intent and ability to perform. That is brokering.
Jeff Watson advocates the same thing I do, you can go to his web site; That is, in operating as a business you need to close in your name or in the name of the buyer.
You can legally and ethically wholesale, but it isn't as the gurus teach it by simply assigning a contract. Use transactional funding and buy in your name, buy with seller financing, close in your name then payoff the note a few minutes later. Buy in the name of an entity and change partners, admit partners or transfer the entity. Why don't the gurus teach it this way, (?) because it is more complicated for simple minds and requires more effort in trying to sell their product of guru junk.
But, it's not that complicated, it's something that needs to be learned, there are various approaches that can be employed but none will simply be assign a contract to a real buyer as a business operation.
Now, I use to work with one of our Missouri Real Estate Commissioners, I've spoken to her many times and Mo. has the same view as other state like Ohio's stance, in 2017 more attention will be paid to illegal wholesaling as this activity is getting more prevalent, that means more crack downs and fines.
If you think Jeff advocates simply wholesaling by an assignment as a business operation, please let me know, show me and I can be on the phone with Jeff in minutes.
Now, folks, please go learn real estate before attempting to deal in real estate. Good luck :)
