All Forum Posts by: Will Barnard

 Exactly, it was not clear at all and anyone reading it would take the message as a suggestion to do it which is why I responded the way I did. If you make a post that has legal ramifications, you really should be VERY clear in your post. Even suggesting the option is grievous. 

I suggest you read this thread: https://www.biggerpockets.com/forums/93/topics/58383-the-truth-about-wholesaling-

Wholesaling is NOT real estate investing, it is basically a marketing business. So many people are told to start here with the expectations that it is easy, no credit, no money needed, etc and that is just not true (for the most part, sure any one person can get lucky and do a deal with no money but typically it takes a lot of marketing).

 If you perform any duties of brokering (which includes negotiating a deal, bringing buyer and seller together for a fee, publicly marketing a property you do not own, etc, you are performing the duties of a broker and thus, violating the law as you are brokering without a license. Check your state's department of real estate to see where they stand on this.

To avoid illegal activity, have your buyer in place first, contract with them via a new entity in which you both are owners and you simply sell your shares at closing for your fee or contact with them for a consulting fee and pass the deal along to them. No public marketing of property you don't own, no lying to sellers, no cash out of your pocket for EMD (earnest money deposit), etc.

 Just turn your head to the left and then to the right, you will find plenty of wholesalers. The barrier to entry is so low and everyone seems to be a wholesaler these days. The real question, how to find a real wholesaler? Simply follow the advice above from Jerryll and then vet them as many will be daisy chains, beginners, etc so you need to weed them out.

The easiest and most efficient way to find real cash buyers is through title records. Hav eyour title company search for all cash closed sales in the areas of your choosing, find cash closings from entities that repeat. In other words, if one entity name comes up multiple times in a year for all cash closings, there is a proven cash buyer. Then make contact with them and find out what criteria they are looking for.

The mention that finding buyers os the easiest part is true and that finding the deals is much harder - very true. But I disagree that you should find the deal and then find the buyer. There are many reasons behind that opinion too. One is legalities. Most states have license requirements for anyone performing the duties of a real estate broker or agent and many wholesale transactions are performed in which they violate the laws. Having the buyer upfront avoids the need to publicly market the property and provides you several options to perform the wholesale deal legally and ethically.  Second reason is if you know what your buyers want, you can shop for that specific criteria and have confidence in making your offer that you can close it.

If title was held with all 3 partners in their personal names as tenants in common, then each would pay their own share of income taxes based on their net gains. If the 3 partners held title in an entity, then the entity would have a return filed and send each partner their portion. If an LLC, that would be a K-1. If an S Corp, then it would be a form 1040 (along with all other schedules of the tax return).

The process is the same but you do not to take note of 1 item. For the free and clear, just set up the entity and transfer title into new entity. Make sure you ALSO transfer your insurance policy into the name of the new entity! This is true for either free and clear or mortgaged properties.

On a mortgage property, technically speaking, any transfer of title could result in the lender calling the note due. That said, this is so uncommon these days that I have never heard of any investor having this happen to them. I did hear one or two (several years ago) that had the lender mention it, but they never went through with calling the loan due. The clause is named - due on sales clause so look it up in your loan docs. As long as the lender continues to receive payments, they really don't care.

Your refi lender will typically require you to have 20% of equity in the deal and anything beyond that, you can likely pull via cash out refi. All lenders are not created equal so shop around to see who can offer you what. Most will also have seasoning requirements meaning you will need to have a specific time frame laps before they will give you a cash out refi, typically that can be 6-12 months.

Any added square feet regardless if it is a conversion of space or brand new will require plans, permits, inspections, and once the permit has received its final inspection clearance, the local city department will issue a certificate of occupancy and report it to the assessor for it to be added to title. If you skip the plans and permit for this (which will need to have both architectural and structural plans), you will not be able to have the added space recognized on title.

 Your welcome, happy to help.

Some will, some won't. Find one that allows it.