Is the SAFE ACT an Urban Legend?


Do you remember an abandoned house or building that was the focus of urban legend growing up? There was a house in my Grandparents neighborhood that was the subject of speculation and the origin of horror stories for years. Depending on who you talked to, the stories became more and more exaggerated to the point where, as a kid you did everything to avoid the house for fear the “legend” was true. Those urban legends remind me a bit of the SAFE ACT.

Last year I attended a national conference of real estate professionals and investors. The buzzword throughout the conference was the SAFE ACT. How did it apply to each person there? What did the law say regarding wholesalers? Regarding those who finance sales? Those who flip properties? Attorneys presented on the topic, investors shared in their experiences to date, yet, we all walked away from the conference with one of two opinions. There were those who were so confused by the cross talk and different answers they just said “forget it”. Others walked away ready to dive into whatever state requirements applied to their business.

Now flash forward to 2011. It seems the buzz over the SAFE ACT is becoming that of an urban legend. What started out as the biggest game changer in real estate investing now boils down to half truths and plenty of misinformation. I say this not to minimize the impact the Act has had on our business, but to get us to stop and really take a look what was some rather scary ‘talk’ at the time.

Today, it’s impossible for me to write an article on what you should do in your business related to the SAFE ACT. Each state has different requirements and adoptions of the law. Furthermore, depending on what aspect of real estate investing you are in, or what business you own, the law applies uniquely. A good place to start so you can see how the Act impacts your business can be found here. When you review this exhaustive list of variances between states, it’s no wonder there was so much misinformation and rumor regarding the Act. Remember the Act was put in place to protect the consumer and reduce fraud in mortgage related activities. It does not control your entire real estate investing career.

The greatest lesson I have learned from this is something I should have remembered from the release of the Sarbanes-Oxley Act after Enron. Most confusion and misinformation spreads at the time the law changes. Working to get the accurate information and building a SWOTT analysis on the law change, along with appropriate implementation, will give your business a competitive advantage. Most importantly, you won’t fall victim to urban legend.

How has the SAFE ACT impacted your business? I would love to hear your story. I appreciate all your comments and feedback.

Photo Courtesy: Matt Trostle

About Author

Kevin Kaczmarek is President of Capital Blueprints, LLC. Serving a national and international client base, Kevin helps clients achieve their personal goals for long-term stability and solid financial growth through Self Directed IRA Investments and individualized Passive Income Strategies.

1 Comment

  1. Pingback: Must See Blog Posts: Safe Act, Passive Income, Wacky Calls and more…

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