Is Wholesaling Houses Illegal?
Depending on who you ask, you’ll probably get a different answer every time.
This has been debated for years and has been talked about everywhere from the Bigger Pockets forums to your local REIA meetings. Now, we’re not attorneys and we don’t offer legal advice but on today’s Podcast we offer a different view on the subject.
We also show you 3 EASY steps to follow if you have ANY doubts about the legality of Wholesaling. There’s just SO much confusion around the subject and unless you are 100% confident in what you are doing, you’ll never get very far in wholesaling.
The moment your fears are laid to rest, you can go out there and charge hard like only a good Rhino should!!
An ounce of prevention is worth a TON of cure!
If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!
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Tom Krol: Let’s have a conversation about the legality of wholesaling real estate. First of all, I want to preface this call by saying this, I am not an attorney, nor am I a licensed real estate broker, but we get this question a lot from new tribe members and I want to tell you what I know and I want to encourage you on a few things here. The way that I understand wholesaling, and I’ve had legal counsel, I’ve gone to an attorney and… I want to say this, I recommend that you do the same thing. Here’s the reason why. If in your mind you feel or believe that something is not quite right with wholesaling, that seems like you’re getting away with something, or that you feel like it’s something that has to be done quietly or to the gray area. The problem is you will never bless your business.
You’ll never explode your business because what will happen is you’re going to be stuck in that fear mindset. You’re going to be stuck in that fear of mindset. So I want you to… If you have a fear, what do we do with our fear, right? What does Clayton Morris tell us? Right? “You run towards your fear.” So if this is a fear for you, if you’re afraid and you don’t really want it, you have to do it quietly and secretly, you’re never going to explode your business. I want to encourage you that wholesaling is an honest, wholesome way to make an absolute fortune in real estate in a very, very, very short amount of time guys. It’s a great business and you should be proud to be a wholesaler. I always like to say that wholesaling has nothing to do with real estate and it’s really more of a pawn shop, right?
So pawn shops had been around since George Washington has been president and so has a signing contract. So here’s what I understand after talking to lawyers, wholesaling has to do with federal contract law, which is your right to assign a position on a contract. So I want you to know that I operate 100% my business with total integrity and I am proud to be a wholesaler and I will shout it from the rooftops. I love wholesaling. It’s been a blessing in my life and a blessing in my tribe members lives. But here’s what I want to tell you to do, “Don’t take my word for it.” There’s so much fear and confusion out here. I’m going to give you a quick answer that you can do right now, right? Because, it’s still only five o’clock. So you could do this right now or first thing tomorrow morning and this instead of being caught up in that, that group of people, when the whole group is, is rumors and fear and anxiety and doubt and confusion.
Be the guy or be the girl to go and research and find an attorney in your state and ask them this question. Is wholesaling real estate legal or illegal? And get some clarity. And I want to tell you what to look for with a real estate attorney.
Number one, most important, they must be in your state. Real estate rules and regulations are very much localized to your area. So make sure that this attorneys in your state.
Number two, and this is so simple guys, by the way, anybody who’s afraid that attorneys are like, it’s going to cost you $10,000 it won’t. It’ll cost you a couple of hundred dollars and it’ll be the best money you’ve ever spent because it’ll allow your business to grow in a healthy way, which is so excellent. So number two is that you want a litigating attorney. This is an actively working attorney who’s working in court cases. So not just an attorney who gives advice. So some attorneys, when you talk to them, if you ask them, have you actually been to court? They’ll say, no, I don’t understand the legal profession, but I will tell you that this seems to make a big difference. So you want a litigating attorney, an actively involved attorney who’s involved in lawsuits, who understands the law and practices it.
Number three is that when it comes to this subject, you want an attorney who is going to be familiar with real estate. More specifically, you want it, you want to pick out an attorney who is focused on a frack. Sometimes they call it frack or the regulatory boards in your state for brokers and for agents. So there’s all kinds of regulatory boards. You want to make sure that they’re focused on real estate and they’re focused on those regulatory boards. So when you go to my attorney’s website in Florida, he’ll actually say that he has represented cases working with I frack or I’m sorry it’s frack and whatever else it is.
So those are the three things that I want you to do. That’s why wholesalers who operate million dollar businesses are able to do so with a lot of joy and freedom because we’re not afraid of doing anything illegal. Now, when you, if you have a mentor and they tell you what to do, have the power to just go and talk to an attorney, run your contracts by an attorney specifically. And if you don’t know what wholesaling is, it’s very, very simple. You find a motivated seller, you put their house under contract and you sell the contract. That’s it. So make sure that your attorney gets to see your purchase agreement, your assignment agreement, and finally your marketing practices, what you are and are not allowed to do.
This is especially important if you are an attorney. You want to be clear on what you can and you cannot do. So run these questions by an attorney. Don’t ask your mentor if your mentor is not, if he’s, if he or she is a coach and not an attorney, don’t ask them. Because when you’re asking a question, this is really an objection in your mind. It’s, it’s not a question of this is not a question of how do I get around this mountain, this is a question of does this mountain in my road actually exist?
So you have to break through that and you have to just pick up the phone and call an attorney. Don’t be scared. It’s not going to cost you a fortune if you’re afraid of that. Ask them how much it’s going to cost to have this conversation but don’t. But don’t get caught up in that crowd with all the fear and the anxiety and the doubt and the frustration. Cause these I, I’ve had conversations with people who have said this and three, four, six months later they’re still having the same conversation where they could’ve done literally tens and tens and tens or hundreds of deals.
So, I really want to encourage you that when you’re confused about the legality of wholesaling, pick up the phone. Don’t take anyone else’s word for it. Don’t get in that room or crowd with the coffee drinkers at the REIA meeting and just go and ask an attorney. Have some guts as our buddy, Claude Diamond would say, have guts. So, so it’s, that’s, you know, something I just want to share with you guys and I promise you that after you speak with a litigating real estate attorney in your state, you are going to feel so much better. You’re going to feel so much better.
So, so that’s the tip for today guys. This is a no BS, no fluff zone. This is all wholesaling information that you could use right now. And if you want to find out more about investor grid or about joining our tribe, if you want to explode your wholesaling business right now, if you want to stop trying to wholesale and you want to start wholesaling right now, go to an investor grit, investor-G-R-I-T.com. Click on the application tab. If we like what you have to say, we might even invite you into be a Riedel. All right. God bless everybody. We’ll talk to you soon.