Why is Wholesaling Bad for the Country . . .

[Account Closed]

Why is Wholesaling Bad for the Country . . . It Isn't!

Wholesaling isn't a problem, it's the way some people "Wholesale" that creates the issues.

The "clean" idea of Wholesaling is that the Wholesaler "has the intent and ability to purchase the property for himself". The problem comes in when deception enters into the transaction. If the wholesaler fails to mention to the seller that he has to find a buyer or fails to mention he can't close without a buyer, then he is being deceptive by default. And, unless you are a licensed real estate agent you can't represent the property or the seller anyway.  You are practicing real estate, a felony in a lot of places. And not very nice.

However, if you have a contract to buy the property, with the seller, and can in fact actually buy, then you can sell the contract but can't advertise the property. Subtle difference. Don't advertise a property for sale unless you are an agent or own the property.

You can though, do what I sometimes do. I take over the property using Sub To or creative financing or pay cash outright, go through escrow and transfer title into my name and now I have the right to sell the property. Does it cost a little more? Sure. But does it keep you out of a lot of trouble. Yes. Another way is to advertise the assignment but not the property. It's a subtle difference but attorneys general get loads of political points going after subtle differences. And it can cost you a lot more than an escrow fee.