Wholesaling for complete dummies

[Joy Baker]

I'm new to wholesaling. What are the first steps I should take to get started 

[John Thedford]

@Joy Baker

@Amber H.

Hello friends....I am the one that responds to most of these threads...and for good reason. My intent is to help people keep legal and out of trouble. If this is your goal, read on.

Usually when people say "wholesale" they mean assigning contracts. The only way to do that legally on a regular basis without fear of legal issues is to become a licensed agent. Then you could refer to yourselves as "wholesalers" without fear of the state coming after you. The only other way to legally "wholesale"--is by owning the property and reselling.
The applicable statutes are 475.42 and 475.43. If you meet people that are operating illegally and KNOW it, they generally hide in the shadows, avoid giving out much info on themselves, and are kind of like cockroaches that scurry from the light. It must be TOUGH to operate that way. Anytime someone has to fear getting in trouble, they obviously know they are doing some wrong or even illegal. 

So, if you want to start out "wholesaling", get licensed. Classes are a few hundred dollars, you pass those, and then take the state test. Once you pass that, you can go to work as an agent representing others...which is what assigning contracts generally is. Don't be confused by the people that want to drag you into illegalities. The LEGITIMATE reasons for assigning a contract would be to put it into a company name, put it into your IRA, take on a partner and put it in both names, etc. The assignment clause was NEVER intended for people to broker real estate and the state dealt with this issue in 475.43. I always make my contracts assignable..but the only person I assign them to is one of my companies, etc. That is what it was meant for.

If you plan on "wholesaling" out of state your actions would fall under that state where the property is located. This is why some people that were operating illegally using contracts to circumvent licensing laws with properties in FL got in trouble even though they live out of state. 

Personally, I don't believe in assigning as a business model. Admit it: if you had a property under contract for 50K less than its FMV, you would not accept a 5K fee and give away 45K. Many people advertising properties under contract, though licensed, generally offer little to no advantage to a buyer..but they are GREAT on shelling out BS sky-high returns.