Wholesaling illegal without personal financial backing?

[Shaun Dewitt]

So I just spoke with a guy at an investment company who told me that if I try to put a home under contract without personal financial backing, meaning the ability to personally fund the property I intend to put under contract, I am committing fraud and this is "highly illegal"? It makes sense logically that there could be a law about this but there's also the possibility that he is/was steering me wrong to avoid competition. Does every wholesaler really have their own financial backing for every deal they find? What are the laws surrounding wholesaling and where should I go to research them in my state of Oregon?  Thanks,

Shaun Dewitt 

[Patrick Connell]

Shaun Dewitt , I would say that a loose interpretation of contract law, DTPA, and the like could definitely make it illegal to enter into a contract that you knowingly can't perform on.

It's one thing to say I'm going to try and wholesale this but if not I'll buy it and go from there, and another to go around putting a bunch houses under contract and then never closing on any of them; because you can't find a buyer.

Unless the seller understands way up front that you're going to terminate if you can't find another buyer, and you have them sign off as such, it's perfectly reasonable that a group of people (sellers) could get together and ask the attorney general of a state to investigate fraud. That type of activity is what gives wholesalers a bad name; leaving seller after seller with empty promises and more
Problems than solutions.