I emailed this article to my attorney to see the actual ruling and advice me if wholesaling HUD is truly illegal now in the state of Illinois. My (non legal opinion) guess is, the crime that these wholesaler-crooks committed is that they filed false liens on HUD properties so buyers can't buy them from HUD. Also, they committed fraud by submitting FALSIFIED proof of funds.

What are the lessons?

1. Get REAL proof of funds. Partner up with people with CASH and not rely on these "GURU POFs" that are nothing more than BOGUS POFs. When I submit a POF. I submit our BANK STATEMENT. That's also what I look for in a buyer - real bank statements, not a letter from a "financial institution" saying that my buyer has a line of credit (even though there's none).

2. Be careful who you listen to - specially to some gurus. I heard from a guru the strategy of filing a lien on a wholesale deal so your buyer can't go around you or your seller can't sell the property without asking for a release of lien from you in exchange for your wholesale fee. I guess these 3 wholesaler-crooks followed that advice to the letter - even on HUD owned properties and it landed them in JAIL! So be careful who you listen to - even here on BP.

3. There's a growing number of states cracking down on wholesaling. It's time to get funding or line up funding. Wholesalers should learn how to raise money or line up funding sources, specially transactional funding. Or get a business line of credit. Or partner up with someone with the cash. Bottomline, you need cash to do a deal - and now depending on your state - even a wholesale deal.

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Is Wholesaling HUD Now Illegal? 3 Wholesalers Indicted!!!

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