How to legally market a property as a wholesaler

Question

Its illegal to market a property you don't own.

That's acting as a broker/agent

Market the contract.

It's scary when you're starting out in this business, one minute you're on cloud 9, you finally found something that could potentially get you out that horrible 9-5 job, then.....you come to BiggerPockets and you hear how you can't do this or that as a wholesaler, they make it seem almost impossible.

Try this:

In your contract put a clause that states: Seller relinquishes the rights to market the property to (insert your COMPANY name).

Some people won't like it some won't care, if this clause works in your state (speak to an attorney first!) Then you just found a viable loophole.

Happy Wholesaling!

Account Closed · Answer

If it is a house I don't want to by buy for myself then I tell the sellers I will be marketing the property to my buyers. That is the purpose of the wording.

Allen Felker · Answer

Ive been seeing some smart people make really dumb comments today... A rehabber ALSO doesn't close unless they think they can resell..a buy and hold investor doesn't buy unless they think they can rent it out at a price that makes economic sense..I think the REAL problem people have is that a guy with a few hundred dollars can negotiate his way into controlling an asset 100,000 times his net worth and make a profit. Like i said before people are basically hinting towards the whole: if you're not rich yet or if you dont have excellent credit you can't be in real estate. That's BullSh*t. If my grandmother had a house she couldn't sell or afford to sell and was in a situation where she needed or really wanted a fast sale, I don't see the problem...

Account Closed · Answer

It's better to have a clause in the contract that allows you to assign the contract. DON'T but your name and/or assigns on the buyers line. Also in the contract you should have a statement 'This contract is contingent on my partners approval.' This allows you to back out of the contract if you can't find a buyer.

Jason V. · Answer

The glaringly obvious difference being that B&H Investors and Flippers don't make offers without the intent and ability to actually purchase the property - wholesalers quite often do exactly that on the hope they'll be able to find someone else to buy it - right, wrong, or indifferent. I like that you're passionate about the business, and if you're a follower of the Michael Quarles way, I think you'll be fine, both ethically and financially. Just don't forget that everyone invests for different reasons. I have zero interest in wholesaling - I used to be in sales, made a ton of money, hated going to work everyday. And that's what wholesaling is: a sales job. I'm at a point where I want to build passive income and wealth - big paychecks? Meh, I'd rather have time to spend with my family (and I love getting paid 24/7!)

David Dachtera · Answer

@Allen Felker,Also, be willing to lend a hand up.I've always liked the idea that a lit candle can light a thousand more and its flame never be diminished.

David Dachtera · Answer

@Allen Felker,Personally, I think we all do.The trick is to keep your perspective and remember where you came from, the hell you had to go through to get there and the hell others are going through on their own journey.

Jay Hinrichs · Answer

@Allen Felker not to say who was poorer.. but i remember helping my dad go door to door delivering phone books for a penny a piece... and wondering why we had no back seats in our 1958 VW bug LOL. been there done that.. don't like it.. but now that I have had a nice career in RE .. and remember your in the honeymoon.. your in a rising market.. rising tide raises all boats.. its not always going to be like this.but its a great industry.. and I have my teams that I fund nationwide ... all nice family folks and I proud to be their money partners.

Allen Felker · Answer

They're killing unarmed men and raising the prices on life saving medication by 600+% let us make our Damn money, there's serious issues in this world. I personally don't lie to sellers, I don't trick old ladies, honestly if I saw that the old lady needed as much as she could get I'd pass the deal to my agent and cut myself out the deal. Some people in this business actually DO operate with integrity, minimize risk and help people out.

Jay Hinrichs · Answer

Account Closed its those weasel clauses that just put a stain on wholesaling frankly.would you like someone doing this to your 80 YO mother.. no intention of closing unless they can resell.get the sellers hopes up make plans to move only to use your weasel clause to back out last minute.do unto others right..

Bhekizwe M. · Answer

Another great thread.thanks for sharing