It looks like you've heard the negatives about wholesaling and there are some, but it's also a perfectly legal and viable option when done right. Unfortunately, there are those out there giving it a bad name and leaving investors with a bad taste in their mouth, but you don't have to be one of those. I could write it all out for you, but thankfully BP already did. Just give The Ultimate Beginner's Guide to Wholesaling a read and let me know if you still have questions after. I've been doing it for 10 years and happy to help.

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John Thedford

#5 Wholesaling Contributor

Real Estate Broker
Naples, FL

John Thedford

#5 Wholesaling Contributor

Real Estate Broker
Naples, FL

Replied over 8 years ago

WHY NOT?

What you are referring to is actually unlicensed brokering. The assignment clauses in contracts were used to assign in instances where someone may wish to put the property into a different name such as their LLC, etc. However, due to gurus and promotion of the practice it has morphed into thousands of people using that clause practicing real estate without a license. There are legitimate problems for most of these operators. First, many have no money and no intention to close. They then resort to lies and deception to get sellers to sign the contract. They use BS escape clauses promoted on BP and elsewhere to get out of the contract if they cannot find a buyer. It is really an unfortunate turn for the industry with many sellers being hurt by these practices. As an agent, my job is to get sellers the most money. These people, fringe operators, are trying to get sellers to take less and less for their properties, shave off some equity in their pockets, and pass the deal on. It is almost always a disservice to the seller. Now we have thousands of people, supposedly acting as brokers, most with no education, most with no money, etc believing they can operate as agents and skirt the laws. This is NOT a positive for the industry. Furthermore, most will never make any real money NOR will they build wealth. If you want to build real wealth in real estate, get a license, learn the business, learn to spot deals, and buy them yourself. Once you own enough rentals, you will have guaranteed infinite income. Working as an unlicensed broker, even if you make 5K, it will be taxed at the highest rate, probably won't be invested anywhere to maintain and grow, and will be spent. You will need to find deal after deal after deal just to make a living. There are also laws in most states that must be adhered to. In Florida for example, you cannot make a fee unless you have title ownership or equitable ownership. We have people trying to make money bringing "deals" to others with no ownership interest. That is a third degree felony. We have desperate people that know they are breaking laws, but have total disregard for laws or integrity trying to make a buck. Is this the type of person to be trusted in ANY deal?

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Brett Snodgrass

Investor
Indianapolis, IN

Brett Snodgrass

Investor
Indianapolis, IN

Replied over 8 years ago

Hi @Nicole Campbell ,

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