RE wholesaling in Florida is highly illegal?

[Kurt Charles]

Hello all. After many hours/weeks of research and communication with members on BP, I decided to go ahead and get my RE license for different reasons that will aid my personal goals in RE investing. I was considering starting out in wholesaling which is why I started research on doing it without a license.

Now, whether you operate as a wholesaler with or without a RE license is your business, I'm not here to judge. To each their own.

However, in studying for the RE exam, of course I am now being exposed to tons of FL - RE laws, etc and I ran across an interesting piece of information. See below:

*****Florida Real Estate License Law requires that an individual who, for another, in Florida , for Compensation* or valuable consideration will need a real estate license if they perform any of the following when dealing with real property:

• Appraises
• Auctions
• Sells
• Exchanges
• Rents
• Negotiates a sale
• Advertises or represents as an individual involved in the real estate business, through either oral or written representation
• Procures sellers, purchasers, lessors, business enterprises or business opportunities
• Closes any transaction which results in or is calculated to result in a sale or exchange and who expects to receive ANY compensation or valuable consideration

Real property or real estate means any interest or estate in land, or enterprise or business opportunity, including any assignment, leasehold, sub-leasehold or mineral rights. It does not include a cemetery lot or right of burial in any cemetery; nor does it include the renting of a mobile home lot or recreational vehicle mobile home park or travel park.

*Compensation is anything of value, paid, received, or expected to be paid or received or remuneration for services rendered.***** 

I know many will have different opinions as to what this means, but in my understanding, it seems as though wholesaling without a license is indeed illegal in FL.

I understand that many insist, "We are not selling properties, we are selling "equitable interest" in a property to another investor"... Sure, but at the end of the day, you are going into a binding contract with a seller under the "pretense" of an investor/buyer, "knowing" that you are not interested in buying and therefore that constitutes a "Business Opportunity", or "Negotiating of a sale", no?

Either way, it does not matter what others do, I am concerned with what I do. But, I would like to hear what others on BP have to say about this as I am new to the entire RE industry.

Thanks for sharing your thoughts.

[Sekelle O.]

I worked as a wholesaler in the DC area for about 3 years and closed 9 deals in that time. For most of the time, I was unlicensed. I got my license towards the end but found it pretty useless as a wholesaler and never did anything as an agent. 

I am confused: how does one use one's RE license to wholesale? The whole idea behind wholesaling is that as a wholesaler, you are representing your own interest and not the interest of anyone else in the transaction, not the seller, not the end buyer. As a RE agent, you are representing some other party in the transaction with a legal obligation to work for that person's best interest. You can't do both in the same transaction. Even as a wholesaler with an RE license, you have to make sure the seller and buyer understand that you are not working on their behalf but on your own behalf.

As for wholesalers being shady, that is a character trait, not an occupational trait. RE agents can be shady. And getting your RE license in not a substitution for training or a sign of competence in real estate. It means you passed a background check and a test (although I will allow that that does have its own value). If your argument is against lack of training or ethics or both, then your argument is not with wholesalers but with human nature.