Advice for a Newbie in Wholesaling

[Samone Johnson]

Hello BP Family! I am new to real estate investing and would appreciate any advice for wholesaling in Sacramento / Elk Grove. I've read tons of books and watched a lot of training videos but I learn better by doing the critical day to day tasks for success. I'm also looking to build a solid network of seasoned investors. Thanks guys!

[Mark Pedroza]

Make sure it's clear you have no intention to buy the property but you are selling contracts as a business, and since you have your real estate license sooner or later you'll have to disclose. Now you're selling securities without a securities license too. This is illegal and highly regulated. Now you've got the SEC on your back and you don't want a sanction on your license.

You need to get your business structure, paperwork and processes looked at carefully by a good real estate and business attorney... and get ahead of this.. before you're paying big fees on defense attorneys.

However, be careful when you market your deal as a wholesaler to an end buyer or investor. You cannot market the HOUSE (versus market your contract) for sale. Because when you try and sell 123 Main street a 3 bed 2 bath house on Craigslist without disclosing you have a RE license you are violating CA business and professionals code. And you are committing fraud selling a house FSBO you do not own.

Remember that now that you have your license your held to a higher standard!!

If you offer your CONTRACT for sale or market to people on your buyers list you should be OK. It's a very gray line and you really need local RE legal advice here. (CAR hotline)

Good luck....