Want to help investors find properties, but wholesaling is icky

[Renee Janowski]

Hey BiggerPockets Fam!

I have an idea of a real estate venture, but am not sure where in the game it falls into, or how to make it worthwhile/legal. It seems similar to wholesaling, but so much of what I know about wholesaling seems icky and illegal.  Any advice you can give would be amazing!

I have an airbnb and have done a lot to really learn that business. I love figuring out puzzles and would really like to scour the web for good deals on properties with great potential for Airbnb, showing potential buyers all the numbers and projected return/income for the property.  Obviously I want to be compensated for my research. I also don't want to be limited to just my immediate geographical area, if possible.  I am assuming the biggest issue with that would be of course not getting to personally see/inspect property.

My question though is how to do this.  If I am a wholesaler, I think it would work, but I can't stomach walking away from a contract, and I dont have the means to buy deals that can't go through. Also, the legality of it all makes me feel like it is brokering a deal and therefore needs a license.

If I get a license then I'm only licensed to broker deals in my state, and that doesn't help me take advantage of the national market.

Could I perhaps be a consultant of sorts who charges a fee to find deals?  How would that be contracted... and how would that not be illegal without a license?

Any help greatly appreciated.

[Don Konipol]

@Renee Janowski

Without a license you are opening yourself up to charges of unlicensed real estate brokering, and worse civil liability should a buyer be dissatisfied.

Often, states will have reciprocality for licensees with other states. Also, in some states a broker licensed in another state can sit for the exam without any educational requirements. A number of years back I held real estate broker licenses in Texas, Arizona, Nevada and New York.

You can operate as an advisor, and not be brokering real estate. The trap here is that you will obviously be advising people on investments, which arguably calls for licensure as a financial advisor.

So here’s the dilemma. If you research and find a good AirBNB property and put it out there with no recommendation, and you don’t represent the buyer or seller in a brokerage capacity, how do you get paid? And if you put it out there WITH a recommendation, analysis, etc., then your giving financial advice.

As per the financial industry, things have changed radically in the last 10-15 years. No longer are small timers “overlooked” by regulatory authorities. Worse, if you’re sued and a court buys the plaintiffs argument that you we’re offering financial advice without being licensed, you lose all statutory defenses and the likelihood of being held responsible for losses, legal fees, and extraordinary damages will be very high.