Wholesale real estate - Texas

[Benjamin Fleming]

I’ve been reading a lot on the forum about wholesaling and it seems to be a very divisive topic. So I wanted to ask specifically about the legalities of wholesaling in Texas, is it legal? If so, what would need to be done to insure it’s done ethically and legally?

I’ve read the 2017 ruling on the topic but this too seems to have some grey area.

Section 1101.0045

“(a) A person may acquire an option or an interest in a contract to purchase real property and then sell or offer to sell the option or assign or offer to assign the contract without holding a license issued under this chapter IF THE PERSON:

“(1) Does not use the option or contract to purchase to engage in REAL ESTATE BROKERAGE; AND

“(2) Discloses the nature of the equitable interest to any potential buyer.

“(b) A person selling or offering to sell an option or assigning or offering to assign an interest in a contract to purchase real property without disclosing the nature of that interest to a potential buyer IS ENGAGING IN REAL ESTATE BROKERAGE.”1

Section 5.086 to Texas Property Code

“EQUITABLE INTEREST DISCLOSURE”

“Before entering into a contract, a person selling an option or assigning an interest in a contract to purchase real property must disclose to any potential buyer that the person is selling only an option or assigning an interest in a contract and that the person does not have legal title to the real property.”1

[Guy Gimenez]

Nothing gray in this statute. You can't daisy-chain deals or claim to be JV'ing deals when you don't have an equitable interest and you can't advertise you're selling something you don't own. Plain and simple.