How do you wholesale real estate without a real estate license?

[Jared Hettler]

We were just curious as to two things about it that we can't seem to get a concrete answer on due to the "grey areas" in wholesaling. 

1.) How does the process change if at all if you don't have a RE license? Is it still the same pattern of finding a seller, getting it under contract, finding a cash buyer, assigning a contract, and closing? Or is there anything that needs to be specific since you are not licensed?

2.) What are the wholesaling laws in PA? I can't find any of this online, I searched for quite a while and couldn't come up with anything solid. 

@Chris K do you know anything about this? 

Thanks for any input, guys! 

[Maurice Smith]

@Jared Hettler I believe that currently, there is only one state that now requires a license to do wholesaling; if one executes more than one deal per year, that is Illinois. One can wholesale in various manners in the remaining states. It is crucial that one consult a real estate attorney to ensure an understanding of that state's laws.

I am not an attorney, but here are my thoughts: When wholesaling, one is not selling or listing a property; instead, one is selling one’s right to purchase a property under the negotiated terms of the contract and to which one has an equitable interest. One will come across many RE agents, Realtors, and Brokers that will say it’s illegal; it is not specifically, but one can conduct wholesaling in a manner that violates the law, so again it is essential to speak with an attorney.

Check out this BiggerPockets blog by Brandon Turner, which breaks it down very nicely:

https://www.biggerpockets.com/blog/ultimate-beginners-guide-real-estate-wholesaling

That said, getting your Real Estate license, in my opinion, is an advantage, or having someone on your team that is licensed helps. It does introduce additional complexities, such as disclosures, whether one’s broker is comfortable with wholesaling, etc. Still, it will allow one to provide other avenues for the seller, should wholesaling be determined not to be a viable solution for the seller's problem. It's ultimately about helping them, which can be done in multiple ways based on the seller's objectives and motivations.

The process, depending on the state you are wholesaling in, may change the flow slightly. Certain states have different assignability rules, which require other methods such as double closing or, in certain instances, using an LLC. Local investors and wholesalers can share perspectives on that. Assignments are not an issue in the states where we wholesale.