Do I need to be licensed to whole sale?

Question

Hello, new whole saler here. I am trying to understand exactly how to whole sale real estate legally without needed a license. For the time being I will be working out of Minnesota. I understand that if I can not market the property but I can market my rights to sell correct? For any one that whole sales in Minnesota, it would be great to connect and ask some questions. Thanks in advance, Jake

Terrell Garren · Answer

Unlike a lemonade stand, you need no capital or knowledge. Supporting skills include the ability to pester 1,000 people while looking for the 1 desperate person who has no idea of market value, realtors or auctioneers. I can't swing a dead cat without hitting 3 wholesalers sending me unsolicited texts, calls, snail mails or worse yet, paying someone else to call me. They found me by purchasing some list of property ownership and using bulk contact communications to maximize their time while interrupting mine.

Tim Swierczek · Answer

@Jake Hill Wholesaling is an unlicensed activity in Minnesota.

Yoann Dorat · Answer

@Jake Hill as you can see in the friendly comments above It's a controversial topic, especially here on BP! All the agents are going to say it's illegal because no one likes competition. All the landlords and investors are pissed because of the outbound coldcalls/RVM etc... (it's the price to pay when you're in a marketing/sales business) and this is why you should stick to inbound marketing;)I never heard of anyone really getting in trouble for wholesaling, a few received cease and desist letters but if you get your paperwork right there is very little chance of getting sanctioned. There are 2 or 3 states that I'm aware of that requires to be licensed, so eventually, in a few years everybody gonna have to do it but it's not a big deal, my team got fully licensed a few years ago just in case the regulation change in the states we operate but so far nothing happened. Even if the law change it takes months or years to be implemented so you will have plenty of time to prepare and get licensed. If you're afraid of the regulations, another option is to double close. Good luck!

Chad Chalmers · Answer

@Jake Hill it’s prohibited per each state’s law. There are a handful of states that require a license to conduct a wholes transaction.

Ray Danishyar · Answer

@Jake Hill I think it also depends on the contract. You really aren’t marketing the property. You are just aligning two contracts. But this “gray” area has been around since the beginning of time. You won’t find clear cut answers. Specially on bigger pockets - it’s a divided answer. And also people who say negative thoughts on wholesaling usually have gone about it the wrong way. That’s why texts cold calls and mailers don’t work. It’s overly saturated. However there are many unique ways you can stand out. It all depends on your business mind set as well to get creative.

Jake Hill · Answer

@Jeffrey Donis I understand the agreement part. I have some contracts I plan to present to an attorney to review. I am trying to better understand how to legally sell the contract to a buyer. My thoughts are that you would need to describe and show the property, which would mean I am acting as an realtor and would need a license? How to wholesalers promote the deal legally?

Jake Hill · Answer

@Jay Hinrichs this is exactly what my confusion/questions were about. How to sell a contract with without making it look like marketing the property. Great advice about reaching out to the state. Thanks for the guidance!

Bill F. · Answer

@Jake HillAs I'm sure you have become aware, if you weren't before, wholeselling is a polarizing topic here on BP, so buckle up. One activity I'm 100% sure you don't need a license for is the use of the search bar. It's the magnifying glass looking icon in the top right of your screen. No cost per search either...

Jay Hinrichs · Answer

If you really want to know I mean you really want to know not just hear what you want to hear.Call or go to the department of real estate and talk to an authority there lay out your game plane and ask them.IN most states if you do not own the property prior to marketing it then you are acting as a broker / agent and its a licensed activity .. its only the wholesalers promoting wholesaling that say your selling a contract. I have yet to see a contract for sale that does not include a description of the property IE 3bd 3 ba new roof old roof peice of junk great house etc.. at that point your advertising real property but dont take my word for it.. like I said if you really want to know talk to the state NO ONE ELSE as they are the ones that make the rules and enforce them.. Some states take it seriously and will enforce the rules.. IL OR FLA OH others MD TX and many others could give a rip unless of course someone files a complaint then your going to have to hire a lawyer to defend yourself.

Jeffrey Donis · Answer

When it comes to wholesaling, you just need an agreement that protects your rights as a wholesaler and the seller's rights. You can find these agreements online, for free. Regarding the legalities, do you have any specific questions? @Jake Hill