All Forum Posts by: Alex Palma

Alex, I am a real estate broker and investor here in Florida. I wholesale deals all the time without putting them through my brokerage; through a completely separate corporate entity. There is a process that you need to follow to do so in a legal capacity. The laws in NJ are certainly different than they are in FL. I grew up there but have been in FL since '95 so I certainly would not want to try to offer you a 'legal' response to your question as it seems many in here are attempting to do. 

I would suggest that you contact a local real estate attorney - that specializes in working with investors - and ask them to guide you through the appropriate process. I do know with absolute certainty that you do not need do be a licensed real estate agent to wholesale properties in NJ; if you do it properly!

I would also suggest that you change your verbiage with your 'end buyer'. Rather than taking an 'earnest money deposit' or 'deposit' I would suggest collecting a non-refundable 'assignment fee'. While common practice in each State is different and many wholesalers do things differently, when I am wholesaling properties I do not offer the 'end buyer', which is typically a cash investor with experience in the industry, an inspection period. I work on a  first come / first serve basis. The first person to bring me a contract with a non-refundable assignment fee gets the property. This avoids the necessity of collecting any type of refundable fees and potentially losing the contract. My end buyer performs his inspections etc prior to giving me a contract on the property. 

I wholesale in this capacity because I want to make sure that my end buyer is actually going to purchase the property and not just putting it under contract with the intention of trying to wholesale it as well. In the event the end buyer does not close I now have his non-refundable assignment fee to put towards closing the property when I have to do so per my initial contractual obligations with the seller. 

I might also suggest, moving forward, that you work in a more transparent capacity with your sellers and let them know that your intent is to help them get their property sold in a wholesale capacity. If they understand your intent at the beginning you will find they are often agreeable to it. This should help keep any type of potential negativity coming back from the seller as well in the event you can not get the property wholesaled. 

John, I think Wilson was being THEORETICAL in his explanation about how he would Wholesale - if he was a Wholesaler. Cheers... 

Alex: nothing personal...but....you are posting that you are entering into contracts to purchase property and then stating if you cannot find a buyer you back out. Are you telling the homeowners this or are you leading them to believe they have a concrete deal. That is EXACTLY what is wrong with "wholesaling": misleading homeowners. Put yourself or your loved ones in their shoes. How would you feel being lied to?