3 Ways To Legally Wholesale Houses In 2016
How can real estate investors still legally wholesale houses in 2016?
There is a lot of confusion and misinformation out there. There are many detractors who don’t want competition from wholesalers. They want those deals for themselves, or they really don’t understand the law. Or some have seen wholesaling done the wrong way or have read outdated materials and think that is the way all wholesaling is done. States have enacted various laws and regulations to protect the market, guard their streams of income, and keep consumers safe. But that doesn’t mean that true wholesaling is illegal.
Always check with an investor friendly local title company or real estate attorney on the finer points of your house flipping strategy. But definitely consider one of these three tactics which are legal in most markets…
Assign Your Contract
Assigning your purchase contract to another buyer is a streamlined way to make money on the house deals you can negotiate. There are many perks to this strategy including speed, avoiding closing costs which can eat profit, and more. In many areas this is not only legal, but expected. Check your local real estate contracts. Many Realtor and attorney contracts include a clause for assignment of the contract as standard.
Buy and Then Market for Sale
One of the big issues with wholesaling is marketing properties. There are many regulations on not marketing what you don’t own, unless you have a real estate license. However, you can absolutely publicly market and sell properties you do own. So if you’ve got a great deal use your cash or hard money loans and buy them. Then market them for sale and find an end buyer. Whether you fix and flip, or just straight wholesale from there is up to you. Once you own it you can unleash all the marketing you want from signs to Google ads, to listing it on the MLS with an agent.
Wet Back to Back Closings
Some types of ‘flips’ and wholesale structures have certainly been illegal in some jurisdictions for a while. This might include publicly marketing what you don’t own, as well as simultaneous dry closings where you aren’t funding your initial transaction first. However, by leveraging transactional funding and wet closing on the first, and then closing on your resale, this is completely legal, especially if you have only promoted the opportunity privately to your lists. That exit can occur any time after your first closing. Typically done in 1-3 days.
Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of ransactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.
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