Jeff Watson is our guest for this episode and we’re talking about the legalities of wholesaling. Important stuff. As Jeff says, “Ignore at your peril.”
Jeff joins us from Conneaut, Ohio. He’s been investing in real estate since 1994, and he’s a lawyer specializing in keeping wholesalers out of orange jumpsuits.
In wholesaling, you get a property under contract at less than market value. Then you sell the contract to someone else for a little more than what you paid (usually $1k-$10k more).
When wholesaling, you must be a principal. You must be the buyer or seller. You cannot represent someone else. Otherwise it is considered brokering without a license in all 50 states. And that’s illegal.
You cannot show pictures of a house for sale if you don’t own it. If you only want to sell a contract, you must market the contract. Word of mouth advertising is the safest way to legally attract a buyer.
Listen and learn…
- Why being a licensed real estate agent is probably the best protection
- Why you must have intent and capacity to close on deals or you’re committing fraud
- Controlling the title company that is used and the closing date
- Slow down… close on property… clean it up… sell it on MLS
- Why it is that once you have title to the property, no one can undercut you
- Why you should always have an inspection clause with the right to rescind that includes a walk-through of the empty property a day or two before closing
- Building in the right to rescind if the condition of the property or the condition of the title is not what was represented
Mentioned in this episode:
- Joe’s podcasts on iTunes: Real Estate Investing Mastery Podcast
- Podcast Hotline: 636.255.8815
- Joe’s Coaching Program: Joe McCall Coaching
- Get Joe’s free Wholesaling 101 Mindmap
- Or text ‘Flip’ to 313131 to get the free Mindmap
- Jeff’s website: WatsonInvested
- Please review Joe’s podcasts on iTunes or wherever you listen
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