I was talking to a realtor buddy of mine and he was saying how hes phasing out of real estate cause hes not getting any business and the fees are killing him, also hes working as a cashier at walmart and his wife just went through breast cancer and the surgery that accomponies that wretched disease.
So hes got a sob story, i recommended investing in RE to him.
First excuse: no money.
Told him about wholesaling.
He said “isnt that an arms length transaction?”
“idk” i said. So i reexplained wholesaling and he said his second excuse,
“thats illegal”.
Lol im almost positive hes wrong, but back me up here. Is it illegal to wholesale in minnesota?
What can i, as a newbie, tell him to convince him its not illegal?
I’m not from Minnesota but I doubt it’s illegal there, I always hear people say it’s illegal and unethical to wholesale. So does that mean it’s unethical and illegal for walmart to buy electronics at wholesale prices and sell them higher to consumers? This method is been around for decades.
Its more like he is helping investors get into great deals at great prices when wholesaling, and if he is working with preforeclosures then he is helping homeowners get out of the mess they are in.
An arms length transaction is a good thing. That just means you have no connection to the property.
A non-arms length transaction is the bad thing. That means that you are somehow connected to the property and that their needs to be an extra layer of scrutiny to be sure that no funny business is going on. Things such as being a buyers representative on the sale of a property you own is one example. Another example is if one family memeber is buying or selling a property from another family member.
This is a prime example if what I mean when I say that real estate agents are not in the real estate business. They are salesmen. Just like car salesmen, or shoe salesmen. You have to teach him how real estate works. Don’t assume prior knowledge.
Yep blue. I still wanna help the guy you know? See if hed be willing to step up to another lvl of success (not hard considering where me and him are at)
well that totally clears up my slight confusion. I dont trust realtors instinctively (thanks to so many investors bad mouthing them :Pp) so i didnt realky believe him but thanks for clearing up the confusion. Now i know what an arms length transaction is. For clarification though, a non-arms length transaction is where you list a familys members house, or you representing a buyer whose buying your house? Can you give me a couple more examples?
If you were trying to refinance a construction to perm loan in which a family member acted as the general contractor is one example.
JJ, you can’t help people who don’t want to be helped.
Your friend is comfortable with the concept of earning a salary at Walmart. He is not comfortable with putting himself at financial risk, even if it means making a nice living.
There is simply nothing you can do to change him, and if you try you are wasting your time.
I would think that if he is working at Wal-mart he would be looking for anything he could do to try and get ahead.
Yea thats my point exactly. Again, hes got a sob story so id like to help. But i am not aboit to waste my time. Im just trying to get him a lil passionate about doing more with his life. But oh well.
Hi Blayde,
that’s awesome what you’re doing with your friend.
He may just needs some time go come around.
For now, just stay positive with him and don’t throw too much at him as far as investing is concerned. One has to be ready and prepared for stuff like we do.
Remember, that when you wholesale a contract- you are a principal in the transaction- the buyer. As such, you have the right to assign your position out to someone else.
In your REI club there locally, you should have some attorneys that you can run it by as well. They’ll tell you the same thing we’re telling you here: that it’s legal.
It’s up to everyone to keep your transactions not only legal, but ethical and moral as well.
Make sure the seller wins as well.
Dennis