I just spoke to a laywer regarding real eate wholesaling in new jersey, and he told me that
real estate wholesaling in new jersey without an real estate license it is not legal to do it! does someone know about this?
If your lawyer said it is not legal then it is not legal…You need to remember that all lawyers do not know all law. I would find a wholesaler in your area and ask him what lawyer he uses and call that lawyer. That way you make sure you are talking to a lawyer that knows real estate law.
Basic rule that I use is never cut brush. This stuff is not new and there are no secret techniques out there. Don’t reinvent the wheel. People are doing everything we are talking about everyday. Talk to them and DO EXCTLY WHAT THEY ARE DOING. Don’t improve on it, don’t modify it don’t leave parts of it off. Do what they are doing the way they are doing it. That means you NEVER make a mistake.
What your lawyer is saying is “What I think is real estate wholesaling, I think is illegal”.
Join your local real estate investors club and talk to the lawyers there who cater to investors. I suspect they will tell you differently.
jmd_forest
Yep, go and talk to other investors that are closing deals in your area. Ask them what lawyers are they using to get deals done. You will have a nice list to pick from. My first deal I got stuck with paying double closing fees. I can tell you that this did not happen 2 times. lol. Some lawyers will try to get that extra money from you, but as long as you explain the situation you should not have that problem. I was a fresh newbie, and the deal was for $12000, I just wanted to get a check. I frowned to for 2 seconds, and said, what ever man, just have my check ready at closing. lol. It was still a pretty fat check. :cool
Most Real Estate Brokers and Agents are just as clueless as Lawyers who claim to specialize in Real Estate Law. The fact of the matter is that wholesaling is perfectly legal. A real estate agent has a listing agreement to broker the sale of their principal’s property. “Principal is the seller”. The agent doesn’t have any vested interest in buying the property. When you as a wholesaler give the seller an earnest money deposit and you and the seller enter into a sales contract, you have a vested interest in buying the property. You have the right to "sell your INTEREST in buying the seller’s property.
I used to do real estate in Jersey for along time yes it is legal but remember Wholesaling is like the underground of real estate. Just like sports has an underground be careful don’t get yourself in trouble.
I live in NJ and wholesaling in New Jersey is Legal. Now you need to find out what the attorney you spoke to is his definition of wholesaling. I think he may be referring to bird dogging.
When you put a property under contract, this gives you equitable interest on the property. You can then sell your contract to another buyer for a higher amount. Perfectly legal.
You can also do double closing using transactional funding (may not be doable with some short sale deals). Put the property under contract with the seller. Then sign a contract to sell with your buyer. Close the deal using transactional funding (you will pay for this money anywhere from 1.75% - 3%) with your seller. Then, you sell the property to your buyer. When using this type of funding you want to make sure the deal is rich enough for you to cover your expenses and still make a decent profit.
When speaking to attorneys always describe in detail what you’re doing so they can advice you properly.
Is it better to have an RE license or is it best to be without?
Find a new lawyer. This one is clueless.
Reminds me of the old joke: What do you call the student who graduated last in his medical school class?
Doctor.
Think about it. . . .
It really depends on how your the firm you work for takes to you doing wholesale deals on your own. Some brokers don’t like this because it puts the needs of their company second. :biggrin