Is Wholesaling Property Illegal?

Is Wholesaling Property Illegal?

I am in North New Jersey this week looking at wholesale properties.  I have a few new clients I am working with this weekend too.  One of them asked me ” I was told by my real estate agent friend that it is illegal to Assign Contracts in New Jersey”. I find that interesting since, I was up in the same general area 3 times last year and we did assigning of contracts just fine. 

The point I am trying to make here is this, if you talk with the wrong people you will get the wrong answer.  What do I mean by wrong people?  You need to work with people who are actively investing or people who are working with real estate investors today. Upon further investigation, the real estate agent that my cient was working with focuses on retail buyers only.  She has never bought an income property, fixed and sold property, or even worked with cash buyers ever.  If this is the case, how is she going to know if it is illegal or not.  The real estate agent didn’t know and wasn’t interested in checking into it, so she said it was illegal to my client.  In some cases, they will just say it can’t be done. 

There are many real estate brokerages who do not like working with real estate investors.  They have a bad opinion and distorted view of what we do.  In addition to this, they view real estate investors as people whom they have to work hard for without getting paid.  Also they obviously are not doing research on the MLS to see who is buying the bulk of the properties nationwide for cash.  In a recent article I wrote titled  “Amount of Cash Sales Continue to Increase Nationwide – Proof Cash Buyers Are Out & Actively Buying Wholesale Deals“, I have identified the high percentage of properties that cash buyers are buying wholesale properties nationwide.   If they have a brain in their head and are excited by money, they will be willing to work with real estate investors. 

If you really want to catch the uneducated real estate agent in their lie, you will ask them to show you the state law that makes doing these types of deals illegal.  They will not be able to produce the law for you, because it does not exist. 

Assignment of contract and other techniques used to wholesale properties is very legal an used everyday to profit in real estate.  I know that if you talk to a realtor who is currently wholesaling properties or working with cash buyers who are wholesaling properties, they will tell you that assigning a contract and other wholesale techniques are very legal.  You can do the same thing with a title company or an attorney who works with real estate investors and they will say the same as the savvy realtors above.  People who are currently wholesaling roperties will know what you can do and can’t do in any area to wholesale your deals.  It is crucial to speak with the right people to get the right answers and find great success in real estate investing.

January 5, 2012 / by / in , , , ,

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