If you have been told that it’s illegal to practice wholesaling without a license, you are in for a real surprise.
Although wholesaling houses is legal, it can also be performed by unlicensed investors. The fact is that it doesn’t make a difference whether an investor is licensed or unlicensed and obtaining license is not compulsory for wholesaling houses. Want to know why? Continue reading to find out:
How Can an Unlicensed Investor Wholesale Houses?
An unlicensed investor can wholesale houses because they don’t buy properties. In real estate wholesaling, the wholesaler/investor acts as a middleman. They contract with the seller and then assign that contract to the cash buyer in order to close the deal. In this entire process, nowhere in the transaction does the wholesaler become a direct investor or a property buyer.
Pros of Getting a Real Estate License
As mentioned earlier, obtaining a license is not mandatory for wholesaling houses, but it offers certain advantages to investors:
- It adds to your credibility and reliability. The seller is most likely to choose you over someone who isn’t licensed. Having a license gives them the impression that you will conduct business in compliance with the latest real estate standards. Furthermore, it will provide them with peace of mind knowing that they are contracting with a reliable person.
- Agents like to do business with other agents. If you’re licensed, it will be easy for you to connect with other agents. You will be able to find cash buyers without doing much work.
Benefits of Wholesaling Without a License
Even if you are unlicensed, you can still enjoy the benefits of wholesaling properties. Here’s how:
- The cost of acquiring a license is quite high. It can cost you around $1000 or more. To secure a license, you may have to pay for classes, the test and membership fee. All of this can be costly, especially if you are low or tight on budget.
- Besides this, it is also time-consuming to acquire a license. But since having a license is not a requirement for wholesaling, you can get started anytime you want and with zero cash.
- As an unlicensed wholesaler, you don’t have to use a 15-page book as a contract. You can make a concise and to the point contract with the seller. However, you need to make sure that relevant agreement language is used when creating the contract. Also, everything should be clear for transparency purposes, such as terms and conditions.
If you want to earn quick money but don’t have any real estate buying and selling experience, then consider wholesaling. Wholesaling is a legal investing strategy that gives wholesalers with no experience a chance to enter the real estate industry. You can start your career as an unlicensed wholesaler. Over time, as you gain experience and make profit, you can apply for a license. This will also allow you to make money through other real estate investing strategies and build your equity with time.