KGCI: Real Estate on Air - Is Wholesaling Becoming Illegal?

Episode Date: September 8, 2025

SummaryWholesaling real estate is not becoming illegal, but it is becoming more regulated across the United States. While the practice of wholesaling is generally legal, an increasing number of states are enacting new laws to add consumer protections and increase transparency in the industry. The primary goal of these new laws is to prevent wholesalers from acting as unlicensed real estate agents.Key Legal & Regulatory Trends ⚖️Increased Disclosure Requirements: This is the most common new regulation. States like Texas, Oklahoma, and Pennsylvania have passed laws requiring wholesalers to clearly disclose their role in the transaction. This means the wholesaler must inform all parties, in writing, that they are selling their interest in a contract, not the property itself. Failure to do so can result in significant fines or legal action.Restrictions on Advertising: Many new laws focus on how a wholesaler can market a property. Some states now prohibit wholesalers from advertising a property they do not own, as this can be misconstrued as the unlicensed practice of real estate. Instead, wholesalers are often required to market their "equitable interest" in the contract.Licensing and Registration: Some states, such as Pennsylvania and Illinois, have passed laws that require wholesalers to register with a state agency or obtain a real estate license if they engage in a certain number of transactions per year. This brings wholesalers under the oversight of a state's real estate commission.Granting New Consumer Rights: New laws in states like Pennsylvania and Oregon grant consumers the right to cancel a wholesale contract within a specific timeframe, allowing them to seek legal counsel or an appraisal before finalizing the deal.The controversy surrounding wholesaling largely stems from a lack of transparency by some individuals, which has led to a push for greater regulation by both consumer protection groups and licensed real estate agents.

You're listening to the Investor Agent Nation podcast, empowering agents and investors to collaborate effectively and grow their businesses symbiotically. Your host, Randy Zemnock and Eric Gross, share real-life case studies, trending tactics, and expert strategies that have helped them to accomplish over $1 billion in sales volume. Whether you're a seasoned agent looking to expand your business or an investor seeking to optimize your returns, you're in the right place. This is the Investor Agent Nation podcast. So is wholesaling becoming illegal? So this is becoming quite the conversation across the country. And what you're looking at on the screen is basically South Carolina. And I want to give credit to my buddies at Real Estate Skills.

Alex Martinez is one of the owners. Actually, fun little story. Alex Martinez runs this amazing coaching company now for investors as well. They have an amazing blog, Real Estate Skills. I really, really like their blog. They put a lot of time and effort into it. And I pulled a lot of the things from the blog for today because they really do stay on top of it. And Alex Martinez was actually one of my acquisitions guys.

He started with me as an intern years ago at the flipping company that I ran in San Diego. and now he's a successful investor, successful educator, I would say an influencer in a space, which is awesome. So I just want to give him a plug because this is where I get a lot of information from for today. So this wholesaling real estate legal in South Carolina, I started with South Carolina because that's been in the news lately the most because that is now officially past, right?

And you can find the blogs at realestateskills.com Valley. but the South Carolina one states this. Wholesaling real estate in South Carolina is legal if investors abide by the rules and regulations set forth by the state specific laws governing real estate transactions. Now, you might say, wait, I thought it said it was illegal if you even heard about it. The way they describe it after doing their research,

they believe that it is legal, okay? That said, South Carolina wholesale real estate laws are constantly changing, effectively allowing the South Carolina Real Estate Commission to regulate the real estate industry and protect the public's interest when involved in these transactions. Case in point, the latest amendments to the South Carolina Code of Laws. And on May 29, 2024, the House Bill 4754 from the South Carolina General Assembly signed into law. This bill adds articles 9 to Chapter 57, Title 40 of the South Carolina Code of Laws, updating the regular measures for real estate professionals.

in the state. On the surface, the latest amendments appear to prohibit the act of wholesaling. Per the amendment, particularly section 40 through 57 and dash 3350 in the South Carolina Code of Laws, it is explicitly stated that a real estate brokerage firm and its subagents are prohibited from engaging in representing others in or assisting others in the practice of wholesaling. And it's interesting. Tamara actually, she had an agent that was looking to join us and this was actually unfolding and her and I were communicating on this. So this is actually probably a good thing for you to listen to Tamara because there might be ways around it, right? And it's to be to be seen as it unfolds. As we continue, as a result, real estate investors across the state began to question

whether or not they were still allowed to wholesale properties. To be clear, the answer is yes. It's still legal to wholesale real estate in South Carolina homeowners want, wholesale real estate, South Carolina homeowners want to part ways with despite House Bill 4754 being signed into law. It is worth noting, however, that the method of acting as an intermediated between sellers and buyers has officially changed because of how the South Carolina Court of Laws defines wholesaling. A key provision included in H-4754 alters the definition of the term wholesaling. Here's what it says. Wholesaling means having a contractual interest in purchasing residential real estate from a property owner,

then marketing the property for sale to a different buyer prior to taking legal ownership of the property. Advertising or marketing real estate owned by another individual or entity with the expectation of compensation falls under the definition of broker and requires a real estate license. But this sentence here is key. Wholesaling does not refer to the assigning or offering to assign a contractual right to purchase residential real estate. So then they dive a little bit deeper. Okay. There are a couple of important distinctions to make here. And I'm doing this and I'm going a little bit more detailed in South Carolina because I want to set the precedence of how we should look at this in other states as these laws change.

Okay. And we have a really good case that's taking place and unfolding in front of us in South Carolina. So that's why I'm going a little bit deeper on this one. So a couple of important distinctions to make here. For starters, the act of assigning or offering to assign a contractual right to purchase residential real estate doesn't fall under this definition. Therefore, it's not the act of assignment that's against the law. it's the act of marketing the contract or property. Additionally, the new bill only prohibits wholesaling

residential real estate, which is defined by the South Carolina Code of Laws as real estate, which is used primarily for personal family or household purposes and is improved by one to four dwelling units. That means the traditional assignment of contract method is still a viable course of action for South Carolina wholesalers dealing in anything but residential property like vacant land, which is what I also do, or commercial properties with more than four units. So how can I legally wholesale real estate in South Carolina, right? One way of them they're proposing it how investors are trying to already do that are not licensed

is instead of attempting to assign contracts, you can establish a, legal partnership with buyers who are actively seeking properties before you start looking for homes to present to them. This partnership isn't just a casual agreement. It's a formal contract where you, as the real estate investor, are specifically hired to find homes for the buyer to purchase. Think of it as offering a specialized service rather than selling the right to buy a property. This proactive approach ensures that you have a clear, legally binding relationship with your buyers in place before a subject property is located, making the entire process more efficient, compliant with the wholesale guidelines of South Carolina. So in retrospect, it's a longer way of explaining reverse wholesaling. Where you find the buyers, you have the buyers that are interested in certain areas, you build relationships with them, become more of a partner with them and say, hey, I find a property.

I know I'm only going to you because we're partners. Now, I don't know the legality of what the paperwork looks like, and we're not going to get into that here. That's a conversation for an attorney in a state, right? That's the best person to acquire and present them this paragraph, right, as an example and have them tell you what that could look like. Another recommendation is practical strategy for navigating South Carolina's new real estate laws involves using a bond for title or installment contract.

For the record, I don't know anything about installment contracts, so I'm not going to speak about it. However, they are mentioning it as a viable option to explore if you're in South Carolina. This method allows you to gain equitable interest in a property with minimal initial investment while maintaining compliance with state regulations. Again, I would talk to an attorney in South Carolina how this can be done to stay compliant. And then the last one, which is probably going to be the easiest across all the states, if these laws keep going to the other states. You can proceed with a double closing when you've found your buyer.

This involves two back-to-back transactions. First, you close the deal with the original owner, paying off the balance due on an installment contract. Immediately following this, you close the sale with the end buyer. Who purchases the property at the higher price? You've negotiated. this double closing allows you to profit from the difference between the two sales. So this is what they're proposing. I don't know if this is actually allowed, right?

They're proposing it based on their research and I'm sure they talk to other investors in South Carolina. Hopefully they talk to attorneys. However, the reason I bring this up is because if you Google wholesaling in South Carolina, you might be frightened by seeing that it is just. you will just say, illegal, it's illegal, it's illegal, it's illegal. Well, is it? And we, we, instead of us panicking as agents who work with investors that wholesale or investors that, you know, wholesale and work with agents, we got to kind of chill out, read a little bit deeper into the bill,

speak to others like these, research it further, and essentially talk to a local attorney and or title company, and let them tell you what is the workaround that's legal. right? Because I can guarantee you, even though these laws are coming and South Carolina is one of the, you know, one of the few that took pretty significant action against it, there will be a way to do it. I have no doubt that we'll find a way, and this is an example, and if these all three options are true, there you go. Now double closing might not be as attractive because you have to actually close on a property and your costs go up. So sometimes the $10,000 you try to make on a wholesale fee

might get eaten up by the additional closing costs because now you have two closings versus basically having only one and in the true assignment of contract, the buyer that is taking over your contractual position is going to end up paying their buying costs, the purchase costs, and the seller is going to pay their own.

own, right? But when you're doing a double closing, now you are a buyer from A to B, so you have buying closing costs, and then you're also a seller to the C buyer, and now you have seller closing costs. So you're kind of adding those two additional costs in the middle, and that could technically wipe out your wholesale fee, and it might not make sense, right? So that might not be a great option, but it is an option. So what is that? If that would be the only option in your state that you could do, which I doubt that would be the case, but if it is, and if you really, really want to stay above the line and not take any chances, then this is probably the easiest, safest way to do it. So then you just have to negotiate a lower price, right, and create a bigger spread, right?

So instead of having a $10,000 wholesale fee spread, you negotiate maybe a $20,000 wholesale fee, spread and allocate, you know, five, six, seven thousand, which I think is on a high side for closing costs on both sides, right? So either way, there will be a way. So that's South Carolina. North Carolina is already looking to follow their lead. And I'm glad you bring this up to Mara, because one of the things I did, I listened to a podcast. I like to listen to It's on the market. It's called On the Market. And I actually listened to one podcast in June where a commissioner in South Carolina, a real estate commissioner in South Carolina, and he's also an attorney, was interviewed by the host. And he spoke about these changes.

He actually went into some of the ways around the law. He's like, you would think I'm a real estate commissioner and I want to kill wholesaling. He's like, that's not true because I'm an attorney. He's like, one of my biggest clients is an investor that there's a lot of wholesale. So that's not going to benefit me. However, he goes, I do go to all the meetings for all the real estate commissioners across the country. I think they have them quarterly. And he goes, interesting thing that he stated.

And he goes, a few years ago, three, four years ago, no one brought up wholesaling in their agenda. Like it wasn't even a topic of conversations. He's like the last like two years, I think he said on, it's been brought up every single meeting. It is an item on the agenda every single time. He's like, so it's not is this going to go and trickle out to other states? It is. It's just how are they going to take, well, let's say, you know, what South Carolina is doing in other states and implement it to their own, right? like Tamara mentioned, North Carolina is looking to follow lead.

They might literally implement the same exact thing, right? But a lot of other states are sitting on the sidelines watching how is this going to play out, right? Because attorneys are going to pick this apart, right? And they're going to find a way like we already see how we can do it. So it takes time to flush this out. It's not going to happen overnight where all the states are going to all of a sudden, and have all these strict rules, but just be prepared that it's coming. When, we don't know, but it's going to start going, right?

This isn't stopping this wave, okay? And we as investors, we need to understand and not be fearful of it, but understand how to pivot, how to adjust, how to talk to people that are doing it on a very high level. And I think the first people I would talk to are a lot of attorneys that deal with a lot of wholesalers today as we speak, right? because they will also try to find a way if it's legal to do it because they don't want to lose that business, right, as long as it's compliant. So let's look at another state that we should.

A couple of other states have this. Maryland, Michigan, Minnesota, South Dakota, and Wisconsin limit the number and frequency of real estate transactions before you need a real estate license. So this is a thing. many states are now putting this into law. For example, in Michigan, you're limited to four transactions annually before you must have a license. So a lot of states are going in a direction that if you're going to be doing wholesaling, it won't necessarily be illegal unless you have a license. So a lot of states are choosing to go that route.

Okay, you know what? Let's not make it illegal. Like South Carolina kind of try to wipe it out like, oh, to do wholesaling you need a license, but when you're licensed, you can't wholesale. So they kind of was like, what? Well, a few other states already have had this for a while where you need to actually get a license when you do X amount of transactions per year, right?

You can't market a property without a license if you want to assign a contract. You can only market the rights to assign the contract. Understand this critical difference to stay on the right side of the law. many wholesales get real estate licenses to avoid potential conflicts or constraints like I just mentioned. And then you got Illinois. Illinois is it legal there? Yes, and check this one. As noted a broker in Illinois has been redefined to include anyone who wholesales more than one property in 12-month period.

So you can only do one in 12 months. If you do more than that more than one, you have to get a license. So some are becoming as strict as that where they literally will only allow you one, right? Others have four, right? And then there's Pennsylvania. They've been the latest in the news and they're making some significant changes. I'm not going to read that what's, you know, what they're planning on doing. But at the end of the day, it went through the Senate and it says that it will require a real estate salesperson license under the Real Estate Licensing and Registration Act to conduct resident. your wholesale transactions in the commonwealth blah blah blah there is actually a lot more they're trying

to include in that not just getting a license uh it it it's pretty strict what they're trying to implement uh i don't want to talk about it necessarily in detail yet because it's now official but it's now going to the uh house of representatives for consideration so i i want to bring it up more from a aspect that, you know what, states are doing this. This is happening. But to answer the question that we brought up on the beginning, is wholesaling becoming illegal? I say the answer is going to be no. It will just have a lot of different hoops we're going to have to jump through. And many investors are going to get out of the business because they might not do the research like we're doing and they might be too afraid to keep doing it, not realizing that there's a way to do it.

with the right team, right, that digs deeper into it, finds in a compliant way of doing it, finds the right attorneys. If you're an attorney state, finds the right title or escrow company, if you're one of those. And you find a way to navigate through it. Because give you an example, in California, we're allowed to do, you know, wholesaling still, as long as it's disclosed to the seller that, you know, we're planning on doing that for a profit, all that stuff. And that's in most. You've got to disclose it to the seller what you're planning on doing. And you technically are allowed to use the C money to close. So if I'm doing a double close, and this is going to, might be a little bit technical.

But if I'm doing a double close on the same day, I got an A to B, B to C. and I can technically use the C money to close on my A to B transaction. So I don't have to actually bring any of my funds to the closing on the A to B. If I would call some escrow companies, they might tell me, we don't do that. We don't want to do that. Some might even say it's not allowed. But my escrow company, they're totally cool with it. Why?

Why would they do it and put themselves on the line if it's illegal? And I know the owner of the escrow company. There's no way that they're doing something that's not legal. The escrow company and title companies are regulated like crazy, right? They have audits every year. There's no way he would put himself at risk. But yeah, and they allow it because it's legal. But then you call somebody else and they'll tell you it's illegal and they won't do

and they won't use the C money to close on the A to B. So don't call one, what I'm getting at, don't call one attorney. Don't call one title company and take their answer as truth. They might just not be educated, number one, or they just might not want to take the risk at all of even trying to look into it. So dig deeper, talk to more people, call more attorneys, call more tighter companies, and you might find out that it's actually quite easy to do. right that's what I'm getting up anything for now you want to add from everything I said Eric yeah I would say part of why we're seeing this like there's good and bad to all of this happening like obviously it's going to kind of limit the amount of people that can do it it's going to

who can wholesale how you're going to wholesale it's going to be interesting to see how it goes state by state but part of the reason this is being done is just a lot of the people that were wholesaling or because it became I mean like you said Randy you know your buddy, you know, they never talked about wholesaling. And then a few years ago, it was mentioned on, you know, bigger pockets and other investor forms. And it was billed as this, you can get into investing without ever spending a dollar of your money and you make tons of money and you have all these people that are on TikTok holding like wads of cash or like, all I do is make calls and make 50 grand from my house. So the reason this is happening is because there was a lot of bad apples

that got into it. There is a lot of people that have gone out and done thanks to homeowners that have caused them to bring it to the state level. So I see the bad sides of it and I also see the good sides of it. Like if there is some, if there is some. Regulation. Yeah, regulation, but also just like difficulty to wholesale. I think you're going to see a lot of people leave it. I think it's kind of like what we're seeing with agents right now with the buyer

broker agreement. I think it's kind of thin out the people that aren't wanting to do this for a career or take a serious or treated as a profession and they just do it kind of on the side. So I guess it's like the one thing I want to add. Like I know most people are seeing this and they're freaked down. They're like, oh, nobody will be able to wholesale. Though you'll still be able to wholesale. Every state's going to be different and that's going to be kind of unique.

But there's also the positivity of the people that are wholesaling are likely going to have to have a license, going to be upheld by state law, going to have, you know, E&O insurance, going to have to be held to a higher standard. So that's actually to me a benefit, whoever I'm dealing with I know is going to be held responsible for their actions if they do something that they shouldn't. Who, I want to open that up, actually, because we have people from different states. Anybody want to speak if you know anything about your state? What's allowed and what might be coming down the pipeline, if anything different?

Anyone who want to chime in? Every week now? Yeah. Well, I see something happening in North Carolina that I really hate, and that is wholesalers getting projects under contract and then they put it in the MLS and they're actively marketing it and it says not yet owned, you know, owner or something that is not yet owned. And then like, what in the world? And I'm starting, I see that a lot. And I guess I was never, I was never taught to do wholesaling that way, like to market your wholesale in the MLS.

Yeah, most, I would say probably most states don't allow that. So, wow. So North Carolina, I guess, allows a wholesaler to list the property on the MLS based on what you're saying because there's no way there. Wow. That's pretty, pretty lenient if you ask. Yeah. Yeah, most don't allow it. So I can see that going away fast, that one, like in the new changes.

in Florida, Jim Whitaker, I guess he's, if you could unmute yourself, that would be great, Jim, but are you saying, oh, you can't, okay, so I guess he's seeing something very similar. So Eric, in Florida, is that allowed, do you know? Like, can a wholesaler also list a property they don't own just through the interest? It's not supposed to be, but it does tend to happen. All of our contracts down here are signable. So Florida is very lenient on wholesaling. And I have a property. I haven't. or anything changing anytime soon. And you would be super surprised at how many people will wholesale a deal and the agent has no clue that they're not the end buyer. Like we had a deal in Port Charlotte that I had a client interested in. He sent it to me. I'm like, dude, it's listed.

And it was being shopped as seller financing. So I was like, you know what? And it was marked pending. So I said, you know what? I'll call the agent and just see. And I brought it up to the agent. She's like, what are you talking about? I'm like, well, you know, this person.

posted in this group with these seller financing terms, like, is that what your seller's agreeing to? And she's like, that's not public. That shouldn't be public knowledge. I'm like, it's literally blasted in every investor group on Facebook that I belong to. And she was livid. Like, she was like, he was supposed to be the end buyer. Like, this is ridiculous. And it's like, so our contracts are assignable and you can get yourself kind of in trouble with that, which I know some states do. But as of right now, they're pretty lax on it. And how about Ohio? Do you know what's, What is it like there? Ohio is super lax as well.

Both of them are Ohio. We haven't had any problems. Kentucky. I know Kentucky, they're wanting you to be licensed here soon. And they're also wanting you, like you're supposed to not be able to market a contract, no advertising a contract.

So you mean not market the property? Both. They don't want it. They're trying to outright just, put an end to it. They're very not happy, Kentucky, which I'm surprised because it's a little bit more lenient of a state. But Ohio, we're still, we haven't had any issues.

I've heard of some chatter of possibly requiring a license, but nothing has it yet. Yeah. Another way that might become a little more common, it's a little more work and probably more costly is, you know, when you have basically set up different LLCs, right, that you're basically lock up a property in an LLC and then you find the buyer that wants the property, you trans, basically transition ownership. You're selling the LLC, not necessarily the contract, right? And, and then they become, you know, the closing is still with the LLC that was on contract. nothing was assigned, right? So you stay within the rules, let's call it. And then what really

happens is the buyer becomes the new owner of that LLC at the day of closing. And you remove yourself from being the owner. And that is for a fee. Right. So they're buying the company, which owns, which happens to own a property that just closed on it. Right. So that's, I can see that happening more and more. The challenge there is you're going to have to have LLC set up often, right? Which that's not that difficult. Nowadays, there's companies that do it very fast. So that's another way that I can see that it's going to happen.

I saw houses tomorrow I wrote on Investor Lift that showed pending on the market in Jacksonville, Florida. So wholesalers are getting on market properties on their contract and selling a contract on Investor Lift. Okay. I suppose that's allowed by a colon agent like Eric who didn't know about it.

Explain what investor lift is for... Investor Lift is a website where you can buy. I thought they were off-market properties, but they're wholesalers that are marketing their properties

to end buyers. And so I found one in Jacksonville that I called about. But I always check them on Zillow and Trulia and all the sites and I saw that it showed pending. And of course, the agent phone number was there. So I called the agents.

And the agent did not know that the person who had it under contract was a wholesaler. And I was like, oops. Didn't need to spill those beans. But yeah. So it definitely happens. Yeah. They're also doing it in Georgia, too, on investor lift. Yep.

Because I get properties from Georgia because I'm interested there. So it's going on. But I've seen more of it now in Florida, a lot more in Florida. Like just recently in the past probably five months. Yeah, this was a Monday for me. Yeah. If anybody's ever interested about Florida, real estate, the Wild West, that's why I tell everybody, having worked in Ohio and Florida,

like the stuff that we see in Florida is absurd, like 90% of time. I'm like, I don't even know how you all get away with this. So you see some really sketchy stuff down here. Yeah. Got it. All right. So here is kind of how I would summarize in all of this, right, is I would say, you know, having a buyer's list is going to be very important, right? So I think reverse wholesaling is going to really be, you know, something that as an investor, if you're serious about wholesaling is where a lot of your focus will probably be on the beginning, you know, having people where you're basically know exactly what they're. want so you're not marketing it anywhere. You're just going straight to that, let's call them your partner, buyer partner in that specific area. Right. And then depending on what is allowed or not within that state, you then just have to comply within, you know, can you assign a contract?

Do you need to create an LLC? Sell the LLC. Like what are you allowed to do or not, right, in order to fulfill the order for that rehabber, right? for that area, right? So this way, you're not blasting the property anywhere. You're not marketing in Facebook groups. You're not, it's not seen anywhere. You're making a personal phone call to your partner, right? So that would be a big thing, I believe, going forward.

Market the contract, not the property, is going to be a very common thing you see in the regulations, state by state, which I think it's kind of silly, to be honest. I don't understand that fully because like you still have to mention the property. So to me there's a lot of gray area in that concept, right? But yeah, I don't know how that's going to actually look in theory because I believe that that's the same in Florida. And I see everybody marketing the property normally. Like no one cares about the fact that you can't do that. Yeah. Randy, do you guys do you guys have net listings in California at all? Is that like any of the listings you guys can do? No. So there's not that anybody would use it, but there's net listings in Ohio. And what it is is you agreed to a listing price. And then anything above that is your commission. So if I had somebody that they would be willing to sell their property, like just give me 300. I don't care. You can sign. There are listing contracts in Ohio that you can sign. It's a net listing.

And anything above 300 is earned as your commission. So like when you were just talking about that, I don't know why. I just popped to my head. Like that would be perfect for somebody who's looking to wholesale if you got a license. And he said, I'm going to get you 300, but I'm also going to go ahead and list it for 340. And if I can get that, then do you agree? And there's people that I know that have used them.

I'm not a fan, but they have. Yeah. I mean, if it's legal and the seller is satisfied. I mean, at the end of the day, it just becomes. As long as the seller knows exactly what's happening, right? That's what they're trying to achieve here is protect the consumer. And there's many, many consumers that will allow that for convenience. Like there's a reason why houses get sold to investors because it's all about convenience, right?

For those sellers. It's not for everybody, right? Yeah. So another point would be, of course, double closing, right? the safest like we talked about. Of course, it will cost more money. And then you need to really, really understand your current laws, but you have to keep an eye on it because they're going to keep changing, right? So stay on top of that. Limit on real estate transactions per year. That's something you're going to probably see that's going to become very common. It's already,

I think, in like six states like we mentioned here. License, right, might be necessary. Not a big deal because it's not that difficult to get a license. Okay. Now, on this topic, I would say a lot of brokerages might be against it. So just because you have a license doesn't mean you can go and work with any brokerage, right? You need to interview them and ask them about their wholesale policies because like at EXP, where I am and many of us are even here, they're constantly, they allow it with approval. and each state has their own guidelines, right?

So and they keep changing. And I know because I've been on the front lines of, of wholesaling at EXP, we are actually one of the first groups to get approved to do it because they wanted to test it and see how they can roll it out, right? So it's constantly changing not only at the state levels, but it's also changing within the brokerage capacity. Some will just say, forget it.

We don't want it here. And that is usually the reason is because the E&O insurance they have doesn't cover it. Okay. You might find out that some brokerages won't even allow you to sell your own home as a flipper because their E&O doesn't cover it. Right. It's all about risk management for brokerages, right? Because the more they allow of these type of activities where risk is higher to have lawsuits,

Their E&O policy is more expensive. Right. So don't be mad at the brokerage. Instead, just interview more and see which one allows it and what are their guidelines. And I would also be weary a bit of the ones that kind of just say, oh, well, we don't care what you do, right? You just don't tell us. I don't know.

I don't know how I feel about that one. right. So, you know, there's a fine line there. I think I think the way I would approach it, especially that it's in the headlines now more than ever, right, that you probably would want to be with a brokerage that has some level of regulation as well, as long as it's nothing too wild and crazy, I guess. As long as it's explained to you why they're doing it, what, you know, how can you achieve it? And if it feels good, then that's the brokerage you go with, right? But it's like anything else. You need to interview attorneys and title companies,

which is one of the points here. You also have to interview several brokerages, right? Because everyone might say something different, right? So don't go to one and take them their word as truth. Okay. And as you, you know, we mentioned here, usually this will pertain to residential, which is one to four unit properties.

So commercial land is excluded, which is semi good news for me because I have a business that sales land. So that doesn't apply to us, which is cool. But that doesn't mean it won't apply in every state. So I have to check, right? And then the bottom line, even if we find ways to do it and someone tells us a certain way to do it, like we were just, for example, told by real estate skills. Apparently there's a way to do in South Carolina, right?

three different ways. You might not find an attorney that will be willing to do it right now or a title company because it's too soon. They might be like, we don't know how this is going to play out. We don't know this is a great area. I understand what you're saying and I agree. It sounds like it's legal, but I don't want to be the case that gets sued and then I become the guinea pig for the industry in South Carolina, right?

and get shut down and lose their license. So you might have a difficult time for a while, right, until someone figures out and that's who you end up going with from, you know, from an attorney or title standpoint. So these are some of the main things that I take away myself from my own research, from being in a business in California, you know, now having Eric in Florida and Ohio. I live in Florida now too. For more insights and to join the investor agent nation community, visit investoragentnation.com.

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