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Is Co Wholesaling Legal or is it considering brokering without a license?

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  • Is Co Wholesaling Legal or is it considering brokering without a license?

    I was reading about a concept called co-wholesaling. It involves partnering with wholesalers and buyers. Basically you agree to bring one of your buyers to a wholesaler who has a property under contract and you split the assignment fee 50/50. The reverse would be that you have a property under contract and you partner with another wholesaler for them to bring you a buyer and split the assignment fee 50/50.

    Is this even legal? It would seem that I'm acting as a broker connecting buyers to sellers without being a principle in the transaction....especially the part where I market a property I don't own or have under contract myself to buyers.

    I live in San Bernardino County, California.

  • #2
    If you plan to do this, plan on people filing complaints about you to the authorities. One wholesaler who posts on another board reported receiving the following:
    STATE OF CALIFORNIA
    BUREAU OF REAL ESTATE
    2550 IUABIPOSA I,4ALL, SUITE 3O7O
    FRESNO. CA 93721-2273
    (559)445-5009
    November 09.2016
    Mr. xxxxxxxxxx.
    CLOVIS, CA 936,12
    CaIBRE File #:6-1 6-0921 -001
    Dear Mr.xxxxxxxxxx:
    1 \'i:ar specific real estate services do you provide?
    2 !ow long have you been providing these services?
    3 Do you work independently, or for another person or company as an employee (W-2) or
    independent contractor (1099)? Please identify for whom you work for and provide any employment
    agreement(s) you have in this regard.
    4. How are you paid for your services? Please submit proof of compensation. 5. How many transactions have you completed in the past year? Please provide copies of the
    pertinent documents for those transactions, including, but not limited to, purchase contracts, other
    contracts, escrow closing statements, etc.
    6. Are you operating under the authority of a license issued by another California agency or under an
    exemption from the Bureau of Real Estate's licensing laws? lf so, please identify the licensing
    agency and/or explain how any claimed exemption applies to your activities.
    Your answers to these questions and any supporting documentation should be forwarded to my
    attention.
    You rnay contact me at (559) 445-0004 with any questions
    Thank you in advance for your cooperatron.
    Special lnvestigator
    Fresno Enforcement Office


    There were followup notices to the above threatening cease and desists orders as well. Is it legal?? Have to say it's probably borderline.

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