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How to Use Money to Defeat Real Estate Laws

The Real Estate Wholesaling Landscape is Changing – Here's How to Stay Ahead

In the ever-evolving world of real estate investing, one strategy has long been a go-to for aspiring entrepreneurs: wholesaling. By finding deeply discounted properties and quickly flipping the contract to an end buyer, wholesalers could generate quick cash without the need for significant capital or credit.

However, the landscape of wholesaling is shifting, and real estate investors need to adapt to stay ahead of the curve. In a recent episode of the Disruptors podcast, host Steve Trang sat down with Corey Boatright and Chris Eyeman to discuss the changing regulatory environment for wholesaling and a new solution called "takedown funding."

The Rise and Regulation of Wholesaling

Wholesaling has been around for decades, with the earliest iterations involving "bird dogging" - finding distressed properties and connecting them with investors who would then purchase the homes. Over time, the model evolved, with wholesalers taking on more of the marketing and sales responsibilities.

But this growth has also brought increased scrutiny. States like South Carolina and Oregon have enacted laws restricting or even criminalizing certain wholesaling practices, such as marketing properties that the wholesaler doesn't own. The National Association of Realtors has also pushed for more regulation, seeking to protect their commissions from the rise of wholesaling.

"It's not where the puck is, it's where the puck's going," warned Corey Boatright. "I believe that more wholesalers are going to be required to take the deal down and, quote, be licensed."

Takedown Funding: A Solution for Changing Times

Faced with these new challenges, Boatright and Eyeman saw an opportunity to provide a solution for wholesalers. Enter "takedown funding" - a partnership model where a fund provides 100% financing to acquire the property, allowing the wholesaler to legally market and sell the deal.

"We want to be able to have a solution if they need to wholesale their deal, and they can't assign any more, and they quote, have to be licensed," Boatright explained.

The key benefits of this model include:

• 100% financing, with no need for the wholesaler to come up with capital

• A 90-day window to market and sell the property

• An 80/20 profit split, with the wholesaler keeping 80% of the profits

• A point-per-month fee structure, rather than upfront costs

Importantly, the wholesaler maintains control over the property and the sales process, with the ability to list it on the MLS and access a wider pool of potential buyers.

Navigating the Changing Landscape

For real estate investors, the message is clear: the rules of the game are changing, and those who don't adapt may be left behind. But with solutions like takedown funding, there are opportunities to not only survive but thrive in the new regulatory environment.

As Boatright emphasized, "Don't be late to the game. It's not where the puck is, it's where the puck's going." By staying informed, building relationships with lenders and partners, and exploring innovative financing options, wholesalers can position themselves for success in the years to come.

If you're a real estate investor looking to navigate the changing landscape of wholesaling, be sure to watch the full Disruptors podcast episode featuring Corey Boatright and Chris Eyeman. Their insights and strategies could be the key to unlocking your next big opportunity in the world of real estate investing.

Watch the entire episode here.

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