The Titanium Vault hosted by RJ Bates III

Can You Still Make Money Wholesaling In Oregon?

• RJ Bates III • Episode 558

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Speaker 1:

Welcome back to Wholesaling Around the World, the Oregon edition, or should I say, communist Nation of Oregon. I have been very hard on Oregon ever since they released the new regulation against wholesaling and I have regularly said I believe it is the worst and the most strict regulation against wholesaling. So today we're going to break that down and my other feelings about wholesaling inside of the state of Oregon. So let's just go ahead and get into the bad news right. What is going on in Oregon? Can we even wholesale and does it even make sense for us to attempt to wholesale in the state of Oregon? Now, there are a lot of moving pieces to this regulation, so I'm just going to go down this and give you a rough outline of some of the things that they've put in place here.

Speaker 1:

The new regulation took effect on July 1st 2025. The regulation requires wholesalers to register with the Oregon Real Estate Agency as a residential property wholesaler. Okay, if a wholesaler holds a valid real estate broker, principal broker or property manager license, they are exempt from the wholesale registration requirement. So again, if you're licensed, then you're okay, you don't have to disclose this. It's just really about us lowly unlicensed wholesalers out there. Wholesalers must provide a written disclosure to both sellers and buyers, including information about the wholesaler's status as such, their equitable interest in the property and potential limitations regarding legal title transfer. Okay, so a disclosure. Disclosures in advertising the law also mandates that disclosures be included in all advertisements related to wholesaling of residential property. Sellers have the right to cancel a wholesaling contract without penalty if the required disclosure is not provided before the contract is signed. The Oregon Real Estate Agency has the authority to investigate and penalize wholesalers who fail to comply with the new regulations and, looking at this, the penalties violators may face imprisonment up to 364 days and a fine of $6,250, or both, all right. It also just I want to make sure that it defines what a residential property wholesaling is as marketing residential property where the marketer only has equitable interest or an option to purchase than 90 days and has invested less than $10,000 in the development or improvement costs associated with the residential property.

Speaker 1:

Getting back to this, the law aims to protect consumers, both sellers and buyers, involved in residential property wholesaling transactions by increasing transparency and accountability. It also addresses concerns about unethical practices and potential exploitation by some wholesalers who may not be fully transparent about their role and interest in a transaction. Now, what's crazy about this is that there are different things. That I've read here that when you register with the Oregon Real Estate Agency it will require a background check as well as fingerprints. I mean, again, this is just getting a little bit absurd, basically trying to destroy wholesaling in the state of Oregon, which is interesting because Oregon is not like a state that I think many people have wholesaled in.

Speaker 1:

One of the reasons why the median home price in Oregon is $523,000. So it's a higher price point state, obviously, being on the West Coast. Traditionally any wholesale deal in Oregon was normally pretty decent because of the price point After repair values are normally higher. The purchase prices are normally, you know, if you're getting a median home, $200,000 to $300,000. Gives you plenty of room in there to make a substantial assignment fee. But again, just because of where it's located, it ranks in the 20s as far as population it's not a heavily populated state volume for us it's it's more in the lower third. Um, I think probably in the average assignment fee it's it's up higher, right, probably in the top 15. But I don't think that we as a nationwide wholesaler are going to miss out on much if we can no longer wholesale in the state of Oregon.

Speaker 1:

Now, that being said, looking at this law, we could go register If I plan on doing any deals in Oregon. I mean, I absolutely plan on doing this, registering with the Oregon Real Estate Agency. I don't know the exact. I saw different things, I haven't really looked into it too much. I believe it's $300 annually to register. Okay, the fingerprint that's kind of a pain in the butt. What am I actually going to have to go there? I don't know, I haven't looked into it that much. Okay, because, again, we don't do a ton of volume in Oregon. But the disclosures I have no problem with the disclosures. I have no problems being fully transparent with the seller about what's taking place here. I do want to make sure on the right to cancel. What I'm seeing here is it says the sellers have the right to cancel without penalty if the required disclosure is not provided before the contract is signed. So it's like all right if the disclosure is signed before the contract is signed. Then are we good? I believe we are Right.

Speaker 1:

Now, looking at the war on wholesaling report provided by Easy REI Closings, our friend over there, david Olds, it says Oregon has created a registration system for residential property wholesalers. Wholesalers must register before conducting business, ensuring transparency and oversight. The law aims to curb unethical practices and fraudulent transactions, which is crazy. On ethical practices and fraudulent transactions which is crazy I mean fraudulent transactions. What was an assignment? A fraudulent transaction? That's a little bit weird. Wholesalers must meet the state's registration requirements, which may involve additional costs and compliance measures, and then it defines what a wholesaler is, which I already disclosed.

Speaker 1:

So it sounds to me like the real issue here is they want disclosures and they wanna know that you're a wholesaler and they want you to tell everybody that you are a wholesaler. So, realistically, if you're just transparent and you're not lying about what you're doing in your business, you should be just fine, right? What's the most important thing when we're talking to sellers? It's the motivation. Do they have the motivation to actually seek our help, which I think we can? Where this is probably going to hurt people that are trying to wholesale in the state of Oregon is where they're not being transparent and they're trying to manufacture a deal. Maybe we weren't the best solution. I think they're trying to also protect homeowners from losing out on their equity when they're not needing to sell that house quickly or off market, and then it's also to protect the realtors, like most wholesaling regulations are.

Speaker 1:

Now, one of the workarounds that I have personally just kind of thought about is is, if you're inside of a community like Titanium University, where we have known legitimate end buyers inside of the state of Oregon, what we could do is, when we get a lead in the state of Oregon, instead of getting it under contract ourselves, we could call the lead, ask all the necessary questions hey, are you needing to sell? What's your motivation? How'd you come up with this price? What's the condition? What's your timeline? Go to that end buyer and say hey, end buyer, here's this lead, right here. I wanna refer you to this seller. Let them go lock it up under their name and then they can pay you a referral fee on the side. I don't see any reason why that would not be allowed. That's just doing a normal referral to side to side. Now again, most of you listen to this or go well, I don't know a known buyer that would be okay with that. Maybe it's going to impact my assignment fee. Right, in the past, I could go get a 30 or a $40,000 banker in Oregon. Yeah, you're probably not going to be able to do that anymore and that's okay. I mean, listen, these are things that we're going to have to navigate. The other solution is is if you're an Oregon wholesaler, you could go get licensed. You can get licensed as a residential property wholesaler. You can just abide by the rules.

Speaker 1:

Right Now, let's talk about Oregon itself. If you want to move past all of the regulations and say, okay, I'm going to be completely compliant, what does it actually look like? Well, obviously you have your main city, which is Portland, and there are plenty of deals to be done in the city of Portland. There are distressed sellers, there are distressed properties in the city of Portland and there are plenty of end buyers, which is one of the things that we're always looking for. Hey, is there end buyer activity? There's plenty of flips that go on there. I think you are a little bit limited. Of course, there's landlords everywhere, but from a cashflow perspective, it really doesn't make sense with a median home price in the $500,000 price point range, right? This is not like we're looking at Ohio or in Indiana or Michigan, where cash flow is bountiful. This is more of a flipper market, maybe even an Airbnb market in certain areas, but Portland is a great place to do deals Now.

Speaker 1:

Outside of that you're going to have your smaller cities like the Eugenes, the Salem's, the Corvallis. Obviously Eugene and Corvallis, where Oregon and Oregon State are located, great college towns, you can do deals there. And then on the eastern side of the state, more rural, there's a lot of rural locations. You get quite a few. You know acreage, raw land leads in Oregon that are. That's where you have to pay attention to. Is there buyer activity going on there? Because you're going to get plenty of action in the Portland, eugene, salem areas. But in the more rural locations dispositions can become a problem. So anytime I've ever seen a lead come across in our system in the state of Oregon I've always looked at it as like, hey, acquisitions is probably median to a little bit more difficult because there is competition, especially if it's in Portland right, dispositions is going to be really easy in some of those larger cities and then dispositions in the eastern side of the state and in those rural locations down south by California going to be a lot more difficult, going to take some more time.

Speaker 1:

But realistically, the regulation actually gives us the ability to speak in transparency and explain the situation to the sellers in more detail. So these regulations coming out. I've said it time and time again they suck on the surface, but then when we really get into it, it just makes us better. So, all right, I am now a registered residential property wholesaler in the state of Oregon. That sounds super official. It almost sounds as good as I'm a licensed property manager or I'm a licensed real estate broker. I'm a licensed real estate agent. I'm a licensed registered residential property wholesaler in the state of Oregon. I've had a background check. They took my thumbprint. They know everything about me. Here's what I can do. I can solve your problem. I'm actually going to give you disclosures explaining what's happening, so you know everything up front, full, honest, transparency. I love that.

Speaker 1:

And then, when it comes to time for you to do dispositions and maybe some of these locations that are a little bit more difficult, this is where you can talk about that timeline. You can look at them and say listen, as a registered residential property wholesaler, one of my things that I need to disclose to you is that there's not a lot of buyer activity here, so in order for us to locate that end buyer for this deal, it might take us some more time Very similar to how a licensed real estate agent would disclose to a homeowner who's wanting to sell their property on the MLS days on market. We can now do the exact same thing because the Oregon Real Estate Agency and the state of Oregon have now mandated that we come to the sellers with this full transparency. So in the end you can look at anything that's used against you as a point of leverage or an attack against you and for me, I look at it and I say what's gonna end up happening here? There's going to be less competition in the state of Oregon. More people are gonna look at it and say I don't wanna jump through those hoops. I don't wanna have to deal with becoming a registered residential property wholesaler and background check and thumbprints and fingerprints and all this other stuff, disclosures and facing imprisonment if I don't do things correctly. Or you can look at it and say I'm going to leverage that into being the professional on the phone and how I solve these motivated sellers problems.

Speaker 1:

So overall, do I think this is going to make a big difference in my nationwide virtual wholesale and business? No, I don't, because Oregon was never a high volume state for us. But as this regulation starts to take place and starts impacting the state of Oregon. What I do foresee is more motivated sellers realizing there's less people out there to help them, and that will only increase the motivation, and at that point in time, that's where we will, here at Titanium, use it as a point of leverage to close more deals in the communist nation of Oregon. Let me know what you guys think in the comments. Do you agree, do you disagree? Do you plan on wholesaling in Oregon, or are you like nah, I'm good, I'm out, I'm gonna go do this somewhere else. Let me know, show me some love, give me a like and we'll see you next time on Wholesaling Around the World.