The Titanium Vault hosted by RJ Bates III

Oklahoma’s Surprising Rules for House Flippers!

• RJ Bates III • Episode 573

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Speaker 1:

Welcome back to Wholesaling Around the World the Oklahoma edition Now. The Sooner State used to be one of my favorite locations to wholesale real estate. However, this is one of the few states out there that has some pretty gnarly regulations against wholesaling. Back in 2021, there was the Predatory Real Estate Wholesaler Prohibition Act that was passed, and it was essentially mandating that individuals wholesaling real estate in Oklahoma have to obtain a real estate license. This has essentially crushed the wholesaling industry inside of Oklahoma. Unless you're willing to risk it right, some people are still out there.

Speaker 1:

There's always like this, always this give and take there's the regulation and then it's who is actually mandating that this regulation gets followed. Well, in the state of Oklahoma, it's actually the Real Estate Commission. The Oklahoma Real Estate Commission is actually the one that is mandating that you do become licensed in order to wholesale real estate. Now, what they refer to as wholesaling is that the legislation aims to prevent misleading sales tactics, predatory contracts and other harmful practices by requiring wholesalers to operate with transparency and ethical standards. Now, this is something that I've been talking about for a while. As these regulations come down, what are they actually wanting us to do? Transparency and ethical standards this is the issue that I have across our industry when we do things like lie, manipulate sellers, say that we have to go talk to our underwriting department, make things up, tell stories and lies instead of just being transparent about what we're trying to do. There are plenty of motivated sellers that need our help. One of the reasons why Oklahoma was one of my favorite locations to wholesale real estate was because of the amount of motivated sellers that needed our help.

Speaker 1:

Now, specifically inside of Oklahoma, the two cities that were great to wholesale in were Oklahoma City and Tulsa, the two major metros in the state. Oklahoma ranks 28th in population, with just north of 4 million people, so it's not really an overly populated state. It's kind of just right there in the midfield right. But Oklahoma City and Tulsa were great locations specifically for titanium investments, and it was Tulsa. Tulsa was one of the early markets back in 2015 and 2016. It was one of the first locations that we expanded to outside of the state of Texas, and so we kind of gained traction there in Tulsa and did a significant amount of deals inside that market.

Speaker 1:

Now Tulsa is one of those markets that's very similar to a Detroit or a St Louis or a Birmingham Alabama where you have to pay attention to the as-is comps just as much as the after repair value comps. You can get your teeth kicked in by the end buyers if you're not paying attention to it, because that's the competition that exists. Right, pay attention to what properties are listed for in the area, because why would they want to buy your property for $30,000 when they can go pick one up in the same condition or even better condition off the MLS for $25,000. So paying attention to those as-is comps inside of Tulsa is vitally important. Another reason why Oklahoma is a great location to wholesale was because of the amount of in-buyers. There are plenty of in-buyers inside of Tulsa and Oklahoma City. There's more in-buyers in Oklahoma City than there are in Tulsa. I just feel like there's more leads available to us and there's more motivation inside of the city of Tulsa than there is in Oklahoma City.

Speaker 1:

Now, moving outside of the two major metro areas, the rest of the state gets pretty rough right. It's very rural. Now, of course, you're going to have the tertiary markets that are right outside the major metro areas, like the Edmond Oklahoma's or the Norman Oklahoma's, where the University of Oklahoma is, or Broken Bow, just south of Tulsa. These are great areas, but outside of that, you start running into some really tough areas where it's difficult to dispo, and so what I always like to do when I got leads there is not necessarily turn them down and walk away from the motivated seller. They needed our help. I would always tell them we just need more time and more discount. Does your motivation match those needs? If so, we could see what we could do. Normally, we just had to work a little bit harder, maybe find that investor inside of Oklahoma City or inside of Tulsa that was needing a deal, looking to expand their portfolio. It just takes time to find those buyers that were willing to go to some of those smaller cities.

Speaker 1:

Overall, though, now in 2025, oklahoma has become one of my least favorite states to wholesale in because of this regulation. Basically, you have two options you can either become licensed inside of Oklahoma, work with someone that is licensed in Oklahoma, or take that deal down and then just wholetail it, sell it on the MLS, or do a wholesale marketing after you have ownership, because, realistically, the regulation in Oklahoma is specifically targeting the marketing of equitable interest in the property, not marketing a deal that you own. That is what they want to stop because of the predatory actions that wholesalers were taking in their eyes inside of the state of Oklahoma. Now, all in all, we know what this actually is. This is the Oklahoma Real Estate Commission wanting people to become licensed and abide by the fiduciary duties that licensed real estate agents have to abide by. That is the guidelines that they are wanting to put down on us, and, in my opinion, this is one of the more difficult types of regulations to overcome the states like Texas that just want us to disclose that we're wholesaling the property. I have no issues with that. I was very difficult on Oregon in regards to their regulations where they want us to become a licensed registered wholesaler in the state of Oregon. Well, this is even worse, in my opinion, because they want us to become a licensed real estate agent, which means, every single time we talk to a seller, we have to disclose that we are a licensed real estate agent in the state of Oklahoma and, like I said, we have a fiduciary duty to that homeowner, whereas an investor, you could come in and you don't have to really disclose that, even though I think you should be transparent with each and every seller. So, all in all, oklahoma used to be a great location. Now I think it's one of the worst states to try to virtually wholesale in. If you want to become an established Oklahoma wholesaler, then go get your real estate license In the future. What does this look like for Oklahoma?

Speaker 1:

I've always said when states pass really difficult regulations, like this one right here, what happens to those motivated sellers that need our support, that need us to come in and help them? Like I said, we have helped a couple of hundred homeowners inside of the state of Oklahoma in the past decade. Licensed real estate agents still existed during that time in the state of Oklahoma. They obviously did not offer them what they needed. So Oklahoma in the future is going to need wholesalers to become licensed to support these motivated sellers. I think in the future Oklahoma will become one of the best states to wholesale in. Because of these regulations, there are going to be an enormous amount of motivated sellers that are not receiving the kind of support that they need because wholesalers are essentially looking to other locations, other states that do not have these communist-type regulations that are mandating that you become a licensed real estate agent and because of that the motivation is going to increase and I think also prices are going to decrease over the period of time. Now I think that's far off in the future.

Speaker 1:

Where we stand right now, personally, we're not doing many deals in Oklahoma and if we do, we're probably just going to partner up with someone that is a licensed real estate agent in Oklahoma or purchase the property, take it down ourselves and then list it on the MLS or do whatever we need to do to dispo that deal. If you're doing deals in Oklahoma, I'd love to hear from you in the comments. How are you doing your deals? Have you seen anybody be taken down by these regulations? I see it's up to $5,000 fine and potential six months in jail if you don't abide by these regulations. So it is a serious offense. Pay attention to it. Let me know what you think in the comments. Show me some love Like today's video. We'll see you guys tomorrow.