Regulations, Regulations, AND More Regulations | King Closer Reacts

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Transcript

Kickoff And Format Of Reacts

SPEAKER_03 0:05

What's going on everybody? Welcome to the King Closer Reacts. I am the King Closer RJ Base III, and this is the series where I'm gonna watch a bunch of short videos, see if I agree or disagree. Let's get into the first video.

SPEAKER_04 0:17

I'm with Sarah Thorpe, and we're gonna talk about the new regulations coming down regarding wholesaling.

SPEAKER_01 0:23

So effective March 2nd of this year, the wholesaler has to disclose in a separate document to the homeowner that they are a wholesaler. And this has to be signed and dated by the homeowner prior to entering into a contract with them.

SPEAKER_04 0:40

Does the wholesaler have to disclose how much money they're making on the assignment fee?

SPEAKER_01 0:45

No, not directly, but they need to disclose that they're going to make a profit, that they are signing the deal or double close. It's all about the intent. If you intend to wholesale it, you have to disclose that. They have to put in there that they can seek real estate, a realtor, or an attorney's legal advice on that disclosure. It also needs to say that they do not represent the seller. They are not an agent, that they are in fact wholesale. All of that has to be conspicuous on the disclosure to the home.

SPEAKER_04 1:18

Does this give them any more rights to market the address pictures? Because I know before they typically work. Okay.

SPEAKER_01 1:25

So only the homeowner can market the property or a licensed agent on behalf of the homeowner. This is actually making wholesaling more restrictive. It's not banning it by any means, but there is going to be a lot more compliance and regulation around wholesaling.

SPEAKER_04 1:44

Are they hiring any additional compliance officers on the state level to actually enforce these regulations that they're enacting?

SPEAKER_01 1:51

Well, I would hope so.

SPEAKER_04 1:52

But we don't know.

SPEAKER_01 1:53

We don't.

SPEAKER_04 1:54

If you have any more questions on these wholesaling regulations, reach out to me, Realtor Bremington.

Building Buyers Lists: Canada vs US

SPEAKER_03 2:01

So I actually like this regulation in Ohio. And this is specific for just the state of Ohio. There are different states out there that have similar types of regulations, but what they're referring to is just Ohio. And so with us having to disclose this up front, this does get rid of the whole, hey, my contractor or my partner's going to come out there and the lying and the deceiving to the to the motivated seller. So I personally don't mind this. Transparency has never been an issue for us. And in fact, it makes the dispositions process a lot easier when the homeowner knows exactly what's taking place. And so it's a lot easier at night to go to bed. It's also a lot easier to renegotiate the price if you need to. Because now you can go back to the seller and say, hey, this isn't me that's needing it this price. It's what the buyers have actually said. Then buyers have come back, and these are the offers that we're receiving. This is why we need to come down. So this transparency, I would I would prefer for these types of regulations to come down in all 50 states. The only ones that I actually have issues with are when it's a money grab and it's about getting license when we don't need to be licensed. That's the ones that I have issues with. This transparency regulation, no issues whatsoever.

SPEAKER_07 3:29

So I woke up today and I added 100 new buyers for my buyers list to sell my real estate wholesaling deals to. And here's how I did it. You're gonna go on to Facebook and then go to the group page, search up Alberta Real Estate Investors Network, or there's tons to choose from. You're gonna want to go down to the most recent posts. This one, for example, dude selling a gym in Calgary. So a commercial property. We're gonna get some commercial buyers today. We got 36 comments, all emails. These are all buyers that are interested in commercial properties in Calgary. And all you need to do is rinse and repeat. So you gotta go through all the groups, take the emails, and then all you have to do is add them to a spreadsheet. And then when you have a deal in that area that fits that criteria, you email it to them and then they buy your property.

SPEAKER_03 4:15

Yes, this is what we all did in 2016 and 2017. It is now 2026 where we have softwares that we can pay$99 a month to, and we automatically all have that information across the entire United States. Now, that being said, this kid, he's in Canada. And what I know of wholesaling in Canada is that there are a lot more privacy laws. And so, because of that, some of the dispo softwares that we use here in the United States, they don't have that in Canada and they don't have as much access to buyers' contact information. And so I could see how they're still having to do what we did a decade ago in Canada, but in the United States, we don't have to do that. So God bless the USA. And oh, by the way, we also control your sport. We now own hockey because we won both the gold medal and the men's and women's hockey. So we basically own Canada. Welcome to being the 51st state.

Arizona’s Proposed 82 Percent Rule

SPEAKER_02 5:18

Wholesaling? It's dead. Or at least that's what the internet wants you to believe. See, there's a lot of discussion going on about some new legislation in the state of Arizona. Things talking about equity purchaser and an 82% rule. Now let's be clear, this law has not been passed yet, and there's a lot of things that still need to be vetted out. But here's the truth. Arizona is not banning wholesaling. What they're doing is cracking down on confusion. The nuts and bolts of this is it's aimed at investors acting as an advisor versus an investor. And that's where the problem is. Not buying at a discount and definitely not making money. And that 82% rule, well, it's not some arbitrary number. It's aimed at very specific distress seller situations. And more importantly, looking at those bad actors, not good investors doing the right thing. This bill still needs to be passed, vetted, and verified. But honestly, no matter what happens, the truth still remains. Do business with integrity. Tell the seller who you are and what you're doing. You need to make a profit. Don't pressure them. And more importantly, don't hide behind a contract. Have clear communication with the seller. And that is how business wins long term, regardless of regulations. Transparency always wins at the end of the day.

The Real Skills Behind Wholesaling

SPEAKER_03 6:37

Okay. I agree with his overall point there about transparency and authenticity winning, and that's how you should do business. Of course, I've said this numerous times. However, this regulation that is being proposed in Arizona is wild. And the 82% would be crippling to the investor marketplace in the state of Arizona. And so I really hope this doesn't go through because it to me is the most extreme regulation that's come out. It in comparison to the Oregons and the South Carolinas and the Nebraskas, those have been the ones to date that have been the most wild. This one right here, putting a specific percentage of what you can buy a property for, 82%, that really puts us in a hard place if the property is physically distressed and needs work. And so overall, I don't see how that's going to work out. I also think it's so extreme that there's no way in the world that it could get passed. Specifically for the people that are facing financial distress situations where their backs are up against the wall, there's a timeline issue, and they're mandating what they can and can't sell a property for. That's wild that the government would get involved on that level. And it really takes away the freedom of us being able to choose what we want and need to do with our own real estate. So I hope this regulation doesn't go down, especially like when you look at our original video on here, Ohio, that regulation, that to me is protecting sellers. This regulation is not about protecting sellers, it's about just taking away people's rights. And I don't think anybody wants that inside of regulations.

SPEAKER_00 8:23

I got a corporate job. On paper, I look like a complete success. Played Division I, got my degrees, find a corporate job. But in reality, I felt like I was stuck in the trap. Sitting in a cubicle every day, building somebody else's business instead of building something of my own. I realized this was one of the worst decisions I've ever made in my life. I didn't feel like I was fulfilled. I definitely didn't feel like I was free, and I knew I couldn't live like this long term. I had a decision to make. That's when I came across wholesaling real estate. At first, the concept sounded almost way too simple. Find a motivated seller, lock it up, and assign it to a cash buyer. To be honest, the simplicity is what pulled me into the business. But once I got started, reality hit me really fast. The idea was simple, but the execution was not easy.

End Buyers, Snaking, And Competition

SPEAKER_03 9:06

So I think a lot of people fall into this trap, right? One, you get that corporate job, you feel like that annual salary is going to be a number that will make you happy. And then you decide that, hey, I'm building somebody else's business. So I want to go build something for myself. And we start looking around and we come across things like wholesale and real estate. And what really stands out to me there is he talks about the simplicity of it. On paper and on these videos, it is simple. Find a property for a discount and sell it for more. But there are a lot of skill sets that are needed. And in fact, I think to a certain degree, wholesaling requires more skill sets than almost any other type of niche inside of real estate. Because you have to have lead generation. That can be a skill set in and of itself. How to negotiate and talk to sellers and lock up contracts, how to do the recon and the transaction coordination. And then, oh, by the way, building relationships with in buyers and finding in buyers. There's a lot of things that have to be navigated inside of wholesaling transactions. And so people get into it, and they're like, I was I was thinking this was going to be simple. I was thinking this was going to be easy. And it's not as simple. And it takes time. And I just did a video uh a few weeks ago about your first year in wholesaling real estate is basically unpaid internship. It's unpaid training because you're having to learn so many different skill sets that you've probably never had in your entire life. And so that's what leads to the high attrition rate of new wholesalers. Google, at the end of 2024, I did a video about this, about the attrition of new wholesalers. Google said 80% of new wholesalers quit in their first year. That's a wild statistic. And I think it's because there's not as many videos as this gentleman right here saying it is simple, but it's not as easy as I thought it was. I appreciate the fact that people were now starting to talk about this a lot more on social media.

SPEAKER_06 11:14

He's like, I'll make you a better offer because what they're gonna do, they're gonna lock this up and then they're gonna bring it to me. Right. And then you're gonna who knows when they're gonna close. So he was able to provide a stronger offer and then be substantially less where these wholesalers were gonna try and retrade it at. Right. And it's uh he immediately, I think, added probably 60, 70 grand margin by doing that.

SPEAKER_05 11:39

Right. And the seller made more money. Yeah. So, you know, wholesalers are worth their weight when they're doing a good job and they're he's like, I'll make you a better offer because what they're gonna do, they're gonna lock this up.

Wrap Up And Viewer Callout

SPEAKER_03 11:50

I hope that's an offer and not him trying to snake the deal from the wholesaler. Because if it was him snaking the deal, I mean, that's just that's weak. We just talked about that earlier this week of the sends up wholesale, and no one enjoys someone snaking a deal. But if it's an offer, well, in buyers absolutely have the ability and the right to come in and offer more. We know that as wholesalers, we know that we're competing with other in buyers. The the difference there is that we also know that in buyers, the flippers and landlords, well, they're busy also doing flipping and being a landlord, dealing with deferred maintenance and meeting contractors and dealing with inspection items and hiring realtors and open houses and all of the things that they have to do. That's also a part of their job. Whereas us as wholesalers, we are solely focused on the lead generation, the acquisitions, and the dispositions of our deals. And so, because of that, normally we have more opportunities to lock up deals. And so that's why flippers and landlords end up buying from us because they don't have the team set up to compete with us. Flippers are building a team of contractors and people that are dealing with their product, not trying to find more product. Whereas wholesalers are solely focused on just getting more product and more in buyers. And so, yeah, I mean, he's right. In buyers can always offer more than us, but very rarely is that the case. I mean, I've been wholesaling now for over a decade, and I will tell you, it is very, very rare where I come across either a lead that is being hammered by realtors or hammered by in buyers offering more. More often than not, it's they're being hammered by other wholesalers, and normally other wholesalers are the ones that are offering more because they suck at uh comping and underwriting. That's the more common occurrence. All right, guys, that's our episode of The King Closer Reacts. Let me know if you agree or disagree with my takes in the comments. Regardless, show me some love. I guess today was what, the regulation episode? We're gonna go with that. It was heavy on the regulation sides. Regardless, show me some love like today's video. We'll see you guys tomorrow.