Predatory Real Estate Wholesaler Prohibition Act – Oklahoma House Bill 3104 and What It Means to You

Steve Trang: Alright. So I'm gonna assume you guys can hear me. So, what I want to do obviously, we don't have our special our weekly episode. We took this week off for spring break, but I know that we wanted to there's, you know, some big changes last week or at least announced. So I wanted to talk about that, see how that applies to us.

Right? So, you guys saw me post last week about the bill number thirty one zero four, and, you know, there's some people that are concerned about it. I, when I posted about it last week, I actually got some put me on blast for, you know, posting something that's not a law yet, but I think it's really relevant. And so I wanted to talk about the law, the bill. Right?

It's not a law yet. And the first thing I wanna talk about is what they call the bill, which is the predatory real estate wholesaler prohibition act, which is a pretty ridiculous name. Right? It's a pretty, they're calling wholesalers vultures. Right?

That's basically what they're doing. They're out and right calling wholesalers, predator, predators. And so that's the first thing. So you kinda know where they stand on this, on this position. And so, basically, reading this, the way it'll it's been written, it sounds like, in my opinion clearly, this is very clearly, this is my opinion.

I'm not an attorney. Right? It sounds like this is written on behalf of, realtors. So, section eight five eight three zero one, it shall be unlawful for any person to act as a real estate licensee or to hold himself or herself out of such unless the person shall have been licensed to do so under the Oklahoma real estate license code. So, you know, if you if you read that, it basically says, you know, you can't act as a licensee.

And I can tell you, you know, even being a broker in Arizona, there's some confusion as to what it is exactly wholesalers do. So I had the board. So you guys know we have some big wholesalers in our office. Right? I own a brokerage, Sunny Homes Realty.

And just off the top of my head, you know, a lot of the agents are here. We got Brandon Daniels here, Jesse Burrell, and Evo with, Batch. Some of Jared Vidalas' people are licensed with us. Franco Milan and Chris Milan. So we got a lot of wholesalers licensed with us, and those are all the ones I could think of, Templeton Walker.

And and so with them all being licensed under, under Sunny Homes Realty, when an agent calls to complain about one of our wholesalers licensing the property, it's like, you know, your guy's acting like, an agent. And so I try to explain to them that they're not acting as agents. Right? They're marketing the right their property. They're just adding a fee on top of it.

And so there's some complaints about it. There's some confusion about it. So the fact that the real estate agent community and the license and and the MLS board can't understand the nuances or the difference between wholesaling a property and listing a property. You can see why, these, these representatives are confused as well. So somebody in the air trying to push them to make wholesale illegal.

So, there's a couple of things here. If you look at line 19 of page two of the bill, However, it shall be prohibited for any person, partnership, trust, association, or corporation, or the partners, officers, or employees of any partnership, trustees, or beneficiaries of any trust, association, or corporation to publicly market for sale any equitable interest in the contract for the purchase of real property between a property owner and a prospect prospective purchaser. So, basically, what we're saying here is they wanna make it so that we can't publicly market it. So the way I'm reading this contract and, again, I'm with some emphasis. I'm not an attorney.

Right? I'm just a real estate broker in Arizona. The way I'm reading this is that you can still privately market it. So, privately market, I would think, would be, you know, private Facebook group. You guys have probably not a marketplace.

You know, anybody anybody and everybody can go in there. Craigslist is definitely a public marketplace, but, you know, we've got our app offer fast. So, you know, hopefully, we'll be in Oklahoma soon. Email list, text blast. Right?

These are ways that you can market a home. You just can't publicly market it. So posting on Facebook, posting on Craigslist, on the public side of Facebook, and publics and publicizing Craigslist. That's all this reads to me. Now, the next thing here, it says apply to persons acting as attorney in fact.

This nothing in this section shall apply to persons acting as attorney in fact for the owner of any real estate authorization authorizing the final consummation by performance of any contract for sale, lease, or exchange of real estate. So, I don't know if you guys are familiar with novation agreements. Novation agreements are are are a newer thing. Not newer thing. I've heard people talk about it more recently.

And, basically, what novation means is you can actually take, you can instead of having, the buying contracts and then selling the rest of the contract as an assignment, you can actually have the homeowner sign you over as a power of attorney. And as a power of attorney, you can do whatever you want with the house. And so what happens with novation agreements is some people are actually, meeting with the homeowner, getting a price, getting a power of attorney, and getting a listing agreement. And they're basically just listing the house and keeping the difference. So it's a very, very complicated topic.

I'm just highlighting here very quickly, but nothing in this thing if if they're saying that you can't act as attorney, in fact, then getting a power of attorney, my understanding, tells me that that would be a workaround as well. So we've talked about two workarounds. A, you can't publicly market it, so you can privately market it still. And, b, you can also always get a novation agreement, which includes a power of attorney. And with that, you can actually get around this as well.

And then the rest is just, it's mostly probably do it right. Just, you know, attorneys are are exempt from this, property managers are exempt from this, anybody working with Easemus is exempt from this, anybody working with eminent domain is except from this, eminent domain is when the government takes your property. Anyone that's involved in apartment complex is exempt from this. What I thought was interesting was, section eight that says, nothing here shall apply to any person or entity managing a transient lodging facility, which, for the purpose of this paragraph, transient lodging lodging facility means a furnished room or furnished suite of rooms, which is rent to your personal daily basis, not as principal residence for a period less than thirty days, or basically, you know, VRBOs and Airbnbs. Right?

Airbnbs and VRBOs are pretty common. I can't imagine anyone having a lot of fun doing Airbnbs in Oklahoma, but that could just be biased. But that's kinda what I'm seeing here on section eight. And then section nine is, you know, people that are exempt from this are the affordable housing development, project as well. So I think the big thing here, you know, there's I think what's going on with wholesaling, obviously, a lot more prevalent.

You know? You guys got got Flipman has been talking about it for over a decade. You got Sean Terry. You got Max Maxwell. You got me.

You got a whole bunch of people talking about wholesale. Brent Daniels. A lot of guys talking about wholesaling. And so we're kinda creating this, I think there's a lot, a lot more people get into it, it seems like at least. And so there's more and more people doing it.

And with more and more people doing it, you know, there's there's the eighty twenty rule of every industry where the more people that are in it, the more people are gonna screw it up. Right? And I think that, you know, people are are hearing about it and and raising, or or causing situations. We have, you know, we have some crooks in town that are getting, memorandums recorded on properties today, on properties they have no intention of buying. You know?

These are gonna cause problems. You know, we've had, we've had some wholesalers in town actually talk with the attorney general about some of these guys that are scamming homeowners with these memorandums. So these are the kinds of, you know, behaviors that can cause problems. Now, with that being said, I've seen in our Facebook groups some people saying, good. I want us to make it I wanna make it harder for other wholesalers to get in.

And while I can understand that sentiment, I think we gotta be careful with that sentiment. You know? Like, hoping it would get harder for other people to get in, which is what kind of stuff like this will do. I'm not sure that's the best thing, you know, for new people. I think I always, you know, look forward to new competition.

And so I think we just gotta be careful with that, and I could see that a lot of people that were are newer are frustrated with the veterans, you know, basically, talking bad about the newer people. And then for us, as seasoned guys, there's really here nothing here that changes the way we even do business because we don't, we don't post it on our public Facebook page. We don't, I guess, we do post it on Instagram, so maybe that could be a challenge. Maybe we don't post on Instagram as much if this happens in Arizona. Being licensed won't help you at all, but you can still wholesale.

If you do it privately, you can still take it down and sell it. You can still flip it. Someone had posted that they're actually trying to change it so New York can't flip properties anymore. That'll be a very interesting, challenge. But overall, I'm not seeing anything here that will hurt anyone that's trying to wholesale right now.

You just can't post it on Facebook. You can't post it on Craigslist. So with that being said, please ask fire away guys if you guys have any questions. I'm not seeing any questions in here. This could be totally my my end.

I'm not seeing seeing anyone ask anything. So you guys have any questions, please please fire away. Let's see. Yeah. If you guys have questions, you know, please please ask because right now, you know, I'm doing this from from my office.

I'm not seeing any questions come through. Let's see. I apologize. Normally, I have Farai running everything. I'm trying to do this on my own, and it's all screwed up.

Oh, here you go. Shock riddles. Thank you. Alright. When you create a business around contract loophole, you must expect everyone to step in and make laws for stuff like this.

So, yeah, I think that anytime anything happens, where we can't kinda get creative, the government will step in and and try to reduce the loophole. But I I don't think we're doing anything innovative. Right? It seems innovative, but it's really not. You know?

Buying property, with a sign with the option to assign has been around forever. So I don't think it's new. I think it feels new to a lot of people because a lot of people haven't heard of it. But, you know, I got my real estate license in 2007. We were talking about it in 2007, and my dad used to drag me along in real estate seminars, and I hated them.

They were awful. They were talking about it then, so this isn't necessarily a new thing. Jeff Evans. I'm in Florida. It's pretty straightforward how you explain it.

Market the contract in private. Simple. Absolutely, Jeff. That's exactly what I'm saying. It's simple enough.

Dora, I completely agree with you. The issue is public marketing. So private Facebook groups, cash buyer lists, we should be fine. Absolutely. That's the way I'm reading this.

Hopefully, you know, if you guys are actually in Oklahoma, you know, running by an attorney, but outside of Oklahoma, that's just kinda how I'm seeing it. So if there's no questions about any of this, then, you know, I'm happy to answer questions. I I don't have anything for a while. If you guys have any questions at all about business, anything that's going on, challenges you guys are going through, I'm happy to, answer. I got I got some time to kill.

Durick says, yeah. Promise the host is I think the promise we have all these shady wholesalers tying up properties for weeks with no intention to even close, and that's exactly it. So, there's a guy in town, like I said, you know, one of the wholesalers actually brought, reported him to attorney general. And we got a nice text message the other day with some nice apologies. Like, man, I realized I screwed up.

But it's too late. He's blacklisted. We won't work with him. You know? My understanding is this guy was actually kicked out of his own company.

I mean, enemies he made. So I agree with you. Shady, shady dealings. So you're shortsighted, especially today with social media the way it is. Everyone knows everybody else just about.

It's a very, very small world. So, to be not on your best behavior, it will definitely impact your business, in the future. What's going on, Brian? So, if you guys want have any question about this, or anything else, happy to answer it. Otherwise, you know, we can end this right here.

Oh, and then we do have our workshop coming up April in Scottsdale, Arizona. We were able to get the hotel situation settled. It's gonna be at the Scott Resort. That's gonna be a lot of fun. Dory wants to know, can I give any advice about managing and training cold callers?

So we, it it's it's really simple. It's not easy, but it's really simple. You have to talk to your quote callers, twice a week at least. So Max and Avista's partner actually coaches their quote callers, and he listens to them. And so it's pretty boring, but that's what we have to do.

And one other thing I'll add as well is I'm not sure your experience level of experience, but in order for you to train your cold callers effectively, you have to be pretty good at cold calling. So I hope you got some experience Cold calling, that would definitely help. If not, you'll definitely want someone to train them properly. Any systems we have in place for weekly training and coaching. So, I have you know, we have our own coaching platform, right, which we we coach on sales, twice a week.

And, you know, we have our guys listen to those those calls as well. But as far as, you know, the systems we use for training is all the calls are recorded, and Max listened to them and he role plays with them. Chris John Matisse says you're putting properties in putting property in the contract with no intention of closing for the point of wholesalers to sign it. So where's that buffer? I don't understand that question, Chris.

Under caution, no attention to closing, but point of wholesaling. Well, with no intention of closing, meaning that, I am of the personal belief that if you're gonna talk to a homeowner and tell them you're gonna buy their house, if you can't wholesale it, you should buy it. That's my own personal belief. I understand that everyone runs their business this way. But, you know, when you're buying a house, you're buying it at a very steep discount because of certainty you're delivering.

You're offering them certainty, you know, that on this date, they're gonna get this amount of money. And so if someone contracts I'm not saying you specific. I'm saying other people. If you contract it with the intent of canceling after fourteen days or thirty days if you can't find a buyer, I think that's gonna put you in a bad spot. And I think that's the reason why laws like these are created.

So I think the, the right thing to do, again, my belief system, the right thing to do is if you're gonna contract the property, you should have the intent or the ability to close on it if you can't wholesale it. San Velasquez has the National Board of Realtors given any opinions on this matter, or are they included in this bill? They have not. As far as I can tell, limited limited information here. Have they given any opinions on this matter?

No. But I can tell you that for the most part, Realtors hate wholesalers. So I can see this causing a problem. So the way it reads, you know, is unlawful for any person to act as a real estate licensee. You know, should not market an equitable interest in a equitable interest in a contract.

The way I'm reading here, it sounds like, you know, realtors are unhappy with it. So oh, another thing I thought was interesting here is, the section eight fifty eight three zero one, unlawful for any person to act as a real estate licensee, it's already illegal. So unless maybe that's an Arizona thing only, but my understanding is that's a federal thing. You can't act as a real estate licensee because if you do behaving like a licensee can actually, cause you to go to jail. So I thought that was a federal thing.

Maybe it's an Arizona thing. So, but I thought that was another interesting caveat here. It should be unlawful to access a real estate licensee. George, LaFontaine, random question. What's the most valuable thing you've learned in the last month from peers?

You hang around some big players. Most valuable thing I've learned from my peers. I would say that we all have challenges. You know? We're all humans.

I have people walk up to me every once in a while, and they're, like, kinda, like, big eyed. You know, they think that I'm a celebrity or whatever, and, if they feel, intimidated. And I always tell them, like, I'm a human being just like you. Right? I've just been doing this for, almost fourteen years.

So, you know, even the guys that we work, that are are killing it or crushing it, they have bad days too. People quit on them. People lie to them. You know, family stuff, whatever. Like, none of us are are are untouchable.

None of us are better than anybody else. We've just had more success. So, I would say that's one of the big things that big takeaways from me recently is that everyone's going through crap even if it doesn't look like it. Chris, understood. I'm starting out trying to get my first deal with very little money, then it's a gamble I'm taking with all well, I'll have to start somewhere.

Appreciate the wisdom. So, Chris, absolutely, we all have to start somewhere. And what we tell people in the beginning is you don't necessarily need to build a buyers list if you buy it deep enough. So you are in a little bit of a conundrum. If you don't mind, Chris, what market are you in?

You can share that. Jeff says I'm two weeks into cold calling with two VAs now. I have them pitch the fast cash offer creative terms, or my girl will help list it, which is smart. I've ended the conversations based off what Max Pace, Chris, Jay, and you teach plus what they're hearing daily. I do this five or six months to evaluate, then evaluate, then thanks for all the content.

I think that's smart. Do you have experience cold calling? Great. If you don't, I might you might wanna jump in there with them so that you can, get the objections real time. Right?

Really know how it's going. We don't pitch a fast cash offer. In fact, we pitch we we pitch the opposite. We never talk about a fast cash offer. Because if we pitch a fast cash offer, the next question is, well, what's your offer?

And that's a question that's really hard to get out of. You can try to get around it, but you're gonna have some stubborn people like, no. What's your offer? No. What's your offer?

Right? So we never offer a fast cash offer. Our script is a little bit different. Sam says, when building your company, you get to a point where you consider partnership. What things in your business make you consider partnership will will work, and how do the partnership look like in the beginning?

So, if you haven't heard me say this before, I'm absolutely against partnerships. I think partnerships are really bad. At the same time, I am a hypocrite because Max is my business partner. So the only reason why I partnered with Max is because there was such massive synergy where I knew a lot of times people look at partnerships and they think of one plus one is two or sometimes even one plus one is I have to do less work. What you really need to look at, if you're gonna do a partnership, it's gotta be synergy where one plus one is three or one plus one is five.

That's what we have. And so with that said, what I'm looking for a partner is someone that complements me really well. But I was in the very beginning until you've got business, experience, you won't know what you do well and you won't know what you need. So you won't be able to have that criteria figuring out what you need in a partner. So my advice in the very beginning is don't partner.

Grind it out. You know, eat crap for a while. It's gonna suck, but then you'll know what you need a partner should you decide to go that route. Joshua Paul last year. Illinois last year.

Oklahoma last week. Do you think this will spread quickly nationwide? It's possible. You know? I think that it's getting more and more prevalent.

I think that if we can, as an industry, not necessarily union not unionize, but come together. Like, National Association of Realtors, people don't know this. Right? So you got National Association of Realtors, which I'm a proud member of, is the number two lobbying organization in the country. Right?

Their only lobbying organization bigger than National Association of Realtors is the National Rifle Association. So it's a very big, lobby, and and so they kinda push their weight around. So with that being said, I'm not suggesting the wholesalers come together as far as forming an entity, but I think we could raise the bar and call out other people that are behaving poorly. You know? There's people coaching some things that I wouldn't necessarily agree with.

And so if you're seeing that, you know, call them out, raise the bar. You know? We kinda have a little bit, of a, tight click at the moment. And I know click has a positive and negative connotation, in Phoenix, but, you know, we've got the Phoenix crew. And there's there's you know, there were some people misbehaving, and their pocketbooks got hurt.

Right? Because if, you screw one person, you're screwing, we all talk to each other. We all know who's who's messing around, who's doing stuff that they shouldn't be doing. So very quickly, none of us are doing business with that person. And we're not you know, Max Cash offers, me and Max, we're not the biggest.

We're not even close to being the biggest. But if you combine us, Keeley, Pace, the batch guys, Brent Daniels, Rafael Cortez. We're not, Jared Verdales. Like, we're not 20% of the market, but it's you can feel it. You know?

So what I would say is if you guys can, as a group, raise the bar, call out each other for for for doing, dirty deeds, I think that will hopefully reduce how quickly the spreads nationwide. Chris, New York. So, man, I would not want to be in New York because New York is where I was reading where they're they're trying to make it illegal to flip houses in New York. I'm not saying it's gonna happen, but the fact that they're even talking about making flipping illegal in New York is just bonkers. I think that state, it appears on the outside full of crazy people.

I don't know. That could be really harsh. Jersey is great. I know some people that are having some, great luck in Jersey. I know some people that are having challenges in Jersey.

But if you can move out to to Jersey, Philly, other parts of Pennsylvania, I think that's a great idea. Louis, thanks for the video. Newbie in Dallas. Just close my first deal. Congratulations.

So that's awesome. It's possible, you know, if it's gonna come to Texas. Oklahoma is just right above it. It has a lot more wholesaling going on in Texas and Oklahoma. Grace Joe says partnerships are like marriages, so you should really know what you're getting into.

JV per transaction is fine. I agree with that last part, for sure. You know, you can JV you can have a group of people hanging out together doing working these deals together and then, you know, JV it to one another. I think that's totally fine. Right?

Like, you've got a virus list. You you know, I don't have this in my virus list. In fact, if you look at Keeley, right, it's got, Josiah, Hunter, and Jamil. Before they all parted up together, Hunter Runyon and Josiah Grimes, they were they were both, they were JVing all sorts of deals. Right?

Like, if Hunter's Hunter's got a deal, he can't sell it, Josiah's selling it. Likewise, Josiah couldn't sell it, Hunter would sell it. So they were both JVing a lot before they all partnered up. So I think that's a great way to, you know, maybe quote, unquote date. I don't know.

But, yes, absolutely. And partnerships are like marriages for sure. So anything else, guys? Any other questions? Happy to answer them.

Still got a few more minutes before I gotta take off. So then, yeah, with that said, you know, kinda made a joke about Oklahoma. I apologize but I I don't know why anyone would want a Airbnb there and then saying New York's kinda crazy. I do kinda mean that one. So apologize, Chris, if that's offensive.

But lots of crazy ideas originate in New York. So alright. So appreciate you guys. Thanks for hopping on. I know this is totally impromptu, so we still have 40 people coming on.

I appreciate you guys. And, next week, we got, Casey Ryan coming in from Vegas talking about how to run a profitable wholesaling business because it's it's nice to make a lot of money. It's a lot more fun to keep it. So I'll see you guys all next week.