Looking For The Legal Flip In Illinois!!!!!!!!!!
After reading several posts that outline "flipping as not so legal according to Illinois law, I must ask "what is the common solution," or is it that Illinoisian invsetors only engage in other types of creative real estate investing?
If, you have a tried and true solution please let us know. 
Hello-
Contract Assignments are a solution. Flipping is not impossible, just not that easy. Find lenders that will loan on unseasoned properties. They are out there.
good luck,
joe
Tanis,
Thanks for the reply,
My questionis is not so much the how to flip, but is it legal in Illinois. Meaning is assigning contracts for a fee considered in Illinois "Brokering" without a license?
It seems that essentially when you find a property seller and then locate a buyer and steer him to the deal, that you are in essence "brokering".
If you or anyone has answers, please let me know.
No, assigning a contract for a fee is NOT illegal in Illinois. When you sign a real estate contract, it creates an equitable interest in the property for you, and you have a right to do as you please with it. What is illegal is you finding a motivated seller, pairing them up with a buyer, and collecting a fee for that. In order for flipping to be legal, your name has to pass through legal docs, and it is done via contract assignment.
Hope it helps.
Hello ladyb,
In essence, you are right, but then not so. As Private Investors, and not being licensed, we are not held to the rules of the licensed Brokers. But, we are still governed by the laws of the state. We have more room to move as Private investors, but we still need to be sure we are within the guidelines laid out by the state. Terminology can get confusing and interesting at the same time. I hope that helps. Let me know.
Quote:
On 2004-01-04 17:35, ladyb wrote:
Tanis,
Thanks for the reply,
My questionis is not so much the how to flip, but is it legal in Illinois. Meaning is assigning contracts for a fee considered in Illinois "Brokering" without a license?
It seems that essentially when you find a property seller and then locate a buyer and steer him to the deal, that you are in essence "brokering".
If you or anyone has answers, please let me know.
Compwhiz and Pejames,
Thank you. I asked a Realtor once if I could refer him a buyer and he said he couldn't pay me, so I suppose this goes along with what Compwhiz stated about equitable interest in the title and the need for "your name" to be inlcuded in the paper trail. Also Pejames i appreciate your experienced wisdom.
I originally ask this question after reading a post on TCI and all of the experienced investors agreed that this wasn't legal in Illinois and a "trust" should be used to avoid the . (Don't remember which post)
Of course as I should anyway, I'll be visiting the State's Info center, further researching this topic as it pertains to Illinois.
If there is more insight available on TCI , would certainly like to know.
Thanks all.
As long as you have an ownership interest in the property you can wholesale (flip) it. An ownership interest can be an option, a purchase agreement, the deed, etc.
I am in IL and I have flipped properties. It is not illegal. Got to go, the warden says it's time for lunch!
What is this about flipping illegal in IL? Never heard of this before, can you elaborate?
snek11,
It's not illegal as long as you maintain the documentaion properly. Check out the other posts in the archives too. Hop ethis helps..
If you have equitable title in a property via any one of a number of means you have the right (even in IL) to among other things sell the property without a R.E. license. Some states limit the number of properties which you may sell in a given year (not IL0 without getting a R.E. License.
The agent ,who you offered to refer someone, correctly stated that she could not pay you a referral fee because that fee can only be shared with other licensed R.E. agents. HOWEVER, that doesn't mean she can't recognize your kind deed by pulling some comparable sales, by running down listings (withdrawn,expired,new,etc.etc.) sort of on a Quid Pro Quo basis.
Quote:
On 2004-01-08 12:01, sammyvegas wrote:
If you have equitable title in a property via any one of a number of means you have the right (even in IL) to among other things sell the property without a R.E. license. Some states limit the number of properties which you may sell in a given year (not IL0 without getting a R.E. License.
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You gentlemen have provided some wonderful insight into this topic, for which I am much appreciative.
I found this Illinois State Statute which, pretty much supports what you all have stated:
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16. May compensation be paid to a principal to a transaction, even if the principal does not have a real estate license?
Yes. Section 10-15(c) of the Act authorizes the offer or payment of compensation (“prizes, merchandise, services, rebates, discounts or other consideration”) to an unlicensed person who is a party to a contract or lease. Of course, such compensation is not required. The payment of such compensation should be pursuant to the negotiations on the transactions. The payment of such compensation is not limited to payment by a licensee to the licensee’s client - in other words, a seller’s agent may pay compensation to an unlicensed buyer.
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The agent ,who you offered to refer someone, correctly stated that she could not pay you a referral fee because that fee can only be shared with other licensed R.E. agents. HOWEVER, that doesn't mean she can't recognize your kind deed by pulling some comparable sales, by running down listings (withdrawn,expired,new,etc.etc.) sort of on a Quid Pro Quo basis.
Also, Sammy you are very correct about the alternatives for a Realtor in one's investment strategy. Recently I called a "WE BUY HOUSES " TEL #, and guess who's company was associated with this #? The very same agent. So now I'm sure he's in the creative real estate business.
As investors we should never over look potential resources.
Great reminder!
Happy investing to all.[ Edited by ladyb on Date 01/09/2004 ]
I would still use the Land Trust if in IL.
Heck I think that almost everything in Chicago is owned in a Trust so you don't have a whole lot of explaining to do. Not very often anyway.
Quote:
On 2004-01-09 06:46, thomasgsweat wrote:
I would still use the Land Trust if in IL.
Heck I think that almost everything in Chicago is owned in a Trust so you don't have a whole lot of explaining to do. Not very often anyway.
Would you or any one else mind elaborating on the benefits of the Trust versus contract assignment as it relates to Illinois?