How To Wholesale Real Estate In South Carolina: Step By Step (2023)

South Carolina holds the distinction of being one of the original 13 colonies.

The Palmetto State is located in the southeastern part of the United States and is bordered by Georgia, North Carolina, and the coast of the Atlantic Ocean. In 2021, it was home to more than 5.19 million people.

The capital of South Carolina is Columbia, although its largest city is Charleston. South Carolina’s other large cities include Mount Pleasant, Greenville, Rock Hill, and Summerville.

The state is geographically diverse, which offers great real estate opportunities. There is the South Carolina coast with remarkable luxury properties and tourist destinations, the Piedmont plain, and the Blue Ridge Mountains.

Much of the real estate in South Carolina is considered affordable, with the average home price in the state at $301,659 (as of 02/02/23). Note that this represents a 17% increase in value year over year.

South Carolina’s average home price is also more than 1/3 less than the median sales price in the U.S. (Q4 2022) – according to the Federal Reserve’s Economic Data (FRED).

In this exclusive guide, we’re going to cover how to wholesale real estate in South Carolina. You’ll learn the steps to take action on one of the best opportunities to create your own real estate investing business today.

• What Is Wholesaling Real Estate?
• How To Wholesale Real Estate In South Carolina (9 Steps)
• Is Wholesaling Real Estate Legal In South Carolina?
• How Much Do Real Estate Wholesalers Make In South Carolina?
• Do You Need A License To Wholesale Real Estate In South Carolina?
• Is Wholesaling In South Carolina Easy?
• Final Thoughts On Wholesaling In South Carolina

What Is Wholesaling Real Estate?

Wholesaling, with all its recent press and hype, is not a new strategy for real estate investors. Wholesale real estate refers to a short-term strategy or investment technique in which an individual or business entity enters into a contract to purchase a home.

A wholesaler, using an Assignment of Contract, can assign their equitable interest awarded by the Doctrine of Equitable Conversion – a legal concept that is triggered when the contract is fully executed.

The wholesaler’s goal, before taking title to the property, is to assign their equitable rights – using an Assignment of Contract to another interested buyer. Included in this assignment would be the wholesaler's agreed-upon fee.

How To Wholesale Real Estate In South Carolina (9 Steps)

While there are numerous ways to go about wholesaling, here’s our nine-step process to wholesale real estate in South Carolina. Be sure to check out our in-depth video showing you how to wholesale real estate step by step here:

With that in mind, here's our simple step by step process for wholesaling real estate in South Carolina:

1. Partner With A Wholesale Mentor
2. Learn South Carolina Real Estate Wholesaling Laws & Contracts
3. Understand The South Carolina Real Estate Market & Lingo
4. Build A Cash Buyers List
5. Find Motivated Sellers & Distressed Properties
6. Put Distressed Properties Under Contract
7. Assign The Contract To Cash Buyer
8. Close Deal And Collect Assignment Fee
9. Double Close Or Wholetail When Necessary

1. Partner With A Wholesale Mentor

A mentor guides and influences those who are new to real estate wholesaling. Wholesale real estate mentors offer valuable learn investment insights and lessons. A mentor is a smart way to help you avoid or minimize making the same mistakes the mentor made.

Most experienced real estate investors know, in hindsight, choosing to be mentored at the beginning of their career is a wise career decision. The problem is that first-time wholesalers do not know what they do not know. In other words, new wholesalers do NOT have the experience or understanding to know how important a mentor can be when first starting out. 

2. Learn South Carolina Real Estate Wholesaling Laws & Contracts

Understanding the rules that govern real estate activities, licensees, and related professions is the key to operating within South Carolina’s legal limits. Lawmakers in the state define real estate, for the purposes of licensing to be (§ 40-57-30 Definitions) -

The South Carolina Real Estate Commission (SCREC) is the state agency responsible for regulating the following –

• Real Estate Brokers & Each Brokerage
• Salespersons
• Property Managers
• The Registration of Timeshare Projects
• Out-of-State Land that is Actively Marketed to South Carolina consumers and residents.

Pursuant to South Carolina Code Ann. § 40-57-30(3), these are the various licensee classifications for South Carolina real estate licensees –

A "Broker" is defined as -

A South Carolina Broker may be considered a Broker-in-Charge -

Salespeople are known as “Associated Licensees” in South Carolina law -

Recent Legal Developments Regard Real Estate Wholesaling In South Carolina

In the state of South Carolina, real estate wholesaling advertising has been under the oversight agency’s microscope. 

At recent SCREC meetings, there have been numerous discussions regarding the growing real estate wholesaling trend – the marketing of equitable interest through contract assignments by a buyer who has signed an executed purchase agreement.  A wholesaler is awarded equitable interest through the Doctrine of Equitable Conversion – a legal concept triggered when a seller and buyer execute a real estate contract. While equitable ownership belongs to the buyer, the legal ownership remains with the seller (or homeowner) until the title passes at a closing.

The South Carolina Real Estate Commission issued an interpretation of the state code as follows “…advertising of real property belonging to another with the expectation of compensation falls under the statutory definition of ‘broker’ as noted in S.C. Code Ann. § 40-57-30(3).“

South Carolina Real Estate Wholesalers Should Avoid Publicly Advertising The Subject Property

The South Carolina Real Estate Commission details in a recent official notice that any unlicensed individual publicly advertising real property equitable interest – with an expectation of being compensated may find they are on the receiving end of a SCREC-requested Cease and Desist Order.

This order has the potential to prevent wholesalers from practicing as unlicensed real estate persons. To comply with South Carolina law, only the following may legally publicly advertise a property for sale -

• The legal owner of the subject property.
• A licensed representative who has a signed Listing Agreement with the person who holds a legal interest in the subject property.

Wholesalers can manage a real estate transaction without violating South Carolina law simply by avoiding any public advertisement. When managed appropriately, real estate wholesalers can work legally in South Carolina.

Is South Carolina An Attorney Close State?

South Carolina law considers the management or administration of a real estate closing as the practice of law. As such, closing in this state must be managed and supervised by a licensed South Carolina lawyer.

South Carolina Real Estate License Reciprocity

South Carolina licensees may be able to obtain a real estate license in other states if their experience and education meet the South Carolina Real Estate Commission’s requirements.

Residents who hold sales licenses from other jurisdictions and are South Carolina residents for a minimum of six months will have to take 30 hours of education (which is half of the required education), and brokers are required to complete 60 hours.

Note, however, that the South Carolina Real Estate Commission offers full license reciprocity for Georgia residents who have obtained and hold a valid, active Georgia real estate license.

3. Understand The South Carolina Real Estate Market & Lingo

South Carolina’s real estate business market offers diverse investment opportunities. Once you begin to have a better understanding of how the South Carolina laws work, the next step is to educate yourself regarding the state’s real estate nuances and lingo.

The South Carolina REALTORS is the state’s largest professional trade organization. South Carolina’s real estate industry maintains 15 local associations.  As of May 2022, The South Carolina REALTORS association has a membership that exceeds 60,000, including active and inactive brokers, salespeople, and property managers.

4. Build A Cash Buyers List

One of the most important aspects of wholesaling houses or real estate is having a viable list of cash buyers. There are traditional and newfangled ways to begin creating a buyers list. And note, in the real estate wholesale business, the buyer is usually a professional who specializes in flipping houses and plans to renovate and update the subject property. A wholesaler’s buyer’s goal is to sell or rent the updated and repaired property to a retail customer, not another real estate professional.

Consider these strategies when starting (and maintaining) your cash buyers list –

• Social media options like Craigslist or Facebook
• Strategically located Bandit Signs
• REIA meetings and/or podcasts
• Real estate meetups
• Check with property managers or local real estate lawyers.

In addition, in the digital age, it is imperative to have a website as this allows for advertising your experience while building creditability.

You can also check out this video on how to find cash buyers!

5. Find Motivated Sellers & Distressed Properties

Real estate wholesalers look for distressed properties. These tend to be selling lower than their true market value. Motivated sellers who are willing to let their property go for less than its market value (which can be an owner-occupied unit or rental property) are generally highly motivated by one many potential reasons –

• Financial pressures are brought on by many different causes, like medical emergencies.
• An inherited property that is in disrepair and in need of updating and TLC.
• Other personal reasons that are unrelated to finances or the property’s condition, to name a few.

Wholesalers should look for both on and off-market properties. For example, consider researching expired listings (from MLS) to get a feel for what is selling and the strength of the overall marketplace.

Online websites like Redfin, Zillow, and Realtor, along with paid software like PropStream and Privy, have tremendous amounts of information available to any investor who is willing to do the work and research. 

And remember to consider using more traditional (and less digital) methods. Many wholesalers have made a career using properties found on REO (Real Estate Owned) lists or a lending institution’s foreclosure list.

Read Also: Finding Motivated Seller Leads: Free & Paid Tactics

6. Put Distressed Properties Under Contract

The bare basics of the wholesale real estate business are that it is a short-term investment strategy. And, like all investments, there are metrics that should be employed to determine the quality of a potential investment. This analysis should be done BEFORE executing a legally enforceable real estate contract.

Real estate investors – like wholesalers and flippers, often apply two systems of measurement to determine the investment quality of a property.

• The Pay No More Than 70% of the ARV (70% Rule) – the ARV refers to the After Repair Value, which is an estimate of the market value after it undergoes planned updates. The ARV is an important component in determining the valuation of a potential investment.
• The Maximum Allowable Offer (MAO) – the maximum allowable offer is what a wholesaler can expect from a typical cash buyer. The MAO reflects costs and repair expenses required to renovate a property to a turnkey status. If there are repairs required, the MAO will always be less than the projected After Repair Value.

The following example should help clarify how to apply these real estate metrics -

Here is an example -

A wholesaler is presented with a rental property that could be bought for a price of $200,000. The wholesaler recognizes that the sales price is below market value. A cursory review by the wholesaler estimates that the cost to renovate the property would be about $50,000.

The wholesaler anticipates this property’s After Repair Value to be $400,000.

Given the above transactional facts, how would a South Carolina investor analyze this particular transaction?

First, the real estate wholesaler must determine the property’s Maximum Allowable Offer – or the highest price a wholesale buyer would be willing to pay. This is calculated below.

Begin by calculating 70% of the After Repair Value.

$400,000 * .7 = $280,000

Next, calculate the Maximum Allowable Offer. This is done by subtracting the expected expenses of $50,000 from $280,000. The Maximum Allowable Offer for the above-noted transaction would be $230,000.  [$280,000 - $50,000].

As a result, a real estate wholesaler with this South Carolina transaction could expect to earn upwards of $30,000. [$230,000 (MAO) - $200,000 (the wholesaler’s original purchase price)]

Read Also: Estimating Rehab Costs: (Ultimate) Investor's Guide

7. Assign The Contract To Cash Buyer

A real estate wholesaler in South Carolina has the option of assigning the contract to a new cash buyer; before the first contract even reaches the closing table. Most South Carolina wholesalers prefer to assign their equitable rights to their alternate buyer before the first closing because it is the most cost-effective closing strategy.

A wholesaler would use an Assignment of Contract similar to the one shown below -

Source

Download Free Wholesale Real Estate Contracts Here (PDF)

A Word Of Caution…

Remember, recent SCREC meetings resulted in the commission issuing a written interpretation that does not allow wholesalers to publicly advertise the subject property if they issue an assignment of contract in which they profit.

However, the above-noted interpretation has no bearing on a wholesale transaction where the public advertisement has not been used to complete any of these wholesale real estate deals and transactions.

8. Close Deal And Collect Assignment Fee

If you choose the assignment contract route, the end buyer (the assignee in the Assignment of Contract) will close the original purchase contract (with the seller) according to the terms of the wholesale contracts. Once the deal is sealed, you can collect your assignment fee from the end buyer as detailed in your agreement.

9. Double Close Or Wholetail When Necessary

There are times during South Carolina wholesale deals when you may decide to perform a Double Closing as your exit strategy. In this wholesale method, the wholesaler closes the first deal (where they are the buyer) and actually becomes the property’s legal owner – if only temporarily.

The second closing is when the wholesaler becomes the seller, and their alternate buyer takes the title as the legal owner of the property. The difference in the two sales prices would be considered the wholesaler’s gross profit.

For some real estate investors, the Double Close exit strategy is often preferred because a wholesaler, when selling as a legal owner, meets the defined license exemption. In addition, this method allows the wholesaler to avoid disclosing their profit upfront to either the original seller or the new buyer.

But note that the Double Closing exit strategy typically requires the wholesaler to have the capital required to fund the first property and pay two sets of closing costs (including title insurance, state stamp tax, etc.), even if they take title only temporarily. For those who need to borrow this capital, there are hard money lenders and transactional funding providers with programs to meet this need.

Wholetailing is also another wholesaling method which is a combination of a fix and flip and a standard wholesale deal.

Wholetailing is often a desirable exit strategy because you can access a larger pool of buyers that generally use financing and who are less sensitive to pricing as compared to cash buyers. When using this strategy you’ll take ownership of the property, do some light repairs, and then re-list the property shortly thereafter on the market.

Is Wholesaling Real Estate Legal In South Carolina?

Yes. Real estate wholesaling in the Palmetto State is legal if South Carolina wholesalers operate within the state’s real estate license laws.

But remember, while it is legal to wholesale in South Carolina, recent developments in the state require wholesalers to avoid publicly advertising any property for which they have no legal interest or a license to represent someone who does.

This order has the potential to prevent wholesalers from participating in the practice as unlicensed real estate individuals. To comply with South Carolina law, only the following may legally publicly advertise a property for sale -

• The legal owner of the subject property.
• A licensed representative who has a signed Listing Agreement with the person who holds a legal interest in the subject property.

How Much Do Real Estate Wholesalers Make In South Carolina?

Wholesalers are real estate professionals who operate similarly to real estate brokers and salespeople in that they are not salaried, with a set forty-hour work week scheduled. One of the benefits of this type of work is the potential for earnings in a wholesaling career has no limit, and you can use an owner-occupied or investment property to meet your objectives.

And while these careers are not exactly the same, according to the statisticians working for the Bureau of Labor Statistics, the median salary for real estate brokers & real estate agents on a national basis was $48,770/year, which translates to $23.45/hour. The following data represent the number and median salary for South Carolina’s real estate brokers and sales agents (41-9021 & 41-9022) - 

Do You Need A License To Wholesale Real Estate In South Carolina?

No. Real estate wholesalers can operate legally in South Carolina if they remain within the state’s defined legal limits.

However, given the recent developments and focus on wholesaling by the SCREC, South Carolina wholesalers should stay current with relevant laws and regulations and avoid even the appearance of impropriety by –

• Acting with integrity.
• Managing the seller’s and cash buyer’s expectations.
• Being transparent for each party to the transaction.

Is Wholesaling In South Carolina Easy?

Wholesaling provides real estate investors a viable entrance ramp into what is often an untouchable marketplace by only requiring minimal capital. Most importantly, wholesale real estate is a short-term strategy that reduces risk by shortening the time you hold the investment. 

While some hot-shot entrepreneurial types may want to go it alone, many real estate wholesalers seek guidance from more experienced South Carolina investment professionals. These seasoned wholesaling veterans can help new wholesalers avoid avoidable rookie mistakes. Professional investors offer affordable and easy access to mentorship and wholesale courses that are available online.

The best-in-class program for wholesaling real estate nationwide is the Pro Wholesaler VIP Program by Real Estate Skills. It’s designed for the modern entrepreneur who is looking to implement the most effective real estate strategies working today, along with joining a community of hundreds of active wholesalers and mentors.

Final Thoughts On Wholesaling In South Carolina

Real estate investing, like all investments, is defined by risk or uncertainty. Yet, it is this risk (offered by many different types of real estate) that creates the potential for unlimited income for those willing to manage the risk.

Fortunately, there are proven investment principles and criteria upon which to base an investment decision. And for many, real estate wholesaling as a career offers a chance to meld their sales skills with savvy investment knowledge.

And in doing so, they create limitless potential – if they remain within the rules, regulations, and laws set forth by South Carolina legislators. Check out our brand new free training on how we help investors all across the country wholesale and flip houses from the MLS using only a laptop and a cell phone.