How Do I Comply With The Dodd-Frank Act?
You don’t have to be afraid of the Dodd-Frank Act. You just need to make sure you comply with the regulations.
Watch this video to know my thoughts on protecting yourself and staying within the spirit of the law.
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Read Transcript for “How Do I Comply With The Dodd-Frank Act?”
“Thanks for all your great information. What do I need to do to comply with the Dodd-Frank Act if I’m buying properties cheap and reselling with seller financing to an end buyer who wants to live in the home?” – Sherri Om, Norwalk, California
Joe: Well, first of all, you don’t have to buy properties cheap in order to resell them. You can buy them at full market value. If you get them on terms, you can actually sell them for a premium and take the amount that you sell it over market value as your profit, so you don’t really need to worry about that.
Joe: As far as the Dodd-Frank Act goes, if you type in Dodd slash Frank into my blog, there’s an article that I did on it, so I’m not going to go into a lot of detail about it. One thing we know about Dodd-Frank is that it’s mainly focused on securities, so they’re interested in people that are using private money and whether or not those people need security licenses and those types of things rather than the type of seller financing that we do.
Joe: Essentially, all we’re doing is facilitating a sale. We’re taking control of the property, turning around and selling it and we’re doing proper disclosures – we’re doing all of the things that the Dodd-Frank is designed to force companies to do. So we’re already doing those things. We do it ethically. We make sure that people understand what’s going on, so we don’t really have to worry about Dodd-Frank so much.
Joe: Also, Dodd-Frank is many hundreds of pages long and most of the things in it have never been contested in court, so we don’t know how some of that stuff is going to play out over the next few years, so we’ll just continue to watch that over the next few years and see if it has an impact on investors like us.
Joe: There was an awful lot of fear in the investor community about Dodd-Frank. As I’ve said from the very beginning, with most of these things, we’ve had to make a tweak or two to make it work, but if you’re doing it ethically and you’re doing the paperwork properly in the first place, then these things are already going to be complied with and you’re not going to have to worry about them so much.
Joe: If you’re raising private money, that’s a different story. Then you might need to get a securities license to make that work. Read my article on the blog: JoeCrumpBlog.com about Dodd-Frank and I think it’ll give you a better understanding of what we’re doing with that and how we’re complying with it and what you’ll need to do with it as well. Alright, I hope that helps.
Joe: And before I end, the bottom line on this is don’t worry so much about regulation – I’m not saying don’t comply – I’m saying don’t worry about it – we’ve always found a way to make these things work and we’ve always found a way to continue to do business. Remember, we’re still working in a free market economy. They’re not trying to keep us from doing business – they’re just wanting to make sure that the business that we do is done properly, that it’s done ethically, that it’s done responsibly and to make sure that everybody understands what’s going on in a deal.
Joe: The reason that these regulations come into being is not so that they can chop off the head of capitalism – the reason is because they want to keep people from abusing their power and their knowledge over other people, and so if your treat this business responsibly, if you treat it ethically, and if you do disclose the stuff that you’re doing and make sure that everybody understands what their risks are and what their benefits are when they’re going into a deal, you won’t have to worry about very many of these things. Alright, I hope that helps.