How to Wholesale Real Estate in Alabama (2024 Updated)

In this article, we’ll explain everything you should know about wholesaling houses in Alabama.

Learn how to find Alabama properties to wholesale, what contracts to use, and which marketing strategies work best.

We’ve put together tons of invaluable resources to get you started wholesaling houses as soon as possible. Read on to learn more.

If you’re new to the world of real estate investment, you’re probably wondering, “Is it legal to wholesale real estate in Alabama?”

It’s an essential question to ask, and the answer is yes! Wholesaling houses is completely legal in the United States if you understand and follow the laws.

The Alabama Real Estate Commission, or AREC, regulates Alabama real estate wholesaling laws.

Knowing the AREC regulations is a must, but you should also understand the risks of wholesaling real estate.

While you don’t need a real estate license as a wholesaler, your right to wholesale real estate comes with certain limitations.

The most considerable risk you’ll face comes from not understanding those limitations and using incorrect wording when marketing properties.

The only two parties that can sell a house are licensed Alabama real estate agents and homeowners.

Wholesalers can’t market a property, but they can market the contract to that property.

As a real estate wholesaler, you’ll create a contract with a motivated seller and then market the rights to that contract to an end buyer.

To better understand Alabama wholesale real estate laws, study the rules and regulations of the Alabama Real Estate Commission before creating your contracts.

Once you understand the regulations, get one of the best Alabama real estate attorneys to review your contracts or draft purchase agreement templates for you.

Alabama has two different methods for wholesaling real estate:

1. Contract assignment
2. Double closing

As in other states, you can complete the real estate wholesaling process entirely remotely.

There’s no need to live in Alabama to wholesale property in the state. Use your computer to wholesale houses in Alabama virtually without ever leaving your home.

Contract Assignment

The contract assignment method is the first strategy real estate investors familiarize themselves with when learning how to wholesale houses in Alabama.

This straightforward method requires three parties:

1. The wholesaler
2. The motivated seller
3. The end buyer or investor

To start the process, you need to find a motivated seller and get their house under contract. Although you’ll sign the contract as if you’re buying the property, you won’t actually be buying it.

A clause in the contract allows you to assign the agreement to your end buyer.

Once you have an end buyer, the seller and the end buyer sign a prepared assignment contract.

The contract allows you to transfer purchase rights to the end buyer so that they will legally be the one buying the house.

After having the contract assigned, the investor will pay you the assignment fee. The assignment fee is how you’ll make a profit as a real estate wholesaler.

The contract assignment method is popular because it allows you to make a profit from wholesaling even if you don’t have the money to purchase the property.

In most cases, you need a refundable earnest money deposit of about one or two thousand dollars to wholesale via the contract assignment strategy.

Double Closing

While many prefer the contract assignment strategy, learning everything you need to know about wholesaling real estate means mastering both methods.

Double closing is the preferred method for wholesalers who make a lot of money from their assignment fees.

These wholesalers prefer that the seller and end buyer don’t see how much profit they’re making, so they use the double closing method to retain confidentiality.

As the name suggests, the double closing method is when the wholesaler completes one closing for the seller and a separate closing for the end buyer.

Just as there are pros and cons of real estate wholesaling, this specific strategy has its pros and cons too.

The main benefit of the double closing method is that you can keep your profit margin private from both parties.

The drawback to this strategy is that, unless you have enough cash, you need to obtain transactional funding to close with the seller.

You can use your own money or get transactional funding from one of the best Alabama hard money lenders.

Finding a wholesale-friendly title company should be high on your real estate wholesaling checklist if you choose to go the double closing route.

A reliable wholesale-savvy title company will know the ins and outs of double closing and can help you successfully close on properties across Alabama.

Virtual Wholesaling

As long as you understand wholesaling real estate step-by-step, virtual wholesaling in Alabama is possible no matter where you live.

Learn everything there is to know about how to wholesale houses in Alabama and build up a good network of professionals before starting the process.

First, find a home inspector in Alabama who can help analyze real estate deals and provide you with estimated rehab costs for your current properties.

Whether you work with an inspector or without one, you should include an inspection contingency clause in your contract.

This clause ensures a contractor can enter your properties and provide accurate estimates.

Second, connect with an Alabama wholesale friendly title company that can assist you with remote closings.

Working with Alabama investor friendly real estate agents is another way to streamline the process by helping you better communicate with the motivated seller and your buyer.

Virtual closings are straightforward, but you should choose reliable electronic signature software beforehand. DocuSign, Dropbox Sign, and PandaDoc are all great options.

Finding discounted properties is the key to successful real estate wholesaling in Alabama. First, learn how to find properties to wholesale at prices that will bring in end buyers.

The best way to find discounted properties is to locate people who need to make cash quickly. These people are known as motivated sellers, and they’re essential to any wholesaling venture.

While there are many types of motivated sellers, they all need money quickly or cannot sell their properties the traditional way due to legal, personal, or maintenance issues.

Let’s look at the three main methods you can use to find distressed properties and motivated sellers.

Method #1: Alabama Distressed Seller Leads

The first — and easiest — method is to buy leads from a third-party lead provider. Lead provider companies find motivated home sellers through advertising and other practices.

You can work with these companies or purchase leads through one of the many real estate wholesaling software tools on the market.

These software tools collect information from motivated sellers, including their contact details and public data concerning their homes — tax liens, foreclosure notices etc.

You can learn more about a seller’s property and gain insight into why they’re interested in selling their property for cash.

Lead providers have properties that need a quick sale due to numerous reasons, including:

• absentee property owners
• out-of-date MLS listings
• pre-foreclosure
• probate

Many Alabama lead providers will charge you on a pay-per-lead basis, but some require a subscription fee.

While you won’t successfully convert every lead you purchase, some companies provide higher quality leads than others.

Research a company thoroughly to ensure it’s reliable before paying for leads. REB Leads is a great example of a high-quality provider of lead generation services for real estate investors.

The program by Real Estate Bees supplies wholesalers with consistent and high-quality motivated seller leads at affordable prices. Sign up for it now.

Method #2: Hire an Agency to Do Marketing for You

The second method is to work with a digital marketing agency that has experience with real estate investor marketing.

Teaming up with a reputable marketing agency and tasking them with wholesale real estate lead generation can save you time and resources.

Reach out to a marketing agency to create a strategy that matches your current budget and plans for growth.

The company can then manage your plan while you focus on running your business.

Marketing agencies develop a plan of action by using one or combining multiple strategies, including:

• content creation
• SEO for real estate investors
• social media marketing
• website design

Working with a marketing agency can increase the number of leads you get, but it will take some time with some of the methods while it will work faster with others.

Social media marketing offers the fastest results, while SEO and content development strategies take longer to work.

Marketing agencies charge wholesalers monthly retainers, and the cost depends on the selected services.

As with lead provider companies, there are effective and less effective marketing agencies out there. Finding a reliable agency takes a lot of work.

If you are leaning towards hiring an agency, you have to be able to sift through an overwhelming sea of bad companies to find one that will serve you as advertised.

But since you are our reader, our team has already done all the heavy lifting for you. We’ve polled and surveyed thousands of our real estate wholesaler members and the overwhelming majority recommended Magnyfi, run by Jacob Hicks.

The service provided by Magnyfi is not cheap. But it is definitely worth it if you are serious about growing your real estate wholesaling business.

Go ahead and watch Jacob’s video presentation on the Magnyfi profile page discussing their methodical process they have been successfully helping other investors grow their businesses.

Method #3: Do Your Own Marketing by Yourself

This last method is for wholesalers with a small marketing budget and a lot of determination.

If you want to take on marketing by yourself, you’ll need a professional real estate investor website made specifically for motivated seller lead generation.

Building a website that’s easy to find and navigate is essential. Your website should be search- and user-friendly to ensure it attracts leads from ads, web search results, and other channels.

While building a website from scratch can be difficult, you can save time by selecting from the best website templates and builders for real estate investors available now.

Creating a great website is important, but you should also use offline marketing strategies. Techniques that can generate more leads include:

• putting up bandit signs
• driving for dollars
• searching public records
• connecting with other wholesalers and real estate professionals and others.

If you want to find real estate investors to advertise Alabama wholesale properties to, the first step is to create a list of cash buyers or to have it shared with you by someone else.

Many different types of real estate investors are currently acquiring wholesale properties in Alabama. These buyers include:

• small-scale local investors
• large hedge funds
• national real estate investing companies

Each type of buyer has a different set of criteria they look for when purchasing a property. Creating lists and profiles for each kind of investor allows you to market effectively to every group.

Use these marketing strategies for wholesaling real estate to access every type of cash buyers Alabama has to offer.

Build Your Own Cash Buyers List

You should start building your own list of Alabama real estate cash buyers as soon as possible.

Networking is a free and convenient way to get started. Sign up for virtual real estate groups and participate in online meetings to get to know other real estate professionals.

While building up your network, take action closer to home by connecting with Alabama real estate professionals specializing in investing.

Reach out to the local contractors working on flip properties and Alabama lenders who partner with Alabama real estate investors.

Building a cash buyers list doesn’t happen overnight. It’s a continuous process. Fortunately, it can be significantly sped up by Real Estate Bees’ revolutionary invention — Property Marketplace Widget for Wholesalers.

It basically allows you to build your own cash buyers list on autopilot, and it’s the only online tool of this kind on the market.

What’s even more powerful is that this tool lets you syndicate your contracted properties directly to Real Estate Bees’ massive marketplace of wholesale deals for sale in Alabama and instantly reach thousands of potential buyers!

Leverage Other People’s Cash Buyers Lists

If you cannot build your own list of companies that buy houses in Alabama, you can leverage other investors’ lists of cash buyers.

Most Alabama real estate wholesalers and other real estate professionals have found success by building relationships with local cash buyers.

By teaming up with those professionals, you can access their lists and find investors fast, but it won’t be cheap. Many list owners ask for up to 50% of your assignment fee as payment.

If you want to avoid giving away half of your profits while using someone else’s cash buyers list, you can use a robust property syndication tool developed by Real Estate Bees to help wholesalers with the disposition.

The tool lets wholesalers leverage Real Estate Bees’ extensive list of Alabama cash home buyers to blast their contracted properties for free.

To take advantage of this cutting-edge functionality, create your free account and list your contracted properties.

Contract Assignment

There are two different contracts you’ll want your seller and buyer to sign when wholesaling houses in Alabama:

1. the contract to buy the property
2. the assignment contract

First, you and your motivated seller will sign a purchase contract.

This contract should have the seller’s personal details and information about the property, including the address and purchase price.

When you have an end buyer, the motivated seller and the buyer will then sign the assignment contract.

By signing the assignment contract, the buyer and seller are stating they’re legally aware you are not purchasing the property for yourself.

The assignment contract is essential to keeping the wholesale process above board. You’ll then give the title company a copy of both contracts to close on the property.

Double Closing

As we talked about before, double closing is a wholesaling strategy that allows the wholesaler to keep their profits confidential. Neither the seller nor the end buyer sees the assignment fee.

To close on a property with the title company, you’ll need to provide two separate contracts:

1. Contract to Purchase Real Estate (by the wholesaler from the seller)
2. Contract to Purchase Real Estate (by the end buyer from the wholesaler)

If you don’t have enough of your own money to close with the seller, you’ll also need to obtain transactional funding from a hard money lender.

This short-term loan lasts about 24 to 48 hours and enables you to close with your motivated seller before quickly closing with your end buyer.

You don’t need a real estate license to wholesale in Alabama, but wholesaling with a real estate license comes with certain benefits.

Getting an Alabama real estate license can protect your business from legal conflicts.

If you overstep your boundaries as a wholesaler and provide real estate agency services, a real estate license protects your business from possible legal charges.

A license allows you to market a property as a wholesaler and a real estate agent at the same time. To become a licensed real estate agent, you’ll first need to join an Alabama real estate brokerage.

While some brokers don’t allow their agents to wholesale properties, there are wholesale-friendly ones.

Interview brokerages before you choose one to ensure it’s right for your wholesale business.

If you’re interested in becoming a licensed real estate agent and want to learn more, check out our guide on how to get a real estate license in Alabama.

There’s technically no age requirement for real estate wholesaling in Alabama. However, in the United States, you must be at least 18 to enter into a legally binding contract.

Because of this federal law, you won’t find sellers or title companies that will work with anyone under 18.

If you’re too young to enter into a legally binding contract, you can partner with someone 18 or over who can sign the contracts on your behalf.

You can legally wholesale real estate in Alabama without an LLC. However, creating an LLC can provide you and your business with extra legal and financial protection.

First, you can get tax benefits when operating under an LLC that are unavailable to sole proprietorships.

Second, creating an LLC is also essential to forming robust real estate asset protection strategies.

Finally, an LLC gives your business a more professional appearance, allowing you more influence within the Alabama real estate community and seeming more trustworthy to home sellers.

Wholesaling is the least expensive investing strategy. Many new investors choose to start with wholesaling because it’s so accessible.

While you may need some startup money to attract motivated sellers and find end buyers, the options discussed in this article can help minimize the total costs.

However, you will still need an earnest money deposit of about $1k to $2k. You’ll also need transactional funding if you want to double close without using your own cash.

The good news is that transactional funding is a short-term loan that doesn’t require proof of a stable employment history or high credit score.

If you want the best transactional funding in Alabama, use the “request financing” form from Real Estate Bees.

The easy-to-use form lets you compare loan rates from numerous lenders with a single request.

How much money you can make wholesaling real estate in Alabama depends entirely on how much work you plan to put in.

The average assignment fee for a property that costs about $150,000 is between $10k and $15k. The more properties you can close, the more money you can make.

How good a market is for wholesaling real estate in Alabama depends mostly on the city or even a neighborhood where you plan to operate.

But to get a general idea, you can look at the Alabama real estate investing market trends.

You can find excellent wholesaling opportunities in big cities and smaller metropolitan areas in Alabama.

Regardless of the city, you’ll want to find neighborhoods that have distressed sellers looking to get cash for their property.

The 15 best cities for wholesaling real estate in Alabama are:

1. Birmingham AL
2. Mobile AL
3. Tuscaloosa AL
4. Dothan AL
5. Decatur AL
6. Florence AL
7. Gadsden AL
8. Vestavia Hills AL
9. Bessemer AL
10. Montgomery AL
11. Huntsville AL
12. Hoover AL
13. Auburn AL
14. Madison AL
15. Opelika AL

This article outlines the basics of wholesaling real estate for beginners in Alabama, but there’s much more to learn before starting your wholesaling business.

Investing in your education is the best way to become a successful real estate wholesaler.

Below are the four best ways to learn all there is to know about how to become a real estate wholesaler so that you can start your new business venture as quickly and as prepared as possible.

#1: Courses

Many accomplished real estate wholesalers love to share their knowledge with people in search of the financial freedom wholesaling provides.

These experienced wholesalers have the knowledge and expertise to create courses and educational programs that genuinely help individuals just starting out.

However, there are also a lot of businesses and individuals who use courses to scam new wholesalers out of money.

Luckily, Real Estate Bees has a list of the best real estate wholesaling courses so that you can choose an effective and reputable course.

#2: Books

Reading books has always been an inexpensive way to learn new information, and it’s no different for real estate wholesaling.

Two excellent books to get you started are:

1. The Wholesaling Blueprint by Luke Weber
2. If You Can’t Wholesale After This… by Todd Fleming

For more high-quality book suggestions, check out this list of the best real estate wholesaling books.

#3: Investor Clubs

Joining a local investor club is another great way to learn about wholesaling. Alabama has many investor clubs with active members who have years of first-hand experience.

Sign up for a group and start attending meetings, asking questions, and listening to experts in the field.

In addition to learning more about wholesaling, joining an investor club is also an excellent way to find cash buyers for wholesaling real estate.

Look at Real Estate Bees’ list of real estate investor clubs in Alabama to find an established club near you.

#4: Real Estate Wholesaling Mentors

While the previous resources can help you learn about wholesaling, hiring a real estate wholesaling mentor is the best way to get your business off the ground.

Working with a mentor allows you to get guidance from a seasoned expert to grow your business quickly and avoid making expensive mistakes.

Teaming up with one of the best Alabama real estate investment mentors or coaches is the first step to creating a business plan, developing marketing strategies, and meeting your investment goals.

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About the Author

With over 20+ years of experience in real estate investment and renovation, Brian Robbins brings extensive knowledge and innovative solutions to the HouseCashin team. Over the years Brian has been involved in over 300 transactions of income producing properties across the US. Along with his passion for real estate, Brian brings with him a deep understanding of real estate risks and financing.