How to Wholesale Real Estate in Kentucky (2024 Updated)
This article will provide you with all the important information you need to get started with wholesaling houses in Kentucky.
You will learn about the different types of contracts you will need and effective marketing strategies.
We will also provide you with additional resources to help you launch your real estate wholesaling business.
So, keep reading to discover how to start your own successful real estate wholesaling venture in Kentucky.
Is Wholesaling Real Estate Legal in Kentucky?
As a beginner in real estate investing, you may have the question, “Is it legal to wholesale real estate in Kentucky?”.
Wholesaling real estate is allowed in all states of the United States, provided that you adhere to the legal requirements diligently. In short, it is lawful to wholesale real estate nationwide.
Nevertheless, having an awareness of the possible risks of wholesaling real estate and a comprehension of the Kentucky real estate wholesaling laws is vital. This knowledge can help guarantee that your enterprise is running legally.
To enhance your comprehension of the relevant laws in Kentucky, we suggest that you review the rules and regulations established by the Kentucky Real Estate Commission.
Wholesalers are only allowed to promote the rights and obligations linked to a contract to purchase real estate.
However, only licensed Kentucky real estate agents or property owners can market a property.
One of the most significant uncertainties in wholesaling real estate is the possibility of using inappropriate language while promoting your contracts to prospective buyers.
It would be beneficial to consult with the best Kentucky real estate attorneys to create or evaluate templates for your purchase agreement and the assignment contract.
How to Wholesale Real Estate in Kentucky?
Here are the two distinct approaches of how to wholesale houses in Kentucky:
- Contract assignment
- Double closing
Furthermore, the real estate wholesaling process can now be completed remotely, allowing you to finalize deals from the comfort of your own home.
This technique is referred to as virtual wholesaling.
Contract Assignment
Many new investors typically begin by learning about the contract assignment technique when exploring how to wholesale houses in Kentucky.
Firstly, you need to acquire a signed purchase contract between yourself and the motivated seller, as if you were the actual buyer.
However, in reality, you are not obligated to buy the house.
The contract should include a provision that allows you to transfer it to a third party. The third party refers to the individual or entity that will ultimately buy the property from the homeowner.
After getting the house under contract and having located the final buyer, the wholesaler has the seller and ultimate buyer sign the assignment contract.
This means that you will give up your right to purchase the property to the investor who plans to buy the house.
In return for transferring the contract to the investor, you will receive a payment from them known as an assignment fee. This payment will serve as your profit.
Typically, an earnest money deposit of around one or two thousand dollars, which can be refunded, is enough to carry out a wholesale transaction according to this plan.
By using this method, you can avoid the need for the funds required to purchase the property.
Double Closing
As a complement to contract assignment which is more common, it’s crucial to become proficient in the double closing method to gain a comprehensive understanding of everything you need to know about wholesaling real estate.
This approach involves purchasing the property initially and subsequently reselling it to a different buyer in a distinct transaction.
The method of double closing is frequently employed by wholesalers in situations where they obtain a significant fee for their assignment and desire to conceal their earnings from both the seller and the ultimate purchaser.
Nonetheless, there are pros and cons of real estate wholesaling when utilizing this method. An advantage is an option to keep your profit private from other parties involved in the transaction.
A drawback of this tactic is that if you lack the necessary funds to make the purchase, you will require transactional funding. The best Kentucky hard money lenders can provide you with it.
When drafting your Kentucky real estate wholesaling checklist, prioritize finding a wholesale-friendly title company.
You should always consider working with a reputable title company that understands double closing deals.
Virtual Wholesaling
It’s feasible to participate in virtual wholesaling in Kentucky. This approach involves selling real estate without being physically situated in the state.
It is advisable to include an inspection contingency clause in the contract when using this method.
By doing this, the inspector will be able to enter the property and provide you with accurate estimates.
Working alongside Kentucky investor friendly real estate agents can assist with handling communication among all parties involved, including yourself, the buyer, and the seller.
Prior to beginning, it’s essential to remember two key factors.
Firstly, to facilitate virtual closings, it’s crucial to collaborate with a Kentucky wholesale friendly title company.
Secondly, you can employ a home inspector in Kentucky to evaluate the property and produce an extensive report, which will enable you to analyze real estate deals virtually.
Having a comprehensive understanding of wholesaling real estate step-by-step is critical, particularly if you’re not physically present onsite.
Electronic signature software such as DocuSign can be utilized to attach an electronic signature to the contracts.
How to Find Properties to Wholesale in Kentucky?
In order to effectively conduct business in Kentucky, it is essential to comprehend the process of how to find properties to wholesale at an appropriate price that will attract potential buyers.
We will examine three techniques that can be employed to find distressed properties.
Sellers who are eager or driven to sell their properties at a lower price are referred to as motivated sellers.
Different types of motivated sellers often have an urgent need for cash.
These sellers are unable to invest the time or money required to repair the property or settle legal matters associated with it, therefore making it impossible to sell through conventional means and at market value.
#1 Buy Kentucky Distressed Seller Leads
Purchasing leads may be viewed as the most straightforward approach.
There are firms that focus on advertising and other methods of finding motivated home sellers.
You may be charged either a fee per lead or a subscription fee by these companies.
It is important to verify that the company has a good reputation and a proven track record of generating leads.
These companies have expertise in various types of leads, including expired MLS listings, absentee property owners, pre-foreclosure properties, and probate homes.
It is common for leads not to be successfully converted in 100% of cases, but the quality of leads provided by certain companies may be inferior to others.
Additionally, there exist real estate wholesaling software tools that provide lead acquisition as one of their functionalities.
These tools gather contact information from homeowners, as well as details about their properties and circumstances, that lead them to sell their houses to Kentucky-based cash home buying companies.
If you are seeking a lead generation company for real estate investors, REB Leads is a viable option to consider.
The program is specifically created to furnish wholesalers with the most reasonably priced and top-notch motivated seller leads available in the market. Sign up for it now!
#2 Hire an Agency to Do Marketing for You
Real estate investors have the choice to outsource their wholesale real estate lead generation or delegate other responsibilities to agencies that specialize in real estate investor marketing.
Services provided by digital marketing agencies include:
- real estate website design
- real estate investor SEO (search engine optimization)
- conducting social media marketing
- PPC ad management for real estate investors.
These agencies can work together with you to develop a personalized plan that fits your budget and goals.
They can manage your campaigns, allowing you to focus on other business-related tasks.
Marketing agencies charge a fixed monthly fee for handling multiple campaigns on behalf of wholesalers.
The time between the start of a campaign and getting leads can fluctuate depending on the approach employed.
For example, search engine optimization may take a few months to display outcomes.
In contrast, digital advertising can yield results almost immediately but generally incurs higher costs.
While there are many excellent companies available, unfortunately, some agencies only demonstrate excellent marketing skills in promoting their own services.
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 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 the methodical process they have been successfully helping other investors grow their businesses.
#3 Do Your Own Marketing by Yourself
If you have a restricted marketing budget, it may be essential to perform the marketing tasks yourself.
A website can be a flexible tool to get leads from Google. It’s also helpful for social media advertising as it will collect leads coming from social media.
The initial step is to establish a professional real estate investor website for motivated seller lead generation.
Choosing a website solution that allows you to create a user-friendly and easily navigable online platform is critical.
You can pick from the available website templates for real estate investors on the market.
Apart from online methods, you can also employ offline techniques to locate motivated sellers.
Some of these methods include sending real estate wholesaling postcards, scrutinizing public records, scouting potential properties while driving around, using bandit signs, teaming up with other real estate professionals, and more.
How to Market Kentucky Wholesale Deals to Investors?
In order to market Kentucky wholesale properties, it is necessary to create or obtain a list of individuals or companies who are interested in purchasing properties with cash.
You can find real estate investors in your location online or offline and arrange their contacts in a list. Then, you will have to reach out to them and establish a relationship.
Various methods of marketing strategies for wholesaling real estate can be employed to attract the attention of these cash buyers.
Creating distinct lists for every category of cash buyer is recommended in order to ensure complete and thorough coverage.
There are various types of real estate investors who may have an interest in your under-contract properties, including hedge funds, real estate investment companies, and individual investors, each having their own specific purchasing standards.
Build Your Own Cash Buyers List
For those with limited financial resources to compile their own list of Kentucky real estate cash buyers, networking is a feasible alternative.
You can establish connections with dependable vendors in Kentucky who possess expertise in real estate investment, such as contractors who specialize in property flips or Kentucky lenders who partner with Kentucky real estate investors.
It is advisable to participate in multiple online real estate networking groups. These groups frequently arrange virtual meetings and can be located on Facebook.
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 Kentucky and instantly reach thousands of potential buyers!
Leverage Other People’s Cash Buyers Lists
In case you have limited time and can’t produce your own list of Kentucky home buying companies, there is an alternative approach that involves utilizing a pre-existing list of cash buyers created by someone else.
While this shortcut may speed up the expansion of your business, the individuals who possess the list frequently ask for a commission that can reach 50% of your assignment fee.
Real estate professionals, including thriving Kentucky real estate wholesalers, have dedicated significant time to establishing connections with investors.
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 Kentucky 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.
What Documents Are Needed for Wholesaling Real Estate in Kentucky?
Contract Assignment
When wholesaling houses in Kentucky, securing signatures on two distinct contracts is crucial:
- An assignment contract
- A contract for buying real estate
The initial purchase contract is executed between you and the seller.
Afterward, once you have found your end buyer, you need to acquire signatures on an assignment contract from both the seller and buyer.
This agreement confirms that you are not obtaining the property for yourself and demonstrates transparency to both parties involved. It also stipulates your assignment fee.
During the closing, the title company will require copies of both contracts.
Double Closing
Double closings are often meant to prevent the seller or end buyer from discovering their exact profit from the deal.
In case you don’t have enough money to cover the entire cost of the property, you will need to obtain transactional funding.
This type of funding involves a short-term loan, usually lasting between 24 to 48 hours, that allows you to complete the purchase transaction with the seller and then with the end buyer.
You will be required to present two contracts to the title company to finalize the transaction, which include:
- A real estate purchase agreement between the wholesaler and the seller
- A real estate purchase agreement between the end buyer and the wholesaler.
Do You Need a License for Real Estate Wholesaling in Kentucky?
Even though it is not mandatory to have an active Kentucky real estate license, wholesaling with a real estate license provides new opportunities for you and your business.
If you have a real estate license, you can advertise a property also as a real estate agent.
However, to obtain a licensed real estate agent status in Kentucky, you must join a Kentucky real estate brokerage. Keep in mind that some brokers don’t allow their agents to engage in wholesaling.
It’s crucial to have discussions with several brokerages and choose one that is supportive of wholesaling.
To learn more about obtaining a license, refer to our guide on how to get a real estate license in Kentucky.
What Is the Age Requirement for Real Estate Wholesaling in Kentucky?
In the United States, the legal age to enter into a binding contract is 18. However, there is no age restriction for practicing real estate wholesaling in Kentucky.
If you are under 18 years old, sellers and title companies may not be willing to work with you. In such a situation, you can collaborate with a legally capable person to sign contracts on your behalf.
Do You Need an LLC for Wholesaling Real Estate in Kentucky?
Although legally wholesaling real estate in Kentucky does not require you to establish a limited liability company (LLC), having the right business structure can offer extra protection.
Many real estate asset protection strategies are based on forming an LLC or another type of corporation.
Operating as an LLC can make you eligible for business loans, which is not possible if you are wholesaling as an individual.
It can also enhance your credibility as a real estate investor in the eyes of property sellers.
Additionally, there are tax benefits associated with using an LLC that are not available when operating under an individual’s name.
Creating an LLC can add professionalism to your business, which can improve your credibility within the Kentucky real estate investing community.
How Much Money Do You Need to Wholesale Real Estate in Kentucky?
To find distressed sellers and buyers, you will need to spend money on marketing, but there are ways to minimize costs, as mentioned earlier.
Wholesaling is a relatively inexpensive real estate investment strategy, which is why many investors choose it as their first option.
Typically, you’ll need an earnest money deposit ranging from $1,000 to $2,000 to proceed with the transaction.
If you want to double close, you’ll need transactional funding for the whole price of the property unless you have the necessary cash.
To find the most suitable transactional funding in Kentucky, you can use Real Estate Bees’ “loan request” form to compare rates from different lenders quickly.
Qualifying for transactional funding is easy because it’s a short-term loan that doesn’t require a high credit score, employment history, or similar factors.
How Much Money Can You Make Wholesaling Real Estate in Kentucky?
The amount of profit you can make from wholesaling real estate in Kentucky depends on how much effort you put into it.
Generally, if you sell a standard property in a community that costs $150,000, you can expect an assignment fee of around $10,000 to $15,000 as a benchmark.
Is the Kentucky Real Estate Market Good for Wholesaling?
To determine the market potential for wholesaling real estate in Kentucky, the specific location of your business within a city or neighborhood plays a crucial role.
To gain a broader understanding, you can examine the trends in Kentucky’s real estate investing market.
What Are the Best Cities for Wholesaling Real Estate in Kentucky?
The most competitive cities for wholesaling real estate in Kentucky are Louisville, Lexington, and Bowling Green.
These cities have a larger number of real estate investors and a higher demand for properties, which leads to more competition for deals.
The potential profit in these cities is also higher due to the strong real estate market.
It is essential to conduct thorough market research and develop a strong network of buyers and sellers to succeed in these competitive markets.
Here is a list of the top cities in Kentucky that are good for wholesaling:
How to Learn Real Estate Wholesaling in Kentucky?
In addition to the basic concepts of wholesaling real estate for beginners in Kentucky, it’s advised to acquire further knowledge before starting.
The following are the most effective ways to gain expertise and start a wholesale real estate business as soon as possible.
Courses
There are many scammers out there who try to exploit inexperienced and naive wholesalers.
However, there are also many successful wholesalers who have the knowledge and skills to create comprehensive educational programs and are eager to help others achieve financial independence.
To find the best training programs, you can refer to Real Estate Bees’ list of legitimate and trustworthy real estate wholesaling courses.
Real Estate Wholesaling Mentors
Getting guidance from an expert can prevent costly mistakes and keep you on the path to success.
It is highly recommended to hire a mentor in real estate wholesaling who can offer you specific instructions and guidance.
Working with one of the best Kentucky real estate investment mentors or coaches can help you create a comprehensive business plan, set realistic goals, and receive guidance in selecting appropriate marketing strategies.
Books
Reading books on wholesaling real estate is an excellent and budget-friendly way to become familiar with the industry.
It’s highly recommended to check out our best real estate wholesaling books compilation, which will offer you several options to explore.
Real Estate Investment Clubs
In Kentucky, there are various local investor clubs that you can join to gain insights from active members with direct experience.
In these clubs, investors and wholesalers hold meetings to discuss current trends and business strategies that currently work.
To find reliable clubs to join, you can check out Real Estate Bees’ list of real estate investor clubs in Kentucky.
In addition, joining clubs can serve as a useful approach to find cash buyers for wholesaling real estate and other partnership opportunities.
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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.