How to Wholesale Real Estate in Louisiana (2023 Updated)
Everything you need to know about wholesaling Louisiana real estate is explained here.
We’ll review marketing strategies, steps to follow, types of contracts to sign, and resources that will help you start wholesaling real estate in Louisiana.
Read this to jumpstart your road to becoming a bonafide Louisiana property wholesaler.
Is Wholesaling Real Estate Legal in Louisiana?
Those of you that are new to real estate wholesaling will want to know, “Is it legal to wholesale real estate in Louisiana?”
Yes, it is legal so long as Louisiana real estate wholesaling laws and regulations are followed.
Strict adherence will ensure your business is fully compliant and operating legally.
This means avoiding one of the biggest risks of wholesaling real estate, i.e., employing improper wording when marketing your contracts to end buyers.
You don’t want your activities to look similar to real estate brokerage services, especially if you don’t hold a Louisiana real estate license.
Unless you are one of Louisiana licensed real estate agents, you may not market real estate publicly.
For a better understanding of applicable Louisiana laws, review the rules and regulations of the Louisiana Real Estate Commission as well as Louisiana Revised Statutes:
If there’s any doubt, you may want to find one of the Louisiana best real estate attorneys for a review (or to draft templates) of the purchase agreement and assignment contract for you.
How to Wholesale Real Estate in Louisiana?
Most wholesaling deals are undertaken in one of the two ways, namely by a contract assignment or a double closing method.
These deals can be also closed remotely with no need to live in Louisiana. The entire real estate wholesaling checklist can be carried out virtually.
There are pros and cons of real estate wholesaling via each of these strategies. Continue reading to learn how to wholesale houses in Louisiana and which approach best fits your business plan.
Contract assignment is the most common way to wholesale real estate in the United States as well as Louisiana in particular.
Its advantage is that you don’t have to have the cash to close on the property. A couple thousand dollars in a refundable earnest money deposit is all investment you need to make before collecting profit.
Here is the outline of wholesaling real estate step-by-step with this strategy.
- Sign contract to purchase real estate with a motivated seller. While getting a house under contract, the agreement must state that it can be assigned to a third party.
- Find a real estate investor who’d like to purchase the same property.
- At the closing, instead of purchasing the house yourself, assign the contract to the investor. This will mean that you are granting the right to purchase the property to the investor, in exchange for an assignment fee.
Simply put, here wholesalers actually buy homes from homeowners and then sell them to buyers as a separate transaction.
Say you as a real estate investor sign a contract to purchase a property for $300,000. But before closing, you enter another contract to sell the property to a third party for $350,000.
During the closing process, you close on the property twice: when buying it from the seller, and then, right away, when reselling it to the investor.
With double closing:
- your assignment fee is hidden from both the seller and buyer
- transactional funding for the whole price of the house (plus closing costs) may be needed if you don’t have your own cash.
Note that if a double closing requires cash you don’t have, you can look to the best Louisiana hard money lenders.
Regardless of your location, web-based or virtual wholesaling in Louisiana is also possible. It’s done easiest if you establish the following network of contacts in advance:
- A qualified contractor or home inspector in Louisiana to assign repair costs to contracted properties. These cost estimates help analyze real estate deals. Also, have an inspection contingency clause in your purchase agreement giving contractors access to properties.
- A Louisiana wholesale friendly title company to conduct trouble-free online closings.
- Engaging Louisiana investor friendly real estate agents often assists in handling communication between you, your buyer, and the seller.
You can find a motivated seller as well as a cash buyer online. By using electronic signature software, you can complete deals with both parties — from signing purchase contracts to closing.
How to Find Properties to Wholesale in Louisiana?
You will need to know how to find properties for wholesaling. This entails looking for deals where a homeowner is ready to sell their property at a below market value. Such owners are called motivated sellers.
There are various motivated seller types, and most of them seek quick cash. They may want to bypass costs and time required for repairs.
Most wholesalers especially like to locate distressed properties which means houses in pre-foreclosure.
Their sellers are highly motivated because of the time constraint put on them by an upcoming foreclosure auction.
Below are a few ways to find motivated sellers.
#1 Buy Louisiana Distressed Seller Leads
A labor-saving way is, instead of trying to figure out where to find motivated home sellers yourself, buying leads from professionals who’ve already done the job for you.
Also, many wholesale real estate apps provide leads as part of their functionality set.
While not all of the leads will successfully convert, you will likely be charged on a pay-per-lead basis.
Conduct due diligence before engaging such companies. You don’t want to buy leads just to learn that some of them are already converted by someone else or aren’t really motivated sellers.
One respected provider of real estate investor lead generation services is Real Estate Bees.
Our REB Leads program supplies wholesalers with industry’s most affordable and highly converting motivated seller leads. Sign up for it now.
#2 Hire an Agency to Do Marketing for You
Another approach is to farm out generating leads for real estate wholesalers and related processes.
An outside agency experienced in real estate investor marketing is ready to perform such services as:
- SEO for real estate investing
- content marketing
- website design
- social media marketing
- web advertising
These agencies typically charge a monthly retainer fee for conducting various marketing efforts.
Again, you are advised to do due diligence: even well-known companies may underdeliver because of taking on many clients at the same time.
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.
#3 Do Your Own Marketing by Yourself
Having a website offers many ways to attract leads such as via web search, social media advertising, and other avenues.
Fortunately, getting a decent website is not difficult. Many companies have created premade website solutions specifically for real estate wholesalers and investors that are easy to install and use.
Choose one from the best website builders for real estate investors that we reviewed for you.
Don’t forget about offline methods such as installing roadside bandit signs, attending foreclosure auctions, and looking through the county’s property tax assessor’s records to find debtors.
They may be old school but they still deliver.
How to Market Louisiana Wholesale Deals to Investors?
Various investors may be looking for contracted properties, including:
- real estate investing companies
- hedge funds that pool investment capital
- individual investors such as home flippers and landlords
These differing kinds of cash buyers have unique buying criteria. You must make sure to cater to their specific needs by properly sorting your leads.
Your buyers will differ as to purchase terms, so listing them by category is advantageous. To find these buyers, learn how to build your wholesale real estate marketing plan.
Build Your Own Cash Buyers List
Absent much money, build your own Louisiana real estate cash buyers list by joining as many web real estate networking groups as time permits.
Contact respected Louisiana professionals that work for investors: renovation contractors, appraisers, agents, and lenders in Louisiana.
Ask them to give you contacts of Louisiana real estate investors they serve. They must be interested in helping you as you will be the one bringing their clients deals these professionals will be hired to facilitate.
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 Real Estate 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 Louisiana and instantly reach thousands of potential buyers!
Leverage Other People’s Cash Buyers Lists
With no time to collect companies that buy houses in Louisiana for your own list, you can use someone else’s.
Many successful Louisiana real estate wholesalers and other real estate professionals network with investors. They could allow you to use their list for a fee.
However, this might be expensive. For each successful deal with an investor from someone else’s list, you may be required by the list owner to pay up to 50% commission on your profit.
If you want to avoid giving away that much of your revenue, 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 Louisiana 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 Louisiana?
Earlier we talked about the two ways of wholesaling houses in Louisiana. Your set of documents will depend on the method you are using.
While the standard set of documents will be the same as in a traditional transaction, let’s take a look at the differences in the contracts you will need to sign with the seller and the buyer.
With the contract assignment method, you need to sign the purchase contract and the assignment contract separately.
The purchase contract is signed between you and the seller while the assignment contract is signed by you, the seller, and the end buyer.
An assignment contract:
- includes a copy o the Purchase Contract
- stipulates that the end buyer assume property ownership
- absolves the wholesaler of all responsibility for the property
As previously discussed, wholesalers use double closings when they don’t want the seller or end buyer to know their exact profit in the deal.
In Louisiana, there’s a one day wait between closing with the seller and then closing with the end buyer. Wholesalers must provide title companies with two contracts on closing:
- A Contract to Purchase Real Estate to acquire the property from the seller
- A Contract to Purchase Real Estate to resell the property to the end buyer.
The obligations, liabilities, and rights of buyers and sellers are outlined in this contract that includes:
- the property’s location
- purchase price
- earnest deposit
- default provisions
- options to terminate
- closing information
and all other regular details for contracts to purchase real estate.
Before signing the document, such provisions are negotiable by both parties. Post-signing, contingencies must be met within specified time periods prior to closing.
You will also require transactional funding absent fronting your own cash to cover the full price of the house.
Such funding is typically a short 24 to 48 hours loan enabling you to close with sellers prior to near-term closing with the end buyers.
Do You Need a License for Real Estate Wholesaling in Louisiana?
An active Louisiana real estate license is not required to wholesale real estate there. But having one does offer certain benefits.
Wholesaling with a real estate license allows you to have marketing a property as a real estate agent as a backup plan in case you can’t find an investor quickly enough.
Unlicensed, you can only market the rights to the contract assignment. You are not allowed to engage in any public advertising, either online or in newspapers that directly publicizes the property or that it is for sale.
Becoming a licensed real estate agent requires you to join a Louisiana real estate brokerage. Often brokers discourage their agents from wholesaling, so find out how wholesaler-friendly they are.
To learn more about becoming a licensed real estate agent, read our guide on how to get a real estate license in Louisiana.
What Is the Age Requirement for Real Estate Wholesaling in Louisiana?
Under federal rules, to enter a legally binding contract, one must be at least 18 years of age, plus:
- be a citizen of the United States or a lawfully admitted alien
- have obtained a high school diploma or equivalency certificate (GED)
Those under that age can partner with someone else able to sign contracts for you.
Do You Need an LLC for Wholesaling Real Estate in Louisiana?
While there’s no requirement to form an LLC, having one offers benefits. Registering an LLC or another type of corporation should be among your real estate asset protection strategies.
- As a sole proprietor or general partner, you and your business have everything at risk.
- Regarding business partners and employees, LLCs protect you from personal liability for their actions.
- LLCs provide operating structure for decision making, profit and loss distributions, and dealing with other owners.
- More tax options such as electing S or C corporation taxation are available.
- You are seen as more qualified for business loans as an LLC.
- Appearing more professional adds clout with Louisiana’s real estate investing community.
How Much Money Do You Need to Wholesale Real Estate in Louisiana?
The short answer is “not much!” which is why wholesaling is so popular with real estate beginners. Some marketing dollars are needed to find sellers and end buyers.
Earnest money deposit too, perhaps $1,000 – 2,000 to be paid. Also transactional funding is needed for those who prefer double closings, if wholesalers don’t have deep pockets themselves.
Note that since transactional funding is a short-term loan, a high credit score, history of employment, and other credit-worthy measures are not relevant.
Finding the best transactional funding is as easy as completing Real Estate Bees’ “request financing” form. By doing so, compare interest rates offered by multiple lenders.
How Much Money Can You Make Wholesaling Real Estate in Louisiana?
The money-making potential of wholesaling depends upon market conditions and the effort devoted to it.
Wholesalers keep the difference between original owners’ sale prices and end buyers’ purchase prices. Profits tend to range between 5-10% of property’s selling price.
An average assignment fee for a $150k house typical to its neighborhood is usually $10-15k.
Is the Louisiana Real Estate Market Good for Wholesaling?
How good a market is for wholesaling real estate in Louisiana depends mostly on the city or even a neighborhood where you plan to operate.
But to give you a general idea on the state level, look at the Louisiana real estate investing market trends at HouseCashin.com.
How to Learn Real Estate Wholesaling in Louisiana?
We have been covering Louisiana wholesaling fundamentals, but before putting your money at risk, there is much more to learn.
Below, we describe a few options to consider your source of information on wholesaling real estate investing for beginners.
Many experienced wholesalers are enthusiastic about training newbies to achieve financial freedom. They have the expertise and talent to create full educational curriculums.
Similarly to a mentor, a good training program will walk you through the real estate wholesaling process from A to Z and teach you to avoid mistakes.
In recent years, the number of online courses has exploded. Be careful, however, because many so-called “experts” out there are looking to take advantage of inexperienced wholesalers.
Finding credible training programs is as easy as checking out Real Estate Bees’ list of real estate wholesaling courses — we’ve already done research for you.
Real Estate Wholesaling Mentors
You are strongly encouraged to engage a real estate wholesaling mentor for step-by-step direction. A coach will personally teach you about everything you need to know about wholesaling real estate.
Professional oversight can steer you clear of losing money and time doing it wrong. It will help in making the right moves to build out your business from the very beginning.
As you build your business, one of the best Louisiana real estate investment mentors or coaches can help create a business plan, set achievable goals, and develop marketing strategies.
Several inexpensive wholesaling real estate books are great resources for upgrading your wholesaling acumen.
These best books on real estate wholesaling offer you a wealth of information based on the experiences of their authors — nationally recognized investing and wholesaling professionals.
Within Louisiana, you’ll find many local investor clubs ready to help. By joining, you can learn much from club members with first-hand experience.
Often these members are accomplished investors quite willing, and even enthusiastic, about helping others.
What’s most important, connections with local investors and other professionals can lead to finding cash buyers for wholesaling real estate and adding them to your buyer list.
Real Estate Bees has a list of well-respected real estate investor clubs in Louisiana to facilitate your search.
If you want to contribute your expert advice on a topic of your expertise, feel free to apply to our Expert Contributor Program.
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.