How to Wholesale Real Estate in Missouri (2023 Updated)
This article will describe everything there is to know about wholesaling houses in Missouri.
We will tell you how to find Missouri homes to wholesale, what kinds of contracts you should use, and which marketing strategies work best for wholesalers.
The resources we have collected for this article will help you get started wholesaling as soon as possible. Continue reading to learn more.
Is Wholesaling Real Estate Legal in Missouri?
Most starting real estate wholesalers ask, “Is it legal to wholesale real estate in Missouri?”
Luckily for investors throughout the state, the answer is yes. If you follow the laws carefully, it is legal to wholesale real estate across Missouri and the entire country.
But before getting started, new investors must follow Missouri real estate wholesaling laws and understand the risks of wholesaling real estate.
While wholesalers don’t need a real estate license to operate in Missouri, the right to wholesale comes with limitations. Those limitations include what language wholesalers can and cannot use.
The biggest risk you’ll face as a wholesaler comes from using the wrong wording when marketing properties to end buyers.
Homeowners and licensed Missouri real estate agents are the only two parties that can sell a house in Missouri.
Wholesalers can’t market homes or other properties, but they can market the contracts to those homes and properties.
For a better understanding of Missouri wholesaling laws — including which words to avoid in contracts — review the Missouri Real Estate Commission’s rules and regulations.
Once you understand wholesaling law better, you can hire one of the best Missouri real estate attorneys to draft purchase agreement templates or review your contracts.
How to Wholesale Real Estate in Missouri?
Missouri has two unique methods for wholesaling real estate: contract assignment and double closing.
Remember, if you’re interested in wholesaling Missouri properties, there is no need to live in the state. You can complete the real estate wholesaling process remotely from anywhere.
The contract assignment method is the first strategy newbie investors familiarize themselves with when learning how to wholesale houses in Missouri.
This method is popular with beginners because it is a straightforward process. You will need two parties to get started:
- A motivated seller
- An investor or end buyer
First, you and your motivated seller will sign a purchase contract.
Getting the house under contract requires you to sign a contract as if you’re buying the property. However, a clause in the contract means you won’t actually be buying it.
Instead of buying the house yourself, you will be able to assign the contract to your end buyer.
Next, your motivated seller and end buyer will sign an assignment contract.
This contract allows the wholesaler to transfer purchase rights to the investor or end buyer so that they will legally be the one purchasing the house.
After that contract has been assigned, the end buyer will pay you the assignment fee, which is your profit as a wholesaler.
The contract assignment allows you to make money from wholesaling, even if you do not have the funds to purchase the property.
In most cases, you will just need one or two thousand dollars for a refundable earnest money deposit to wholesale by using the contract assignment method.
The contract assignment method is great for starting your career, but learning everything you need to know about wholesaling real estate means also mastering the double closing method.
A wholesaler will use this strategy if they expect to receive a hefty assignment fee.
These wholesalers don’t want the seller or end buyer to see their profits from the transaction, and the double closing method allows them to keep the information confidential.
The double closing method requires the wholesaler to complete two separate closings. First, you will close with the motivated seller and then with the end buyer.
Before deciding if this is the right strategy for your business, you should consider the pros and cons of real estate wholesaling by using this method.
As previously discussed, one advantage to double closing is that the two separate closings allow you to keep your profits confidential.
However, you need to secure transactional funding if you don’t have enough cash to close with the seller.
Luckily, you can obtain funding from one of the best Missouri hard money lenders.
Choosing a wholesale-savvy title company should be at the top of your Missouri real estate wholesaling checklist if you decide to use the double closing method.
A reputable wholesale-friendly title firm will know all there is to know about double closing and can facilitate your real estate transactions.
Once you understand wholesaling real estate step-by-step, you can practice virtual wholesaling in Missouri, no matter where you are based.
Learn everything you can about wholesaling houses in Missouri and create a network of real estate professionals before getting your first house under contract.
Start your wholesaling journey by teaming up with two essential vendors:
1. A reputable contractor or home inspector in Missouri who can help you analyze real estate deals and provide you with accurate rehab cost estimates for your properties. Make sure your contracts have an inspection contingency clause so that your contractor can enter the property and give accurate estimates.
2. A Missouri wholesale friendly title company that can help you with virtual closings.
You should also consider collaborating with Missouri investor friendly real estate agents who can facilitate communication between you, the motivated seller, and your end buyer.
Finally, choosing reliable electronic signature software is essential to successful remote closings.
Dotloop and DocuSign are two examples of software that allow you to sign documents virtually, but there are many to choose from.
How to Find Properties to Wholesale in Missouri?
Learning how to find properties to wholesale at prices that will entice investors is essential to building a real estate wholesaling business.
Owners looking to sell their properties at a discounted price are known as motivated sellers.
There are many different motivated seller types who want to make cash quickly from selling their property, and they all have different reasons for selling.
The property owner might be unable to sell the traditional way due to not having the time or money to fix the building or having unresolved legal or personal problems.
In the following sections, we will look at three methods you can use to find distressed homes.
#1 Buy Missouri Distressed Seller Leads
The easiest way to find motivated home seller leads is to buy them.
Numerous companies specialize in finding distressed sellers through advertising and other techniques.
Using real estate wholesaling software tools that include lead purchasing and other features is another option.
These tools gather motivated sellers’ contact details and information on their properties.
They also collect details about the sellers, including why they want to sell their homes to Missouri investors for cash.
These companies specialize in finding numerous types of leads, such as:
- out-of-date MLS listings
- absentee owners
- pre-foreclosure properties
- probate properties
Some Missouri lead providers charge you per lead, while others require you to pay a subscription fee.
While not all of the leads you purchase will be profitable, the quality of the leads can vary significantly from company to company.
You should always research a company to ensure it’s reputable before purchasing leads.
REB Leads is an excellent choice for wholesalers looking for a reliable company that offers lead generation for real estate investors.
Real Estate Bees designed the program to provide real estate wholesalers with affordable and high-quality motivated seller leads. Sign up for it now.
#2 Hire an Agency to Do Marketing for You
The second way to find leads is to outsource the entire wholesale real estate lead generation process to an agency specializing in marketing for real estate investors.
Teaming up with a digital marketing agency that will manage your advertising campaigns can help you focus on other aspects of your wholesale business.
Plus, these agencies will work with you to create a plan that matches your budget and future business goals.
Some services digital marketing agencies provide include:
- real estate website design
- real estate search engine optimization (SEO)
- PPC ad management for real estate investors
How quickly you see results will depend entirely on the marketing strategy you choose. For example, search engine optimization and content creation take longer to work.
On the other hand, digital advertising will have leads coming in quickly. This strategy costs the most, but you can expect almost immediate results.
Most marketing agencies charge clients a monthly payment, with prices dependent on the selected services.
Working with an agency can be a great choice, but many unreliable companies exist. Finding a high-quality agency can take a lot of time and research.
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
If you have a small budget, you can always do your own marketing. While this may seem to be the most affordable option, it also takes the most work.
The first step is building a professional real estate investor website designed specifically for generating motivated seller leads.
A well-made website is a helpful and versatile tool that enables you to attract motivated sellers through online searches, social media ads, and other channels.
While building your website, remember that you want to create a user- and search-friendly resource that’s easy to find and navigate.
If you’re new to designing and building websites, you can use one of the best website builders for real estate investors.
In today’s digital age, websites can seem like the only marketing tool that matters. However, your marketing strategies should extend beyond an online presence.
Some effective offline advertising methods include:
- driving for dollars
- bandit signs
- real estate wholesaling postcards
- browsing public records
- building a network of real estate professionals, and more.
How to Market Missouri Wholesale Deals to Investors?
Knowing how to find real estate investors is the first step in marketing Missouri wholesale properties to them. The best way to find them is to buy or get access to a list of cash buyers.
Many types of investors are interested in buying wholesale Missouri properties for cash, including:
- real estate investing companies
- hedge funds
- private investors
Each type of investor will have different buying criteria, so having a list of every kind of cash buyer is a good way to stay up-to-date.
To find these investors, try these marketing strategies for wholesaling real estate.
Build Your Own Cash Buyers List
Building your own list of Missouri real estate cash buyers is an affordable option for wholesalers with a smaller budget.
The first step to building your own list is to network with other real estate professionals. Start by joining virtual real estate networking groups on Facebook and other places.
These groups often hold virtual meetings where you can meet others, ask questions, and hear about other professionals’ experiences.
Another option is to get in touch with reputable Missouri real estate vendors who specialize in real estate wholesaling and investing.
Talk to Missouri lenders who work with Missouri real estate investors or connect with local contractors who work on flips.
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.
Leverage Other People’s Cash Buyers Lists
If you don’t have the time to build your own list of companies that buy houses in Missouri, but have a larger budget, you can leverage lists from other real estate professionals.
Many successful Missouri real estate wholesalers have created profitable real estate businesses by building relationships with cash buyers and local investors.
Leveraging these lists from other real estate professionals can fast-track your new business, but you should expect to pay the list owners up to 50% of your assignment fee.
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 Missouri cash buyers list 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 Missouri?
When wholesaling houses in Missouri by using the contract assignment method, you will need to have two signed contracts:
- contract to purchase real estate
- assignment contract
First, you and the motivated seller will sign a purchase contract, which lays out the seller’s information, the address, and the purchase price.
After you find an end buyer, the seller and buyer will then sign an assignment contract.
This contract keeps the entire transaction above board by ensuring the seller and buyer understand you are not buying the property yourself.
Once both contracts have been signed, you will give copies to the title company.
As we discussed earlier, double closing is the preferred method for wholesalers who want to keep their exact profits confidential from both the motivated seller and the end buyer.
To use the double closing method, you will need to show the title company two contracts:
- Contract to purchase real estate (by the wholesaler from the seller)
- Contract to purchase real estate (by the end buyer from the wholesaler)
Because double closing requires you to cover the property’s purchase price, you will need to have enough of your own cash or obtain transactional funding.
Transactional funding is a type of short-term loan that is usually for 24 to 48 hours and can be obtained from hard money lenders.
Do You Need a License for Real Estate Wholesaling in Missouri?
While you do not need a real estate license to practice wholesaling in Missouri, wholesaling with a real estate license can provide you and your business with extra legal protection.
As we discussed, wholesaling real estate in Missouri comes with certain limitations, but having an option of marketing property as a real estate agent gives your business more freedom.
Joining a Missouri real estate brokerage is the first step to becoming a licensed real estate agent.
Some brokers prefer agents who don’t practice wholesaling, so you should interview different brokerages to find a wholesale-friendly option.
If you are interested in getting licensed and want to learn more, read our guide on how to get a real estate license in Missouri.
What Is the Age Requirement for Real Estate Wholesaling in Missouri?
Missouri does not have an age requirement for wholesaling real estate. However, the United States requires individuals to be at least eighteen years old to enter a contract.
Because of this federal law, sellers and title companies will not work with wholesalers who are younger than that.
If you are interested in wholesaling but you are under eighteen, you can partner with someone older who can sign contracts on your behalf.
Do You Need an LLC for Wholesaling Real Estate in Missouri?
Missouri does not require wholesalers to have an LLC.
However, establishing an LLC can protect your business while giving you access to tax benefits and business loans you would not be eligible for as an individual wholesaler.
Furthermore, most real estate asset protection strategies recommend you create an LLC or other corporation type.
Finally, an LLC appears more professional than doing business as a solopreneur.
It can improve your standing within the Missouri real estate community and make your business more trustworthy to motivated sellers.
How Much Money Do You Need to Wholesale Real Estate in Missouri?
As far as real estate investment strategies go, wholesaling is the most inexpensive method.
You will need some marketing dollars to attract motivated sellers and find end buyers, but we discussed ways of mitigating those costs.
Apart from the necessary marketing dollars, you’ll also need about $1k-2k for an earnest money deposit.
You will also need transactional funding if you want to double close but do not have the cash.
Luckily, transactional funding does not require a high credit score or history of employment because it is a short-term loan.
You can find the best transactional funding in Missouri by using the “request financing” form on our website.
This easy-to-use form allows you to compare rates from various lenders with a single request.
How Much Money Can You Make Wholesaling Real Estate in Missouri?
How much you can make wholesaling real estate in Missouri depends on how much work you put into your business.
If you close on a $150,000 house, you can make anywhere from 10 to 15 thousand dollars from the assignment fee.
How much money you make a year will depend on how fast your business grows and how many deals you close.
Is the Missouri Real Estate Market Good for Wholesaling?
The market for wholesaling real estate in Missouri can vary depending on which city or neighborhood you are in.
However, you can get a general idea of the market by looking at the Missouri real estate investing market trends.
What Are the Best Cities for Wholesaling Real Estate in Missouri?
There are incredible wholesaling opportunities in towns and cities across Missouri. However, here are the top 10 Missouri cities for wholesaling real estate.
How to Learn Real Estate Wholesaling in Missouri?
We discussed the basics of wholesale real estate investing for beginners in Missouri, but you should learn more about the wholesaling process before getting your first property under contract.
Below are some effective ways to learn more about wholesaling so that you can start your new business venture.
Many successful real estate wholesalers are passionate about sharing their experiences with others.
These professionals have enough knowledge to develop courses that educate others on how to obtain financial freedom through real estate wholesaling.
While many seasoned experts develop excellent courses, there are also plenty of scammers looking to take advantage of newbies.
To avoid these scams and find effective courses, look through Real Estate Bees’ list of the best wholesale real estate courses on the market.
Real Estate Wholesaling Mentors
A real estate wholesaling mentor can provide you with valuable step-by-step guidance when you are just starting your business.
Hiring a mentor allows you to work directly with an expert so that you can keep your business on track and avoid making costly mistakes.
Team up with one of the best Missouri real estate investment mentors or coaches to create an effective business plan, set goals, and choose your marketing strategies.
If you are looking for an accessible and affordable way to learn more about real estate wholesaling, reading books is the way to go.
Two books to start your journey are:
- The Beginner’s Guide to Wholesaling Real Estate by Jeff Leighton
- The Real Estate Wholesaling Bible by Than Merrill
This list of the best real estate wholesaling books has even more great options.
Missouri has numerous investor clubs with active members that you can join to learn more about wholesaling.
Investor clubs are led by seasoned real estate investors with plenty of wholesaling experience who are passionate about helping others.
Attending clubs can fast-track your business and help you find cash buyers for wholesaling real estate.
Finding the right club can take time, but you can start by checking out Real Estate Bees’ list of real estate investor clubs in Missouri.
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.