How To Wholesale Real Estate In Louisiana: Step-By-Step (2024)

Wholesaling is a low-stakes and lucrative form of real estate investing. If you have been looking for a way to earn more money and achieve financial success, wholesaling may be your golden opportunity. This guide will show you how to wholesale real estate in Louisiana.

• What Is Wholesaling Real Estate?
• How To Wholesale Real Estate In Louisiana (9 Steps)
• Is Wholesaling Houses Legal In Louisiana?
• How Much Do Real Estate Wholesalers Make In Louisiana?
• Do You Need A License To Wholesale Real Estate In Louisiana?
• Is Wholesaling In Louisiana Easy?
• Final Thoughts On Wholesaling In Louisiana

Louisiana, the home of Cajun cuisine and Mardi Gras has a lot to offer. The state contains everything from historic listings in charming urban locations to waterfront properties.

Best of all, Louisiana real estate is some of the most affordable on the market. Louisiana has the 10th lowest average home price in the nation, ranking above both Michigan and North Carolina.

Louisiana is home to a population of just over 4.6 million people. Nearly a quarter of the population lives in the state’s five biggest cities, which include New Orleans and Baton Rouge. According to the Louisiana Travel Association, more than 41 million tourists visit the state every year.

If you’ve been waiting to get into the Louisiana real estate business, there is no time like the present! The Pelican State’s affordable yet competitive housing market is cooling after a multi-year growth streak. This is a great time for investors to enter the market and snap up some fantastic real estate deals.

*Before we begin our guide on wholesaling in Louisiana, we invite you to view our video on How To Wholesale Real Estate Step by Step (IN 21 DAYS OR LESS)!

Host and CEO of Real Estate Skills, Alex Martinez, provides a comprehensive, step-by-step guide for beginners to start wholesaling real estate!

What Is Wholesaling Real Estate?

On the surface, professional real estate wholesalers appear to act as middlemen connecting real estate investors with motivated sellers. In practice, wholesalers are able to do this without a real estate license because they function as the principal buyer during the transaction.

While under contract to purchase a property, the original buyer "wholesales" the property to a new buyer in exchange for an assignment fee. Unlike a real estate agent who earns a sales commission, usually a percentage of the purchase price, wholesalers charge the end buyer a flat fee for the rights to the wholesale contract.

Traditional real estate transactions involve home buyers, home sellers, and sometimes real estate agents. While this process works well for straightforward real estate deals, it can be too time-consuming for real estate investors, who are often managing multiple properties at a time.

Likewise, many real estate agents only represent buyers and sellers looking for move-in-ready properties. This makes it difficult for owners of distressed properties to find buyers.

Thus, the niche of wholesaling serves a valuable need in the world of investment real estate. Investors are always looking for their next deal, and wholesalers are a reliable source of investment properties.

Read Also: What Is Wholesale Real Estate? The Ultimate Guide For Investors

How To Wholesale Real Estate In Louisiana (9 Steps)

While there are various ways to complete a wholesale real estate deal in the Pelican State, here’s our proven process for closing your first transaction without spending a dime on marketing.

With that in mind, here's our simple step-by-step process for wholesaling real estate in Louisiana:

1. Partner With A Wholesale Mentor
2. Learn Louisiana Real Estate Wholesaling Laws & Contracts
3. Understand The Louisiana Real Estate Market & Lingo
4. Build A Cash Buyers List
5. Find Motivated Sellers & Distressed Properties
6. Put Distressed Properties Under Contract
7. Assign The Contract To Cash Buyer
8. Close Deal And Collect Assignment Fee
9. Double Close Or Wholetail When Necessary

Read Also: Wholesaling Real Estate: Step-by-Step PDFs [FREE DOWNLOAD]

1. Partner With A Wholesale Mentor

Wholesaling real estate is a fantastic entry into the real estate industry as it doesn’t require a significant amount of upfront investment. Wholesaling does involve contracts and legal agreements, which can lead to expensive mistakes if not performed properly.

Before entering any deals, beginners in the wholesaling business should find a more experienced mentor.

Wholesale mentors are real estate professionals with years of experience executing wholesale deals. They have a vested interest in helping newcomers avoid common mistakes and supporting them as they build their businesses from the ground up.

You can find a mentor through a wholesaling community, real estate investor association (REIA), or an educational program like the Pro Wholesaler VIP Program.

Read Also: The Best Wholesale Real Estate Course (With Step-by-Step Training)

2. Learn Louisiana Real Estate Wholesaling Laws & Contracts

As with other real estate transactions, wholesaling is regulated by state laws. The Louisiana State Legislature outlines regulated real estate activities in the following statutes:

•  RS 37:1436
•  RS 37:1446

Wholesaling real estate is exempt from licensing requirements because wholesalers are not selling properties or representing another party. Instead, they are temporarily taking possession of the property through a contract and then assigning their rights to the final buyer.

Having the right contracts in place prevents misunderstandings between the buyer, seller, and wholesaler. It also ensures that the wholesaler is in compliance with Louisiana law. 

Violating licensing laws has serious consequences. Wholesalers can run afoul of regulations by performing any of the following activities:

• Advertising a property online or in print
• Marketing a property as their own without a title
• Not alerting the seller of the intention to wholesale
• Claiming to be a REALTOR, real estate agent, or representative of the buyer or seller

Engaging in any of these activities can lead to fines, voided contracts, and even lawsuits. Don’t take a chance when it comes to your wholesaling business. Before carrying out any agreements, review all contracts and terms with an experienced real estate agent or lawyer.

Read Also: Is Wholesaling Real Estate Legal In Louisiana?

3. Understand The Louisiana Real Estate Market & Lingo

To secure the most profitable wholesale deals, you must be able to identify properties in desirable locations selling for under their market value. This would be impossible to know if you don’t have a sound understanding of the local real estate market.

Research Louisiana real estate step by step. First, narrow your search down to a specific county or city. While there is always demand for housing in New Orleans and Baton Rouge, even housing prices in smaller cities have experienced growth in the last few years. All of these areas are full of potential for real estate investors.

You will also want to be aware of the trends impacting the local housing market. According to the latest data, Louisiana remains a seller’s market despite a more recent cooldown. While home prices overall are below the national median, listing prices range widely by county. The median home price in Orleans County, which includes the Big Easy, is $150,000 more than in Caddo County.

Louisiana’s housing market also varies at the city level The housing market is strong in both Baton Rouge and New Orleans. In New Orleans, tourism has caused a boom in the short-term rental market. However, investors must keep an eye on local regulations, as new ordinances may ban short-term lets in certain areas.

The Louisiana Association of REALTORS is a great resource to learn more about the state’s real estate market. You can find other relevant agencies and organizations below:

• Louisiana Real Estate Commission (LREC)
• Louisiana Office of Real Estate
• New Orleans Real Estate Investors Association

4. Build A Cash Buyers List

The key to being a successful wholesaler is being able to quickly assign property contracts to real estate investors. To achieve this, you will need to create a strong network of cash buyers.

Cash buyers are individuals or institutions that invest heavily in real estate. They may be investors looking for rental income or flippers interested in renovating the home and making a profit. These buyers usually have large sums of cash on hand to invest in good deals. They can close a deal quickly without a bank loan or financing from hard money lenders.

You can build up your buyers list in several ways. You can tap into your wholesaling mentor’s network and find leads. You can also participate in industry events or join social media groups focused on real estate investing. You can also work with local real estate agents and act as a referral for wholesale deals.

Read Also: [FREE SCRIPT] How To Talk To Cash Buyers & Find Their Buying Criteria

5. Find Motivated Sellers & Distressed Properties

Buyers are just one side of the equation. You must also locate properties ideal for flipping. The most lucrative deals are distressed properties in high-demand locations.

Distressed properties enter the market in two ways. The first is through motivated sellers. Motivated sellers are individuals who must sell their properties quickly. This could be because of an impending foreclosure or a need for liquidity. Homeowners may also want a fast deal to move on to the next chapter of their lives. Whatever the reason, motivated sellers are much more likely to reduce their asking price to well under market value.

Banks may also sell distressed properties. When homes go into foreclosure, the bank attempts to recoup its investment by selling the properties at auction. Homes that do not sell are labeled distressed and can sell for a deep discount.

You can find listings of ideal wholesale properties by scouring foreclosure notices and other public records.

Be mindful of what is and isn’t a good deal. Consider how much other homes in the area sell for. This will greatly affect how much your end-buyer can get for the property. Likewise, until you have more experience, avoid properties that require costly renovations.

A big project means higher risk and can eat into a home flipper’s bottom line if the rehab goes sideways, making the deal less attractive to prospective buyers.

Read Also: How To Talk To Motivated Sellers [FREE SCRIPT DOWNLOAD]

6. Put Distressed Properties Under Contract

The first step of closing wholesale deal is making a purchase contract or purchase agreement with the home seller. When you close the deal with the buyer, you will sell them this contract, not the property itself.

In order to do so, you must ensure that your contract is assignable, meaning you can transfer the terms to another person. You should always review your contracts with a real estate attorney and double-check that all parties are in agreement with the terms.

When you find a good deal, you will need to make an offer that will reap a profit for both you and your end buyer. You can estimate this amount by calculating the Maximum Allowable Offer, or MAO. The MAO considers the cost of improving the home, closing costs, and its potential market value.

Here is what calculating the MAO Formula should look like:

After Repair Value - Rehab Costs - Desired Profit - Wholesale Fee = MAO

For more clarification, here is a rundown of the different figures in your MAO formula and suggestions on how to attain each figure.

• After Repair Value: ARV is the amount the home could sell for after renovations. Use real estate comps and other market information to make an estimation.
• Rehab Costs: This is the investment your end-buyer will make to upgrade the property. A general contractor can provide you with a reasonable estimate.
• Desired Profit: This is the profit for your end-buyer. Depending on your client, this figure may be as much as a 50% return on investment. The higher the desired profit, the more likely you will find a buyer for your deal.
• Wholesale Fee: This is your profit for the wholesale deal. You can set this to as much as you want. However, if you want to make a fast deal, you will need to charge a fee that allows your buyer to earn a sizable profit.

Once you have your MAO formula solidified, you can make your offer and negotiate from there, if necessary.

Read Also: Free ARV Calculator: After Repair Value Estimator

7. Assign The Contract To Cash Buyer

Once the seller accepts your price and you sign a purchase agreement, you can assign the contract to the end buyer. Most wholesalers try to keep this process as short as possible.

Ideally, the contract should transfer from the wholesaler to the end buyer within your inspection period, and certainly before contingencies are removed.

8. Close Deal And Collect Assignment Fee

Now that the property is in the hands of the end buyer, the transaction is over. You can collect your assignment fee from the buyer and move on to the next deal. Enjoy the rewards of your hard work!

Let your cash buyers list know about your recently closed deal so that they are chomping at the bit next time you have an attractive opportunity.

9. Double Close Or Wholetail When Necessary

Wholesaling deals can also take two other routes. If you don’t want to possess the property for an extended period, you can do a double close. During this transaction, the wholesaler purchases the distressed property and then resells it to the end buyer in fast succession - ideally on the same day 

The end-buyer funds may be held in escrow by a title company and transferred to the original seller for the first closing on behalf of the wholesaler. While this can lower some of the risks for the wholesaler, not every title company offers this service. Alternatively, the wholesaler will need to front the cost of the purchase, which requires significant capital.

What Is "Wholetailing?"

Another option for wholesaling real estate is wholetailing. You can make minor upgrades to the property while it is in your possession before advertising it on the market and selling it to the next buyer.

This may make your deal more attractive for investors and increase your profit. This strategy also gives you the luxury of time so you can find the right end buyer willing to pay top dollar.

Is Wholesaling Houses Legal In Louisiana?

Wholesaling is completely legal in Louisiana as long as all state laws are followed to the letter. This means that you should not perform any real estate activities that require licensing. This includes marketing the property, representing the seller, or selling assets on behalf of another party for consideration.

To make sure you are abiding by state rules and regulations, it’s a good idea to familiarize yourself with the Louisiana Real Estate Commission Rules and Regulations.

While wholesaling is legal, amateur sellers may run into complications due to poorly written contracts. For this reason, double-check with a legal professional to ensure that all agreements between you, the seller, and the buyer are valid.

How Much Do Real Estate Wholesalers Make In Louisiana?

According to Rocket Mortgage's public data records, the average payment for a real estate wholesale fee is usually 5% - 10% of the total property price nationwide.

Real estate wholesalers can make as much or as little as they want. Some make six figures per year while others struggle to make any money at all. It all depends on how much time you can spend learning the craft.

If a wholesaler in Wisconsin finds a buyer for a $150,000 property, then the wholesaler has the potential of making a $30,000 profit legally without even having to own the property themselves. 

Read Also: Wholesale Real Estate Salary: How Much Can You Make Wholesaling?

Do You Need A License To Wholesale Real Estate In Louisiana?

In Louisiana, you can wholesale, double close, and wholetail real estate without a license. Wholesaling is exempt from licensing requirements because the wholesaler is in possession of the property or has an equitable interest in the contract. Under the law, the wholesaler is acting as a seller and a buyer, not a representative.

However, there are some benefits to holding a real estate license. You can gain access to properties on the MLS, a real estate database that is not open to the public. You will also be able to advertise your wholesale properties directly to buyers. This may facilitate deals.

As in most states, the Louisiana Real Estate Commission regulates licensing. You can learn more about the real estate licensing process on the commission’s website: LREC Obtain a License.

Is Wholesaling In Louisiana Easy?

No, wholesaling in Louisiana is not easy. Wholesaling in any real estate market requires commitment, dedication, and expertise. At the same time, anyone who is willing to put in the hard work can turn wholesaling real estate into a money-making and rewarding venture.

While you will always need to put effort into your wholesaling business, you can reap significant returns on your time and capital investment.

Starting out your journey into the business with a training and mentorship program like the Pro Wholesaler VIP Program can accelerate your success. You’ll avoid common pitfalls that snare beginners and hit the ground running on building your network and identifying ideal properties.

The Pro Wholesaler VIP Program is designed for the modern entrepreneur to learn the basics and how to help new real estate wholesalers avoid the pitfalls typically found by beginners. It is 100% online and is used for local and virtual real estate wholesaling.

This comprehensive program guides you step-by-step through the process so you can more easily establish success in your wholesale endeavors.

Moreover, the Pro Wholesaler VIP program gives you full access to a national network of seasoned real estate professionals and investors who can answer questions, joint venture with you on deals, and help mentor you on your wholesaling journey.

Final Thoughts On Wholesaling In Louisiana

While this guide offers a great roadmap on how to wholesale real estate in Louisiana, it is far from comprehensive. You will need to do a lot of research on your own and forge your own connections with other wholesalers, agents, and real estate investors.

Wholesaling real estate is not limited to residences. There are lucrative opportunities in wholesaling commercial real estate, multi-family units, and even undeveloped land across Louisiana.

If you’re interested in the real estate industry but are not ready to manage multiple properties, a wholesaling business may be the right choice for you.

You can learn more about wholesaling through our free online training today and find out how you can get your foot in the door using only your cell phone and laptop.