How To Wholesale Real Estate In Nebraska: Step by Step (2023)Jul 07, 2023
With its wide-open prairies and rolling farmlands, Nebraska is a sight to behold. It’s also home to a diverse culinary scene, and Omaha is a treasure trove of vibrant musical talent. More importantly, Nebraska is a gem for real estate investing.
Currently, Nebraska is enjoying a buyer's market in real estate. In fact, the president of the Nebraska Realtors Association commented recently that while interest rates are still relatively high, available housing units are on the rise. This means properties are selling more closely at market value than overpriced as they were previously.
Moreover, Nebraska’s population is on the rise, and the city of Omaha is anticipated to exceed 1 million by next year. And with any increase in population, real estate must follow suit. This equates to big opportunities for real estate investors and wholesalers alike.
With this in mind, read further about how you can take advantage of improving trends in Nebraska’s real estate market by learning about how to wholesale real estate in Nebraska and how it could be a lucrative venture for you.
- What Is Wholesaling Real Estate?
- How To Wholesale Real Estate In Nebraska (9 Steps)
- Is Wholesaling Real Estate Legal In Nebraska?
- How Much Do Real Estate Wholesalers Make In Nebraska?
- Do You Need A License To Wholesale Real Estate In Nebraska?
- Is Wholesaling In Nebraska Easy?
- Final Thoughts On Wholesaling In Nebraska
What Is Wholesaling Real Estate?
Simply put, real estate wholesaling is when you get a contract on a property from a homeowner or seller. Then, you turn around and sell that contract to an investor or cash buyer.
Wholesaling is attractive to a lot of people because, in its truest form, it doesn’t involve making repairs to the house for a flip or sitting on a costly piece of property until you find the right buyer.
This type of real estate transaction offers big rewards on a short-term investment because the purchase and sale of the equitable rights (the contract) usually takes place very quickly - sometimes within the same day.
Wholesalers make money by selling the real estate contract at a higher price than it was purchased. Money is made by either charging the end buyer an assignment fee upfront or by buying the property and then quickly selling it for a profit.
The best wholesale real estate opportunities are found in distressed properties or foreclosures which are below market value. This is because homeowners are typically motivated to get out from under the property and, in their eagerness to sell, often aren’t looking for a profit.
How To Wholesale Real Estate In Nebraska (9 Steps)
New wholesalers in Nebraska might get a little star-struck when they realize they can stand to earn big bucks on real estate deals with minimal effort. However, as with anything, it takes work. It also takes strategy.
With this in mind, here is a step-by-step guide to mastering your real estate wholesaling skills. Be sure to check out our in-depth video showing you how to wholesale real estate step by step here:
With that in mind, here's our simple step by step process for wholesaling real estate in Nebraska:
- Partner With A Wholesale Mentor
- Learn Nebraska Real Estate Wholesaling Laws & Contracts
- Understand The Nebraska Real Estate Market & Lingo
- Build A Cash Buyers List
- Find Motivated Sellers & Distressed Properties
- Put Distressed Properties Under Contract
- Assign The Contract To Cash Buyer
- Close Deal And Collect Assignment Fee
- Double Close Or Wholetail When Necessary
1. Partner With A Wholesale Mentor
You can’t expect to be a brain surgeon without a teacher and education - the same holds true for becoming a wholesaling expert. It’s crucial to partner with an ally in the real estate industry. In fact, having a mentor in the highly competitive housing market can mean the difference between success or failure.
To explain, a wholesale mentor is someone who has “been in the trenches.” They know the industry and can be invaluable in helping you learn the tricks of the wholesaling trade. Furthermore, a good mentor should have their finger on the pulse of Nebraska real estate - which means they can help you find investors and lenders. They can also help you identify optimal wholesale properties, provide tips on drawing contracts, and even help you create a smart exit strategy for your wholesale deals.
Ideally, you’ll want to partner with experts in the field, such as realtors or real estate brokers. You’ll also want a mentor who has experience in wholesaling real estate. You can find these special people by getting on social media streams that cater to the professional real estate community. Consider joining real estate groups in your area. From Kansas to Iowa, South Dakota to Omaha, NE - there are tons of real estate associations, meetups, and discussion forums where you can connect with a solid mentor.
2. Learn Nebraska Real Estate Wholesaling Laws & Contracts
Every state has its own rules and regulations when it comes to wholesaling real estate, and Nebraska is no different. With this in mind, you need to familiarize yourself with the state’s laws before pursuing your first investment property. You should consult the Nebraska Real Estate Commission to clarify what exactly is legal and illegal when conducting wholesale real estate deals and drawing up contracts with sellers and buyers.
Failure to comply with the state laws could mean hefty penalties and fines for you, as well as losing current or future deals - not to mention damaging your reputation as a legitimate wholesaler within the real estate community.
What is most important for new wholesalers is to understand that there are certain things you can and cannot do without a Nebraska real estate license or broker’s license. Namely, a wholesaler is free to market or sell the equitable rights of a property without a license. However, it is illegal to market or sell the actual real estate without a license.
Wholesale contracts to the seller and assignable contracts to buyers are typically straightforward. In fact, there is a myriad of wholesale contract templates online that make drafting these documents pretty simple. Nonetheless, it is highly advisable that new wholesalers retain advice from a seasoned mentor or a real estate agent during initial transactions and contracts. Having an expert who knows the laws could mean avoiding serious repercussions.
3. Understand The Nebraska Real Estate Market & Lingo
Every niche and industry has its own terminology while conducting business - and real estate is no different. For instance, if you’re not familiar with acronyms such as MAO, ARV, or MLS - it’s time to get studying. This is when your mentor or a real estate wholesale training program can be priceless.
Training or mentorship can put you on the fast track to learning the terms, abbreviations, and lingo you need so you appear knowledgeable and accomplished while making deals with either sellers or buyers.
You also need to invest a significant amount of time and energy in understanding the Nebraska real estate market. Your mentor can help you with this as well. However, it’s best if you keep track of market trends daily on your own time. Consider joining a real estate association in your area, such as the Omaha Area Board of Realtors.
We also recommend joining the Nebraska Realtors Association for vital information about the state’s current real estate market. These and other realty associations can keep you up to date about real estate market trends and market values. Knowing this information will give you key information that will allow you to shrewdly price your deals (and ultimately win more profit).
Read Also: Can You Wholesale MLS Properties?
4. Build A Cash Buyers List
At this point, you’ve educated yourself about the lingo and the real estate market in Nebraska. Hopefully, you’ve located a coach or mentor to help you with these details. So, now it’s time to build your cash buyers list. This is a list of potential investors who have fast access to money so you can ultimately sell the equitable rights to your property quickly.
Ideally, you want cash buyers because it makes for a short turnaround and the transactions are less complicated without involving lenders.
There are several ways you can go about building your buyers list. Remember that this list is for people who want to quickly buy the rights to a property and then turn around and sell that contract to an end buyer. Therefore, think about this mindset and target that demographic.
For instance, you can connect with house flippers, as they are always on the prowl for cheap homes they can renovate and sell to end buyers. You might also approach attendants at property auctions where people buy foreclosures for flipping purposes. Calling investors is also a solid plan, but the more creative you are - the more useful your list will be.
You can also check out this video on how to find cash buyers!
5. Find Motivated Sellers & Distressed Properties
In this step, you’re actively searching out people who are looking to wash their hands of a home or property. To elaborate, motivated sellers often want to get clear of back taxes or unwanted properties in foreclosure.
In other instances, a homeowner might have a distressed property but might not have the money or resources to repair it. In most cases, motivated sellers are dealing with an albatross of a property and just want it off their neck - even if that means they aren’t making a profit on the home.
The internet can be your best friend when scoping out sellers and distressed properties. For example, you can sign up for a foreclosure service, which will provide you with lists of foreclosed properties in your area - including the owner’s information so you can contact them.
You might also want to get MLS access (Multiple Listing Service), which will provide you with new listings every week. Sites like Zillow or Redfin might also prove helpful in finding ideal wholesale properties. You can also check out Craigslist, which can be a good resource for finding off-market properties.
6. Put Distressed Properties Under Contract
You’ve brushed up on Nebraska’s real estate laws, learned the language, and built your buyers list. Then, you’ve landed a motivated seller who has agreed to partner with you. The next step is to put the purchase offer in writing and submit it to the seller.
There is a lot to consider before putting a property under contract, and calculating the best price is imperative. You want the seller to accept your offer, but at the same time, you want to make money too. So what should you do? The answer is figuring out the best price point that entices your seller, while simultaneously being attractive to your cash buyer and leaving you with a healthy cut too.
You’re first step in figuring out that all-important price point is the calculate the ARV of the property. ARV stands for “After Repair Value.” You get this figure by researching the values of recently sold homes in the surrounding area (aka real estate comps). Identify similar properties that have been rehabbed and sold, then make any needed price adjustments for your subject property.
Once you have your ARV figure, insert that into your MAO formula. MAO stands for “Maximum Allowable Offer.” As the name implies, it’s the most amount of money you’ll want to pay for the property.
This is how you assess your Maximum Allowable Offer:
Take your After Repair Value (ARV) and subtract renovation costs, holding costs, and sales costs from that figure. Then, subtract your cash buyer’s desired profit from that. If you’re wholesaling the deal, subtract your wholesale fee. The end result is your MAO.
Once you have determined your offer price, plug it into your purchase contract and submit your offer. For your first few purchase contracts, you may want to recruit assistance from your mentor or a real estate lawyer so you can ensure all the T’s are crossed and I’s are dotted.
7. Assign The Contract To A Cash Buyer
Once the purchase contract is finalized, it’s now time to assign the contract to one of your investors on your cash buyer list. The contract you present to a buyer is called an assignment contract.
An assignment contract is a legally binding document that transfers equitable rights under the original purchase agreement to the buyer. Essentially, it legally grants permission to the assignee to purchase the property.
When an assignment contract is finalized and the deal closes, the new buyer takes the title from the seller (not the wholesaler). Then the buyer can do with the property as they deem fit - in most cases - they often flip the property and resell it to another end buyer.
8. Close The Deal And Collect Your Assignment Fee
Congratulations, you’ve reached the step where the deal closes and you are finally paid for your efforts.
This is the part where the deal is funded by your cash buyer, your assignment fee is earned, and the seller is able to get rid of their property. Be sure to keep in touch with all parties involved to help ensure a smooth transaction.
9. Double Close Or Wholetail When Necessary
Sometimes the aforementioned exit strategy isn’t always an option. That’s when double closing or wholetailing can work to your advantage.
A double closing is, as the name implies - when you do two closings simultaneously. In simple terms, a double close is when a wholesaler purchases a distressed property outright, then turns around and sells it to the end buyer - typically on the same day. This can be an attractive scenario because, very often, a wholesaler can buy cheap and sell high. Plus, the potential to make a bundle on a double-close transaction within the same day is very appealing.
Just remember, you might have to fork out a hefty sum for the purchase of the property, plus any closing costs. Nevertheless, if you land the right price on a property and are able to turn around and sell it to a motivated end-buyer, you stand to make a windfall in a very short amount of time.
In a wholetail situation, you have a little more leeway and could stand to make a higher profit. Wholetailing is when you, as the wholesaler, purchase a distressed property. After purchase, you’ll make minor improvements to the property. To be clear, you’re not doing a full renovation as a flipper might do - just enough repairs or cleanup to make it more suitable for an investor.
You’ll then list your improved property on MLS, where ideally, an investor will see it and make you an offer. Then you sell the property to an investor. In this scenario, you’re afforded some time to find just the right end buyer. If you think about it, wholetailing is like a mashup of both wholesaling and flipping because you’re investing in slight repairs on a home to appeal to an end buyer, but you’re still making a wholesale transaction.
Is Wholesaling Real Estate Legal In Nebraska?
Yes. Wholesaling is legal in Nebraska as long as individuals comply with the existing regulations governing the process. Namely, wholesalers must be transparent and disclose that they are merely trying to sell their right to buy the property—not the property itself. Wholesalers are allowed to facilitate the assignment of contracts rather than engaging in conventional property transactions.
In Nebraska, however, there is a new law wholesalers must be aware of: LB892. Enacted in 2022, this legislation specifically addresses wholesaling and stipulates that “publicly marketing for sale an equitable interest in a contract for the purchase of real property between a property owner and a prospective purchaser” requires holding a valid real estate license, according to the Nebraska Real Estate Commission.
By strictly adhering to these laws and strategies, wholesalers operating in Nebraska can conduct their business in a legal and ethical manner. Aspiring wholesalers and real estate investors should prioritize familiarizing themselves with the legal requirements to ensure compliance and make the most of the opportunities that present themselves.
How Much Do Real Estate Wholesalers Make In Nebraska?
Once you get the hang of the process of wholesaling real estate, you’ll begin to see that the possibilities for earning potential are virtually limitless. When you consider that you stand to earn anywhere from $5000 - $10,000 per assignment fee, then you can easily figure out earning a desirable income with just a few transactions a month.
In truth, your earnings could potentially skyrocket to an enviable sum. Your income is directly contingent upon how many deals you close. So, let’s say you close on as little as one deal per month for around $10,000 profit - multiply that by 12 months, and you’re pocketing six figures annually!
Do You Need A License To Wholesale Real Estate In Nebraska?
No. Wholesaling real estate in the state of Nebraska does not require you to have a real estate license as long as you are conducting business within the legal letter of Nebraska state laws.
This means you can sell the equitable rights of a property, but you cannot sell the real estate itself (the actual property) without a license.
Nebraska Real Estate License Requirements
Very often, wholesalers opt to obtain a real estate license to improve their performance, learn more about the industry, have more flexibility with properties, and ultimately earn more money. If you feel like a real estate license would benefit your endeavors, here are the Nebraska state requirements:
- Complete two state-approved training courses (30 hours each).
- Complete a 6-hour Professional Conduct & Ethical Practice course.
- Earn a Certificate of Completion of Education from a state-certified school. This confirms you have completed training as mandated by the Nebraska Real Estate Commission.
- Send in your completed application for your Nebraska real estate license.
- Nebraska requires a fingerprint-based background check for all real estate agents working in the state
- You will also need to submit a written statement if you have any misdemeanors, felonies, convictions or pending criminal charges.
- Lastly, you need to take the Nebraska real estate licensing exam and pass the exam with a grade of 75% or higher.
Read Also: Can A Realtor Wholesale Property?
Is Wholesaling In Nebraska Easy?
Wholesaling can be extremely satisfying as well as very lucrative. However, it’s not easy. To become a successful real estate wholesaler in Nebraska, you’ve got to put in the time, energy, and research. You’ve also got to build your strategy, be organized, and be diligent.
While earning your stripes in the real estate wholesale game can be challenging, it can be much easier when you partner with a mentor or a coach. The right tutor can make all the difference in your success. Additionally, you can gain a superior advantage over others in the industry when you get comprehensive training as we offer with our Pro Wholesaler VIP Program.
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.
When you take advantage of our all-inclusive program, your setting yourself up for success. This is because our VIPs have access to step-by-step training, and guidance on best practices, and you even get to be a part of a national community with veteran real estate pros who can help you accelerate your wholesaling career.
Final Thoughts On Wholesaling In Nebraska
If you’re interested in entering the real estate industry, wholesaling is one of the best ways to start. Wholesaling real estate in Nebraska poses a shallow learning curve; it can be done remotely from your home office and is the quickest way to make money in real estate.
If you are a go-getter, good with people, enjoy being your own boss, and have the determination to earn money - then wholesaling in Nebraska could be your ideal business. Check out our brand new free training on how we help investors all across the country wholesale and flip houses from the MLS using only a laptop and a cell phone.