December 2012, Packers vs. Titans. A kickoff comes up short and rolls toward the sideline near the Green Bay 4-yard line. Randall Cobb doesn't pick it up. He puts one foot out of bounds, reaches down and touches the ball.

Flag. Packers ball on the 40.

The rule: if any part of a player is out of bounds when he touches the ball, the ball is out of bounds too, and a kickoff out of bounds is a penalty on the kicking team. Thirty-six free yards for knowing one sentence in the rulebook. If you didn't know the rule, you'd swear he cheated.

I've been doing this in Louisville for 13 years, and most of what I hear called "shady" in real estate is the same thing. Somebody did something completely legal that the other side didn't know was allowed. Four I see trip people up all the time:

1. The buyer usually picks the closing company. RESPA (the Real Estate Settlement Procedures Act), Section 9, says a seller can't require you to buy title insurance from a particular title company as a condition of the sale. When a buyer's contract names their own title company, nobody's pulling anything. That's the rule.

2. Buying in an LLC or a land trust isn't hiding. It's how a lot of investors hold property, for liability protection and privacy. Legal and normal. Sellers sometimes get nervous when they see an entity name on the offer. They shouldn't.

3. Kentucky changed the wholesaling rules in 2023. House Bill 62 made publicly marketing a contract on a house you don't own count as real estate brokerage. Blast an assignment contract to a buyers list without a license and you're looking at a possible cease-and-desist from the Kentucky Real Estate Commission, a contract that can be voided, title companies that won't close it, and possible misdemeanor exposure. A lot of people still haven't caught up on this one. If you wholesale in another state, check yours. Several have passed similar laws.

4. Contract deadlines are the whole game. Inspection, repair response, financing, appraisal. Every one has a clock. Miss it and the protection it gave you can be gone. Nobody cheated. A clock ran out.

Why this matters more than people think

The investor world in any one city is big, but it's also small. The people actually moving deals every month (lenders, title attorneys, rehabbers, property managers, the hard-money guy everybody calls) all know each other. Malcolm Gladwell writes about Dunbar's number, the idea that we can only keep real relationships with about 150 people. A local investing scene works a lot like one of those 150-person villages.

So when someone gets outed as a bad actor, everyone knows. Not in a year. By Friday. And the flip side is true too: people who don't know the rules sometimes get labeled as bad actors when they just didn't understand what the other side was doing. Both are expensive.

A prompt worth stealing

The good news is you don't have to learn every rule by getting burned anymore. Some of the newer investors I work with use AI to cover their blind spots. Here's one you can paste into ChatGPT, Claude or whatever you use:

Then take what it gives you to your agent, attorney or title company and confirm it for your state. It's a checklist, not legal advice.

What's a rule you learned the hard way, or one you wish someone had explained to you before your first deal?