Intro to Real Estate Wholesaling
​​What is Real Estate Wholesaling?
Real estate wholesaling is the business of finding discounted properties and passing those deals along to real estate investors for a fee. Wholesalers act as middlemen, connecting motivated sellers with cash buyers and profiting from the assignment or resale of the purchase contract. Wholesalers can make $5,000 to $25,000 or more per deal! 💰💰💰
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Unlike flipping or buying rental properties, wholesaling allows you to earn money with very little (or zero!) capital.
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You don't have to live in the city where the property is, don't ever even need to visit the property, and don't need to be present at closing. Using our tools, the entire process can be done from your home (or even on-the-go!)
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The process looks like this:
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Identify a property being sold by a motivated seller. (Use a free tool to easily find these.)
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Contact the seller to evaluate the property condition, estimate value, and make an offer. (Use our tools to compute deal values.)
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Put the property under contract at a price below market value. (Use our contracts & fill in the details.)
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Find a cash buyer who is willing to purchase the contract for a higher price after adding your fee. (Connect to one of our networks of buyers.)
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Assign the contract to the buyer and collect your assignment fee at closing. ​​​​​
Why Wholesaling Works
Wholesaling solves a problem in the real estate ecosystem:
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Sellers get fast, hassle-free solutions to problems like foreclosure, divorce, inherited property, or vacant homes.
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Buyers (usually flippers or landlords) get access to below-market deals that help them meet their investment criteria.
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Wholesalers profit by facilitating the transaction and managing the moving pieces.
Because wholesalers don’t need to buy or renovate the home themselves, the capital and risk requirements are much lower compared to traditional investing.
Learn everything about Wholesaling with our Wholesaling 101 guide
Process Overview
Below is an overview of the wholesaling process and the tools you need. For complete details, get our Wholesaling 101 guide, where we dive into every step to find your first deal and close it fast. You could be pocketing $5,000 to $25,000 a deal within a short period of time! 💰💰💰
Want all of the tools, including Wholesaling 101 and a live onboarding session with our team? Check out our Mega Pack.
â‘ Get Organized & Assemble your Toolkit
Figure out how you are going to communicate with prospects and keep things organized.
A Customer Relationship Management (CRM) tool is a must have. You may be juggling multiple properties at the same time. You need somewhere to capture all of the information and status of your leads.
Consider getting a phone number to use to call or text prospects, sellers, cash buyers and other contacts. Buy numbers in the markets you are operating in.
â‘¡ Pick your target market(s)
Are you looking for properties where you live, or are you interested in working with properties outside of your local area? Find the areas that you want to find potential sellers.
â‘¢ Get Leads Through Cold Calling
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Use a tool to research your target, and identify the type of property and seller you want to target. Distressed property? Vacant? Tired Landlord? Gather a list that you want to call. Make sure they are all off-market, i.e., not listed on the MLS.
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Do Skip Tracing on your list to get the phone numbers of your prospects.
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Call the property owner to get their motivation level and interest in selling their property.
Learn what to say with our Real Deal Call Scripts. -
Send text messages for initial connect or followups.
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We can help you make those calls with confidence, and close the deal fast. Sign up for a Coaching session with our master closer.
â‘£ Buy Leads
Skip to the front of the line, save yourself time with no cold calling. You can have leads in your hand today. Buy off-market leads.
Note: Though this overview focuses on leads generated from cold calling or from purchasing leads, there are other methods of lead generation such as Driving For Dollars, Bandit Signs, and SMS campaigns. Learn more in Wholesaling 101.
⑤ Analyze the Property
Your seller either has a price in mind or they want you to make an offer. To understand what's a fair offer for you to make your assignment fee and for a buyer to make a profit, you'll first need to determine the After Repair Value (ARV) of the property by looking at comparable properties in the neighborhood. Then determine the Maximum Allowable Offer (MAO) that you will offer to the seller. Our Calculator can help you establish these key values.
â‘¥ Acquire the Property
Your seller is interested and motivated to sell. You make them an offer and they accept. Time to get them under contract with a Purchase and Sale agreement.
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Open escrow with your Title Company. Send the Purchase & Sale Agreement along with your earnest money deposit.
Tools
⑦ Dispose the Property
Now that the Purchase and Sale agreement is signed by everyone, you're on the clock to find a buyer to assign the contract to. Find a buyer through one of our buyer networks, and through social media groups.
⑧ Assign the Contract
Once you have a buyer, you'll assign the original purchase & sale contract to them. If you are doing a double close, you'll use a second purchase & sale agreement between yourself and the buyer since you will briefly be taking ownership of the property.
⑨ Close the Deal & Get Paid 💰💰💰
Schedule the closing with the Title Company. Once complete, they will wire your assignment fee to your bank, or issue a check.