Leads 2 Deals

Ready to take your first steps?

Looking to make money in real estate without a huge investment? Real estate wholesaling may be the perfect fit for you! Our beginner's guide to real estate wholesaling is the ultimate resource for those new to the game, providing step-by-step guidance on how to find, negotiate, and close deals. Learn the insider tips and tricks that successful wholesalers use to make profitable deals, all in one comprehensive e-book. Take the first step toward your financial freedom and start your real estate wholesaling journey today!

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Wholesale Real Estate For Beginners: What Is It & How Do I Start?

You might have more in common with a real estate investor than you think if you like to stay current on market trends, read reputable real estate blogs, or are an HGTV junkie. Maybe you've been thinking about a real estate job for a while but haven't taken the plunge. You might have even been on the verge of putting an offer on a house, but you decided against it because you were too terrified to move further. Real estate wholesaling or wholesale real estate may be the answer for you if any of the aforementioned statements apply to you.

What is Real Estate Wholesaling?

Real estate wholesaling is simply putting a property under contract, aka Purchase Agreement, and then selling that Purchase Agreement to a Real Estate Investor for a profit. As a wholesaler, you're not actually selling the property itself, but rather, your interest in that property.

This works because whilst under contract you, the wholesaler, have exclusive rights to buy that property. Ultimately what you're selling to the investor is your Purchase Agreement with the seller.

How do I get started?

Wholesaling hinges on identifying distressed properties with enough equity, or opportunity, to make a profit. As a budding wholesaler, you should be looking for properties with obvious signs of distress.

Distress takes many forms. The most obvious, is physical. A physically distressed property can be identified by driving or walking your local market and looking for properties that are obviously abandoned, have unkempt front yards, broken or boarded up windows, tarp on the roof, piled up mail, etc.

In the beginning, this is the simplest and cheapest way to start wholesaling.

⬆️ How to start identifying properties in your local market ⬆️

I've got my list. Now what?

Now that you've got a list of properties, it's time to get in contact with the owner.

You can find the owner's info by checking the county records online and searching the property address. After you've identified the owner you can find their contact info for free at truepeoplesearch.com

Once you've got the Owner on the phone, you have to identify the "Four Pillars" to qualify the lead.

Motivation - Why are they selling?
Timeline - How quickly do the want to sell?
Asking Price - How much $$ are they looking to get for the property?
Property Condition - What repairs does the property need to make it livable or to be able to sell it for full market value?

But, where's the profit?

Now that you've spoken with the seller and identified the "four pillars," you have to figure out what you need to offer for the property in order to be able to "assign" your contract for a profit.

This is done by finding at least three, but preferably four, comparable sales in the area, usually within half a mile of the subject property, to determine the ARV, or "After Repair Value." This is the number that tells you what the house could be sold for to a retail buyer after it's been fully renovated.

The standard formula for figuring out your MAO, or "Maximum Allowable Offer," is:

((ARV - Repair Costs) x 70%) - "Assignment Fee" = MAO

example: (($250,000 - $30,000) x 70%) - $10,000 = $144,000

You would need to get the property under contract for $144k. After you've got it under contract, you would then "assign" your contract to an investor for $155k.

Because you've got the contract for $144k and you've now assigned your contract for $155k, you keep the difference at closing for $10k profit!!