Wholesale Real Estate the Right Way With This A-Z Ultimate Guide

Real estate is red hot in the United States of America with millions of houses being sold last year and 2019 projected to be even bigger! That’s great news for people who are looking to get up and running with real estate investing.

Real estate investing embodies a wide variety of disciplines.

Buy and hold investing, fix and flips, REIT investing and more.

One of the most widely touted and low barrier ways to get into real estate investing is through a vehicle called wholesaling.

If you’ve heard of wholesale real estate before, chances are, you can still learn a thing or two from this guide. If you have no idea what wholesale real estate is, we’re about to open up a whole new world for you.

Below is an extensive overview of just about everything you need to know to get started with wholesaling!

What Does Wholesaling Real Estate Mean?

When you buy something at a wholesale price, it means that you’re buying something at the price stores purchase inventory from manufacturers at. In other words, you’re buying something at an astonishingly low, below general market price.

That’s basically the idea behind wholesale real estate.

As a wholesaler, you find rock bottom deals on proprieties both in the residential and commercial sectors (mostly in residential). You then get that house under contract (meaning you lock in the deal) and sell that contract to a buyer that’s interested in purchasing it.

You read that right!

When you wholesale real estate, you’re not actually buying anything! That big idea brings us to our next point…

How Much Money Do You Need to Invest in Wholesale Real Estate?

Wholesaling has a key advantage over just about every other type of investing… It costs you ZERO dollars.

Beyond money that you might want to invest in finding leads (more on that later) the actual process of wholesaling allows you to invest in a property and make money without needing to put a single penny into it.

All you have to do is find great deals and sell those deals to another party for an “assignment fee” which you get to dictate the price of!

Why Wholesaling Is a Great Entry Level Real Estate Investing Vehicle

If you’ve ever received a flyer from a “real estate guru” telling you that they can help you make millions in real estate, chances are, once you’ve gotten through all of the guru’s pitches, they’re going to tell you to wholesale real estate.

As a matter of fact, one of the most touted beginner investing vehicles within the whole construct of real estate is wholesaling.

There are a few reasons for this.

First, wholesaling doesn’t cost money which is attractive to new investors. Second, becoming a wholesaler allows you to develop a number of skills that translate well into many other facets of real estate investing.

As a wholesaler, you’ll become familiar with concepts like evaluating property values, working with agents, utilizing the MLS (if you have a realtor’s license), negotiating, and selling.

Bottom line… There’s no other facet of real estate that gives you as broad of exposure to investing as wholesaling does.

How Much Money Can a Wholesaler Make?

When you wholesale real estate, you give yourself the opportunity to make as much as you want while investing as little as you want. The amount you’ll ultimately walk away with comes down to two things…

How much you charge per assignment and how many deals you close.

Assignment fess, again, are variable from wholesaler to wholesaler. Some charge fees that hinge on the value of the house they’re selling. Others charge rates based on how good the deal is that they got under contract.

We recommend playing with your fee structure to see what works best in your local market. You can also attend your local chapter of real estate investment clubs and ask other wholesalers for tips.

As far as volumes of deals are concerned, your ability to put a ton of properties under contract and to sell those contracts before they expire comes down your ability to get a volume of high-quality leads…

How to Get Property Leads as a Wholesaler

Now that you understand everything there is to know about what it means to be a wholesaler, it’s time to understand ways to get inventory (properties under contract).

There are a lot of different methods successful wholesalers use to generate property leads. Below are a few of the most tried and true methods we think that you should explore.

Make Offers on the MLS

If you’re a realtor, you have direct access to the MLS which means that you’re the first person to know when a property hits the market. As a wholesaler, you should be making as many low-ball offers on the properties you see pop up as possible.

Don’t be afraid to make yourself blush when offering! The worst someone can do is say no.

Not a realtor? No problem.

Find a good agent to make low-ball offers for you or get your real estate license.

Keep an Eye Out for Old or Expired Listings

Whether it’s on the MLS or on real estate sites like Zillow, it’s worth your time to keep an eye out for listings that expire or that have been up for a long time.

If a listing expires, chances are you’ve got a desperate seller you might be able to squeeze. The same is true for a listing that’s been on Zillow for 60+ days.

Make low-ball offers and see what happens.

Drive for Dollars

Sometimes you have to get off of your butt and start scouring the neighborhood to find a good deal.

Get in your car and drive around to see if you find any “for sale” signs. You can also keep an eye out for houses that look distressed.

Sometimes an abandoned-looking property is a sign of someone who is short on cash and is willing to cut a deal.

Be sure to also consider contacting multi-family properties since buy and hold investors will line up to purchase those off of you. You can read more now about multifamily property investing.

Use Direct Mail

Every wholesaler we know sends out mailers to areas they like wholesaling in. These mailers say things like, “Will Buy Your House Now!”

You’d be surprised how quickly mailers like that will get your phone ringing and sales coming in.

How to Get Buyer Leads as a Wholesaler

Now that you have ideas on how to find houses to get under contract, it’s time to figure out how to sell those contracts to buyers.

Below are a few strategies worth trying.

Put Out Signs

When you have a house that’s under contract, put out signs in your area that say things like, “NEED TO SELL HOUSE FAST, CHEAP” or “CHEAP HOUSE FOR SALE, CASH ONLY”.

Signs always get phones ringing and chances are you’ll find a buyer.

Post in Investment Forums

There are investment communities like BiggerPockets where a ton of real estate investors hang out.

If you have a deal to sell, posting about it on forums within those communities could pique someone’s interest.

Contact Landlords

If you’re seeing “For Rent” signs in your neighborhood with a phone number, that may be a real estate investor’s phone number you can dial.

Give it a ring and see if the person on the other end would like to buy your property. If you get a property management company on the line, have the company deliver your message.

Social Media

People that wholesale real estate love social media because it’s a free and effective way to market listings.

Take some pictures of the property you have under contract and let your network know that it needs to go, fast!

Final Thoughts on Wholesaling Real Estate

When you wholesale real estate, you help a seller get money, you help a buyer find a great deal on a home and you get paid for it.

In our book, that’s a pretty sweet deal.

Just be sure to include the “assignment contingency” in any houses you get under contract. Without it, you may not be able to back out of a real estate deal if you can’t find a buyer.

If you’d like to learn more about investing, money management and everything in between, check out more of our content on Best Growth Stock today!

Real estate is red hot in the United States of America with millions of houses being sold last year and 2019 projected to be even bigger! That’s great news for people who are looking to get up and running with real estate investing.

Real estate investing embodies a wide variety of disciplines.

Buy and hold investing, fix and flips, REIT investing and more.

One of the most widely touted and low barrier ways to get into real estate investing is through a vehicle called wholesaling.

If you’ve heard of wholesale real estate before, chances are, you can still learn a thing or two from this guide. If you have no idea what wholesale real estate is, we’re about to open up a whole new world for you.

Below is an extensive overview of just about everything you need to know to get started with wholesaling!

What Does Wholesaling Real Estate Mean?

When you buy something at a wholesale price, it means that you’re buying something at the price stores purchase inventory from manufacturers at. In other words, you’re buying something at an astonishingly low, below general market price.

That’s basically the idea behind wholesale real estate.

As a wholesaler, you find rock bottom deals on proprieties both in the residential and commercial sectors (mostly in residential). You then get that house under contract (meaning you lock in the deal) and sell that contract to a buyer that’s interested in purchasing it.

You read that right!

When you wholesale real estate, you’re not actually buying anything! That big idea brings us to our next point…

How Much Money Do You Need to Invest in Wholesale Real Estate?

Wholesaling has a key advantage over just about every other type of investing… It costs you ZERO dollars.

Beyond money that you might want to invest in finding leads (more on that later) the actual process of wholesaling allows you to invest in a property and make money without needing to put a single penny into it.

All you have to do is find great deals and sell those deals to another party for an “assignment fee” which you get to dictate the price of!

Why Wholesaling Is a Great Entry Level Real Estate Investing Vehicle

If you’ve ever received a flyer from a “real estate guru” telling you that they can help you make millions in real estate, chances are, once you’ve gotten through all of the guru’s pitches, they’re going to tell you to wholesale real estate.

As a matter of fact, one of the most touted beginner investing vehicles within the whole construct of real estate is wholesaling.

There are a few reasons for this.

First, wholesaling doesn’t cost money which is attractive to new investors. Second, becoming a wholesaler allows you to develop a number of skills that translate well into many other facets of real estate investing.

As a wholesaler, you’ll become familiar with concepts like evaluating property values, working with agents, utilizing the MLS (if you have a realtor’s license), negotiating, and selling.

Bottom line… There’s no other facet of real estate that gives you as broad of exposure to investing as wholesaling does.

How Much Money Can a Wholesaler Make?

When you wholesale real estate, you give yourself the opportunity to make as much as you want while investing as little as you want. The amount you’ll ultimately walk away with comes down to two things…

How much you charge per assignment and how many deals you close.

Assignment fess, again, are variable from wholesaler to wholesaler. Some charge fees that hinge on the value of the house they’re selling. Others charge rates based on how good the deal is that they got under contract.

We recommend playing with your fee structure to see what works best in your local market. You can also attend your local chapter of real estate investment clubs and ask other wholesalers for tips.

As far as volumes of deals are concerned, your ability to put a ton of properties under contract and to sell those contracts before they expire comes down your ability to get a volume of high-quality leads…

How to Get Property Leads as a Wholesaler

Now that you understand everything there is to know about what it means to be a wholesaler, it’s time to understand ways to get inventory (properties under contract).

There are a lot of different methods successful wholesalers use to generate property leads. Below are a few of the most tried and true methods we think that you should explore.

Make Offers on the MLS

If you’re a realtor, you have direct access to the MLS which means that you’re the first person to know when a property hits the market. As a wholesaler, you should be making as many low-ball offers on the properties you see pop up as possible.

Don’t be afraid to make yourself blush when offering! The worst someone can do is say no.

Not a realtor? No problem.

Find a good agent to make low-ball offers for you or get your real estate license.

Keep an Eye Out for Old or Expired Listings

Whether it’s on the MLS or on real estate sites like Zillow, it’s worth your time to keep an eye out for listings that expire or that have been up for a long time.

If a listing expires, chances are you’ve got a desperate seller you might be able to squeeze. The same is true for a listing that’s been on Zillow for 60+ days.

Make low-ball offers and see what happens.

Drive for Dollars

Sometimes you have to get off of your butt and start scouring the neighborhood to find a good deal.

Get in your car and drive around to see if you find any “for sale” signs. You can also keep an eye out for houses that look distressed.

Sometimes an abandoned-looking property is a sign of someone who is short on cash and is willing to cut a deal.

Be sure to also consider contacting multi-family properties since buy and hold investors will line up to purchase those off of you. You can read more now about multifamily property investing.

Use Direct Mail

Every wholesaler we know sends out mailers to areas they like wholesaling in. These mailers say things like, “Will Buy Your House Now!”

You’d be surprised how quickly mailers like that will get your phone ringing and sales coming in.

How to Get Buyer Leads as a Wholesaler

Now that you have ideas on how to find houses to get under contract, it’s time to figure out how to sell those contracts to buyers.

Below are a few strategies worth trying.

Put Out Signs

When you have a house that’s under contract, put out signs in your area that say things like, “NEED TO SELL HOUSE FAST, CHEAP” or “CHEAP HOUSE FOR SALE, CASH ONLY”.

Signs always get phones ringing and chances are you’ll find a buyer.

Post in Investment Forums

There are investment communities like BiggerPockets where a ton of real estate investors hang out.

If you have a deal to sell, posting about it on forums within those communities could pique someone’s interest.

Contact Landlords

If you’re seeing “For Rent” signs in your neighborhood with a phone number, that may be a real estate investor’s phone number you can dial.

Give it a ring and see if the person on the other end would like to buy your property. If you get a property management company on the line, have the company deliver your message.

Social Media

People that wholesale real estate love social media because it’s a free and effective way to market listings.

Take some pictures of the property you have under contract and let your network know that it needs to go, fast!

Final Thoughts on Wholesaling Real Estate

When you wholesale real estate, you help a seller get money, you help a buyer find a great deal on a home and you get paid for it.

In our book, that’s a pretty sweet deal.

Just be sure to include the “assignment contingency” in any houses you get under contract. Without it, you may not be able to back out of a real estate deal if you can’t find a buyer.

If you’d like to learn more about investing, money management and everything in between, check out more of our content on Best Growth Stock today!