Step By Step Guide On Wholesaling

This article details the entire process of how to wholesale.

Ryan Pineda

October 4, 2021

When people hear no money real estate investing they usually think of flipping houses and finding lenders to fund the deal for you. That’s where I started. It wasn’t until about 2015 I learned about another way to do deals called wholesaling. 

Wholesaling real estate is one of the best ways to make money in real estate investing. You can make a profit without buying the house, renovating the house, and selling the house. Instead all you do is find a really good deal, and sell that deal to a buyer without ever buying it yourself. 

Wholesaling is essentially being a middleman. A wholesaler’s job is to find a good deal through marketing and eventually find sellers willing to sell below market value. 

Let’s say hypothetically you find a deal, and negotiate with the seller to buy it for $200,000. On the contract it says you are the buyer and purchasing it from the seller. The contract also gives you the ability to assign it to someone else. That allows you to assign all of your rights from the contract to anyone for an assignment fee. 

So if I have this property under contract with the seller for $200,000, and I know other buyers would be willing to pay $215,000 I can assign the contract to them for $215,000. So the buyer would then pay $215,000. $200,000 of that would go to the seller and the other $15,000 would go to me, the wholesaler. 

One thing you’re probably wondering is why would the buyer pay me more? Why not just find the seller himself? 

The reason is that finding the seller is the hardest part of any deal. If the buyer knows they'll pay an assignment fee of $15,000 for this house, and after they fix it up they can make a $40,000 profit, they’ll pay that everyday. 

So here’s how to wholesale!

As a wholesaler the hardest part is to find deals, and there’s typically three ways to do so. You can use the MLS, other wholesalers, and direct to sellers. My advice for a beginner would be to avoid the MLS just because of how competitive it is. 

The best way to get deals to wholesale is through direct to seller marketing. These are different marketing methods we use to get in touch with sellers directly. A few examples of this are driving for dollars, door knocking, cold calling, etc. The list goes on and on. 

When it comes to marketing there’s two things you need to know. 

Marketing is a business all on it’s own. Aside from the flipping operation, to have a marketing portion you need sales people, someone to manage the marketing, it’s definitely not an easy job. 

The second thing is you need to understand your budget. If you can’t spend a ton of money on marketing you need to stick to some cheap methods. The best for those are cold calling and texting. 

The second part of wholesaling is how to find cash buyers. This is probably the easiest part to wholesaling. Some of the best ways to find buyers are Facebook groups, meetups, and just networking for other investors. 

That’s literally all it takes to wholesale. Find good deals, find cash buyers, and become the middleman. 

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