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Discover How to Wholesale Real Estate: A
Step-By-Step Guide to Becoming a
Successful Real Estate Wholesaler
Wholesale real estate: Many people are ready to dump the 9 to 5 grind and join the world of
real estate investing.
If you've just discovered this magic, you may be wondering to yourself "what is wholesaling
real estate"? This isn't a common phrase that you hear in the news or in general
conversations. This article will explain what wholesaling houses means, and give you some
basic information about how to wholesale houses.
What is Real Estate Wholesaling?
Real Estate wholesaling is a specialized method for buying in every real estate market. Some
might refer to this as flipping houses. The process involves negotiating a discounted purchase
price on a property, and signing a contract with the seller. Once the wholesaler and the seller
agree and after all the contract has been signed, the wholesaler can assign his interest in the
property to a new buyer for a fee.
Buyer of a real estate wholesale deal are typically a landlords or rehabbers. Rehabbers rely
on wholesalers to located distressed properties for them at discounted prices so they can
focus more on their business model.

HOW TO WHOLESALE REAL ESTATE STEP BY
STEP
Property MOB
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Is Wholesaling Real Estate Illegal?
Real estate wholesaling is not illegal as long as it's done correctly. You must have a signed
real estate purchase agreement with the current owner of the property. Then can sell your
interest to another person for a fee. The fee can be any amount that you and the new buyer
agree to.
How to Wholesale Real Estate
Learning how to become a real estate wholesaler can be a daunting task. There are many
different coaches and real estate mentors out there who teach different methods of
structuring creative real estate transactions. Moreover, the basic process of wholesaling
houses can be summarized in 5 simple steps:

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Here is the breakdown of the 5 simple steps to follow when wholesaling real estate

Generate Motivated Seller Leads
The ability to generate quality seller leads is where the real estate wholesale deal begins.
Execute a marketing campaign that targets property owners that may be distressed (i.e.
foreclosure. Probate, and absentee owners).
Motivation is what will drive the seller to sell the property at a discount price. Moreover,
without motivation from a seller, you'll find yourself beating a dead horse. This will cause
frustration to a newbie wholesaler, and may even drive you to give up.
Pre-Screen Sellers
Pre-Screen Sellers thoroughly to determine their motivation. Have a series of questions ready
to ask your potential sellers. Listen for motivated seller trigger keywords.
More often than not, the person responding to your marketing will not be the right person for
your real estate wholesaling program. Not every seller is a qualified lead.
Without an underlying REASON to sell the house, and a need to get rid of the house, you’re
not going to be able to get a deal. If you want to shorten the pain of this inevitable problem
that all new real estate investors will have, I highly recommend practicing your listening skills.
When you can understand the seller’s reason for selling, you can help them solve their
problem.
Tips for Pre-Screening Motivated Sellers for Wholesale Real Estate
Stay in control of the conversation.

If the sellers start telling you how beautiful their house is, and how much money they've

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put into over the last 50 years, they're probably not your motivated sellers. They have an

assign your contract for a profit. That’s a win-win agreement.

In today's competitive market, you may have to offer the seller a higher price than your
competitors, in order to get the property locked up. This means taking less of an assignment
fee. Since your contracts are such short term agreements, you'll be able to make a quick
check and move on, even if you do have to pay a higher price.






















Follow Up with Sellers
If your seller doesn't accept your purchase price offer the first time, don't consider them dead.
emotional and monetary attachment to their property, and probably just need to call a

Inquire about any outstanding mortgage balances.

Make An Offer to Purchase Property


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Follow up with every seller that you've made an offer to. Create a strong follow-up funnel
that will convert sellers months down the road without spending any additional marketing
dollars.
Follow-up marketing campaigns can include direct mail, phone calls, text messages, emails,
and retargeting on Social Media.
Close the Deal
Secure your position in this transaction by getting the seller to sign your real estate contract
for the lowest purchase price possible. Use a simple, all-cash as-is purchase and sale
agreement. When you get to this point, you’ve gotten through the most dimcult part of a
wholesale transaction. Now you can market the contract and assign it to a cash buyer.
How to Write a Real Estate Wholesale
Contract
Writing a real estate contract can be intimidating, especially for a new real estate
wholesaler. The agreements used in the business are typically very short and simple without
a lot of contingencies. Moreover, you can find Standard Purchase and Sale Agreements at
your local omce supply store.
Listed below are the essential elements of a wholesale contract:

Buyer and Seller Name
As a matter of fact Both the buyer(s) and seller(s) name must be listed on the contract. The
parties must be 18 years of age or older and be of sound mind. The signatures of all parties
involved must be presented on the contract
Legal Description of Real Estate
The Property address must be listed on the real estate contract. When possible, also include
the legal description. This can usually be found online in the property appraisers database or
on a deed.
Purchase Price and Earnest Money
The purchase price that was agreed to by the buyer and seller must be indicated on the
contract. If there is monetary consideration (earnest money deposit), that amount must also
be listed on the contract.
Contract Expiration Date
All real estate wholesale contracts must have an expiration date. This is the date that both
parties agree to perform by, or the settlement date. This can be negotiated between the

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seller and the buyer. For a wholesale deal, the expiration date is typically 10 - 30 days.

Best Marketing Lists for Wholesale Real
Estate
The key to a successful real estate business is learning how to generate motivated seller
leads. There are some core lists of people that you can target to find the sellers that are
willing to work with you. Once you can generate the right leads, you're potential deals will be
plentiful.
Probates
Divorces
Delinquent Property Taxes
Quit Claim Deeds
Code Violations
Landlords who are Evicting Tenants











How to Find Buyers for Your Discounted
Properties
Investors that will buy your contracts from you are typically people who own rental properties
and rehabbers (fix and resale). Their exit strategy is completely different that yours. This
makes for an excellent business relationship. A strong real estate wholesaler keeps a list of
qualified cash buyers.

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Here are some ways to locate cash buyers:

Real Estate Marketplaces
There are many online real estate marketplaces out there. However, most of those
marketplaces won't work for real estate wholesalers because they mainly appeal to retail
buyers rather than to investors. Therefore, you need to make sure you post your wholesale
deals to marketplaces that attract real estate investors searching for investment
opportunities. Here is an example of a great website that has an entire section of wholesale
real estate deals for sale where you can list your properties to get targeted cash buyers.
Facebook Groups
There are hundreds of Facebook Groups that are full of cash buyers. If you join these groups
and the members in the group get to know you through social networking, you’ll have a great
pool of buyers to sell your wholesale properties to.
Craigslist
Craigslist has a “Real Estate for Sale” classified section where you can post your properties.
Depending on where you love, you may or may not have to pay a small fee to post your
listing. Moreover, when potential buyers respond to your ad, you can start building your cash
buyers list.
Website
Setup a website that is exclusive used to collect buyer leads and present deals to your
wholesale buyers. Using a lead capture form and offering exclusive peeks at deals before

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they’re marketed to the public is a great way to build a buyers list. Drive tramc to your
website through direct mail, social media, social media groups, and car magnets.
Local REIA Meetings
There’s a plethora of cash buyers at the local real estate investor meetings. Attend the
meetings and come prepared with information about the properties (contracts) that you
have for sale.
Realtors
There are plenty of real estate agents who work with cash investors, both local and out of
state buyers. Search for these Realtors online and build relationships with them. If you build in
enough profit into the deal, you’ll be able to offer a commission to the Realtor by helping you
sell your contracts. However, be sure the Realtor that you chose to work with understands
real estate wholesaling.
Explaining Real Estate Wholesaling to A Seller
Sellers are very savvy in today’s market. They are familiar with real estate wholesaling and if
you’re working with the right seller, are accepting of it. Moreover, the best practice when it
comes to sellers is to be totally transparent about your role in the transaction.
Be honest with your seller and explain the process, the risks, and the rewards. Let the seller
know your intention is to assign your interest to another buyer. The right sellers will get on
board.
Do You Need a Real Estate License To
Wholesale Real Estate?
As a matter of fact a real estate license is required to buy or sell a property for someone
other than yourself and be compensated for that. Moreover, as a real estate wholesaler,
you’re selling your interest in the real estate via the contract that you have with the seller. It’s
similar to obtaining a mortgage, and then the mortgage company sells your loan off to
another company.

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Top 7 Reasons you SHOULD have a real estate license as a real estate
investor:
#7 - Access to the MLS for Comps and Market Data
#6 - Ability to Find your Own Deals (REO's, motivated sellers, etc)
#5 - Ability to List Your Own Deals (contracts, rehabs)
#4 - You will know the laws of your state.
#3- You can fill income gaps with Realtor activity income
#2 - You can refer leads for a referral fee
#1 - Eventually become a broker and open your own omce (for the ambitious only).
Can You Really Make Money Wholesaling
Houses?
Wholesaling real estate can be very lucrative. In fact, it's one of the easiest business models
to make fast money. There's plenty of misconceptions about how "easy" it is to get started.
One of the biggest challenges is getting things off the ground and closing your first deal.
Learning the business is like learning any new trade. Firstly, you start with the basic concept
and then start filling in the details. Eventually, it becomes second nature and you can do your
work with your eyes closed.
The Mindset of a Real Estate Wholesaler
There seems to be a common mindset for those who are successful in the real estate
wholesaling business. Once you have established that this is a real business and it needs to
be treated as such, you can really start digging in.
How to achieve success in the real estate wholesaling business
These are the exact actions you need to take in order to become a successful real estate
wholesaler!
It´s a competitive space but if executed correctly it is a very beneficial and fantastic business
model.
There are specific steps and things you NEED to do if your goal is to become a successful real
estate wholesaler.
1. A plan
You must have the plan set up before throwing yourself into the big space of real estate
wholesaling. Otherwise, you'll soon meet loads of obstacles, and you will soon realize that
your competitors have a big advantage over you. It´s like the importance of having a map if
you are going to drive in a completely foreign place, without the map you will always end up
going to the wrong place and not succeeding in the way you wanted. A plan for your real
estate wholesaling business that you then will execute accordingly will ensure that you are
set up for success and will achieve your goals.
2. Negotiation
Negotiation is a massive part of the real estate wholesaling business. Therefore it is utterly
crucial that you practice your way of negotiating since that will give you a night-and-day
advantage when it´s time to use your negotiating skills in action. Learn what techniques and
ways work the best and practice every day to become a master negotiator!
3. Network
Networking is something that is needed if you want to expand, improve, and create a
successful business. Speak with other real estate wholesalers, join communities, and watch
how the successful people within the space work. If you learn from people that already have
achieved what you want in the real estate space you can learn, implement, and execute
accordingly and experience the same astonishing results yourself. A pack of lions always wins
over the lone wolf in any business space, create and find your winning circle and watch the
success appear.
4. Adapt
Make sure to adapt to changes within the industry and always be on the lookout for new
opportunities that can help your business. This way you always stay on top in your field and
are one step ahead of your competitors. For example, now AI is becoming a huge advantage
if used correctly within the industry. The people that learned and understood AI from an early
stage experienced much more success than those that didn´t. That is the real importance of
always being aware and knowing of changes and opportunities to adapt to.
Understand these things properly and implement them into your business to see massive
success within the real estate wholesaling business.
Consistency is the Key to Success
Whether you are brand new to the real estate wholesaling business or have been in it for
years, you should know that consistency is the key to success. Moreover, once you get your

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system running then it's imperative to keep it running in order to keep deals coming in.

How Much Money Can You Make Wholesaling
Real Estate?
The amount of money that you can make as a real estate wholesaler depends on how much
time and money you have to invest in your business. The first year may be your lowest
reported year of income, without $50,000 and it should increase from there. Many
wholesalers easily earn as much as $1,000.000.00 per year.
What is an Assignment Fee?
An assignment fee is the amount of money that the buyer pays to take over the position of
the real estate wholesaler in the contract. This amount can be a percentage of the purchase
price, or a flat fee. It is negotiated between the buyer and the seller of the contract. The
assignment fee can be paid at the time the interest is sold, or at closing as a line item on the
Settlement statement.
How to Get Started Wholesaling Real Estate
When you’re ready to get started as a real estate wholesaler, the first step is to construct a
marketing plan. The goal is to start generating leads. Motivated sellers are the lifeline to your
success. Direct mail, Pay Per Click Advertising, bandit signs, and cold calling are just a few
methods you can use to start generating leads.
To beat the learning curve, you’ll want to enroll in a training course or find a real estate
mentor. Either of these can help eliminate some of the common mistakes that new real estate
wholesalers make (like offering too much for a property).

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How to Wholesale Real Estate With No Money
If you don’t have any money to fund your marketing campaign, you can offer your time to an
experienced wholesaler in exchange for mentorship. Similar to an internship you can do
certain tasks for a busy wholesaler like taking photos of houses, and marketing properties in
exchange for some valuable knowledge.
Driving for dollars, cold calling and door knocking is another way to get started without any
money. However, this isn’t the best business model, since it will be hard to sustain once you
start getting busy with sellers and closings. Make it a point to shave a good portion of profits
off of your deals to invest back into your business.
What is Virtual Wholesaling?
Virtual wholesaling is when you’re a real estate wholesaler that is doing business in an area
other than that of which you live. Moreover, most of the research, communication and
transacting is done via the internet. Many wholesalers of real estate have had great success
doing virtual wholesaling in multiple markets.






















Your First Deal Is the Game Changer
There are pros and cons to being in the wholesaling business. It's a little challenging at first,

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but Once you close your first deal and the money is in your bank account, your life will
change forever. You'll have the validation that you need to continue the journey and master
the trade.
Watch this video about my first deal that I closed it literally changed my future forever.
























Top 3 Mistakes to Avoid When Wholesale Real
Estate
Everyone makes mistakes when they're first starting out as a real estate wholesaler. We have
to learn to grow and earn more money. Here's a list of some very common mistakes that care
made in the real estate wholesaling business. Usually, mistakes are made by newbies.
Sometimes the same mistake happens over and over.

1. Don't Spend The Money Until it's in the Bank
It's very common to want to start planning on how you'll spend the check once you get it. Be
sure that as a matter of fact the deal has been closed, funded to all parties before it can be
considered as a closed transaction.
2. Always Collect Earnest Money Deposit from Your Buyers
If the buyer ties up your house for 14, 21, or even 30 days, and then doesnʼt close, he will be in
default. He will lose his earnest money deposit. Be sure to collect an amount that is
acceptable to you should this happen.
3. Never, Ever Turn Off Your Buying Machine
Keeping your marketing running automatically in the background at all times will help you

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keep an endless supply of motivated seller leads, hot deals, and big checks. The best way to
ensure that Wholesaler's lead generation machine is well oiled and always running is to hire a
virtual assistant to get things done!
Create a monthly marketing calendar and assign the tasks to your Virtual Assistant to make
sure that the marketing campaigns continue to run, even when you're not there or don't feel
like working that day.

Every successful wholesaler should take the time to educate themselves on the basics, and
on the advanced techniques that can be applied in the business. The Total Access Pass
covers everything you need to become a master.





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6 comments on “How to Wholesale Real Estate Step by Step”


Edward Cheek says:



02/09/2019 at 2:01 PM

do i get a contract to sell or have them sign a offer to purchase then have them
sign an assignment?


Reply





Tracy Caywood says:



02/27/2019 at 9:15 AM

Who are you referring to when you say "them"?

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melissa says:



11/04/2019 at 9:31 AM

wow, what a valuable resource your website is. I'm having fear of putting a
house under contract without having a solid buyer, I have potential buyers, but
nothing concrete. Any suggestions


Reply





Tracy Caywood says:



11/05/2019 at 1:32 PM

Real estate deals fall apart all the time. There is a remedy for what
happens if you breach the contract. The seller gets to Keep the Earnest
money Deposit. be sure to read the blog post about Earnest money
Deposits