Wholesaling in real Estate is a method of generating profit by finding a property that can be sold for more than its current value, then assigning that contract to another buyer for a fee. This practice can be a great way to start in the real estate industry, as it requires less capital and experience than other investment strategies. In this guide, we will list the 10 steps to wholesaling and then briefly cover each of them including the best cities for wholesaling, do's and dont's, what to look for in a wholesaling property, definitions for common real estate terms, and strategies to maximize your cash flow. We'll also cover the best software to get leads, comps, and off-market properties. Lastly we'll list some of the best real estate influencers, mentors and wholesalers to get you started.

Steps to Wholesaling Real Estate

1. Research your local real estate market to determine which areas are best for wholesaling. Look for areas with high demand for housing, low inventory, and potential for price appreciation.
2. Develop a marketing strategy that targets motivated sellers. This may include direct mail campaigns, online advertising, cold calling, and other tactics.
3. Build relationships with real estate agents, investors, and other industry professionals. Attend local real estate networking events and conferences to meet new contacts and learn about industry trends.
4. Identify potential properties that meet your criteria for wholesaling. This may involve driving around neighborhoods, searching online listings, or using skip tracing to locate property owners.
5. Evaluate potential properties to determine their market value, repair costs, and potential profit margin. This may involve conducting a property inspection, reviewing comparable sales data, and consulting with contractors.
6. Make an offer to the seller based on your evaluation of the property. Use a contract that protects your interests and includes contingency clauses that allow you to back out of the deal if necessary.
7. Once the offer is accepted, market the property to potential buyers. This may involve listing the property on online platforms or working with real estate agents to find buyers.
8. Negotiate with buyers to get the best deal possible. Use contracts that protect your interests and reduce your risk.
9. Close the transaction and collect your fee as the wholesaler. Make sure to keep detailed records of all costs and fees associated with the transaction.
10. Continuously educate yourself about the real estate industry and stay up to date on market trends and regulations. By following these steps and staying organized throughout the process, you can increase your chances of success in wholesaling real estate.

Best Cities for Wholesaling

When it comes to wholesaling, finding the right city is crucial to your success and some cities are more conducive to this business model than others. Common factors among these cities include a growing real estate market, a low cost of living, a strong job market, and diverse neighborhoods. Additionally, many of these cities have a large number of distressed properties that can be purchased at a discount by wholesalers. This creates opportunities for Investors to specialize in different types of properties and markets, depending on their strategy and goals while also providing lots of distressed properties at discounted prices. Based on recent trends and market data here are some of the best cities for wholesaling in the US:

1. Houston, Texas
2. Atlanta, Georgia
3. Dallas, Texas
4. Phoenix, Arizona
5. Las Vegas, Nevada
6. Charlotte, North Carolina
7. Cleveland, Ohio
8. Orlando, Florida
9. Tampa, Florida
10. Indianapolis, Indiana

The Do's and Dont's of Wholesaling

Wholesaling real estate can be a profitable investment strategy when executed properly however, like any investment strategy, there are certain do's and dont's that investors should follow to increase their chances of success. By taking into account the guidelines below, investors can maximize those chances in wholesaling.

Do:

• Research your local real estate market to determine which areas are best for wholesaling.
• Develop a marketing strategy that targets motivated sellers.
• Build relationships with real estate agents, investors, and other industry professionals.
• Negotiate with sellers to get the best deal possible.
• Use contracts that protect your interests and reduce your risk.
• Stay organized and keep detailed records of your transactions.
• Continuously educate yourself about the real estate industry.

While there are many strategies and best practices to follow when wholesaling real estate, here are also some common mistakes that investors should avoid.

Don't:

• Misrepresent yourself or your intentions to sellers or buyers.
• Violate any laws or regulations related to real estate wholesaling.
• Rush into a deal without thoroughly evaluating the property and the seller.
• Overestimate the after-repair value (ARV) of a property.
• Assume that every seller is motivated to sell quickly.
• Forget to factor in all costs and fees associated with the transaction.

One of the most important things to avoid is overestimating the after-repair value (ARV) of the property. This can lead to investors paying too much for the property, which can eat into their profits or even result in a loss. Another common mistake is assuming that every seller is motivated to sell quickly. Investors should do their due diligence and evaluate the seller's situation before making an offer. Another mistake to avoid is rushing into a deal without thoroughly evaluating the property and the seller. Investors should take the time to conduct a thorough inspection of the property and review any relevant documents or disclosures. Additionally, they should avoid violating any laws or regulations related to real estate wholesaling, as this can lead to legal issues and damage their reputation in the industry. Finally, investors should be honest and transparent in their dealings with sellers and buyers, and avoid misrepresenting themselves or their intentions.

What to Look for in a Wholesaling Property

To find a good property for wholesaling, you need to look for specific characteristics that make it attractive to potential buyers and also identifying properties that offer the most potential for profit. The first and most important thing to look for is a motivated seller. This means finding properties that are distressed or have been on the market for a long time, as these are often signs that the seller is looking to sell quickly. Other factors to consider include location, market trends, and the condition of the property. For example, if a property is located in a desirable area with high demand, it may be easier to find a buyer and sell the property quickly. Conversely, if a property requires extensive repairs or renovations, investors should factor in the costs and evaluate whether the property is worth the investment.

As renowned real estate investor, Robert Kiyosaki, once said, "The key to successful real estate investing is in your ability to buy right." This is particularly true in the context of wholesaling property. In addition to finding motivated sellers and considering location and condition, investors must also be aware of the potential for profit. This means evaluating the after-repair value (ARV) of the property and factoring in all costs associated with the transaction. Investors should also develop a marketing strategy that targets potential buyers who may be interested in the property.

Maximizing Cash Flow

To maximize your cash flow from wholesaling, you need to implement strategies that increase your chances of finding and closing deals. Here are some ways to do that:

1. Develop a marketing strategy that targets motivated sellers: This can include direct mail campaigns, online advertising, and networking with other industry professionals.
2. Use skip tracing and cold calling to find leads: These methods can help you find motivated sellers who may not have listed their property yet.
3. Focus on building relationships: The more relationships you build in the industry, the more leads and deals you will come across.
4. Always negotiate: Negotiating with sellers to get the best possible deal is crucial to maximizing your profits.

Cold Calling and Skip Tracing

Successful wholesalers often use cold calling and skip tracing to find potential sellers. Cold calling involves reaching out to potential sellers directly and pitching the benefits of selling their property to a wholesaler. Skip tracing involves using online databases and other tools to locate contact information for property owners who may be difficult to find. Both of these strategies can be effective ways to find motivated sellers who may not have listed their property on the market yet.

Once a potential seller has been identified, wholesalers must negotiate to get the best deal possible. This may involve making multiple offers or providing incentives to the seller. Wholesalers should also use contracts that protect their interests and reduce their risk, such as contingency clauses that allow them to back out of the deal if certain conditions are not met. Finally, wholesalers should stay organized and keep detailed records of their transactions, including all costs and fees associated with the transaction.

Best Places to Find Leads

Finding leads is essential to the success of your wholesaling business. Here are some of the best places to find leads:

1. Online real estate listings: Websites like Zillow, Redfin, and even Realtor.com can be great resources for finding properties that are for sale.
2. Direct mail campaigns: Sending postcards or letters to homeowners in your target area can generate leads from motivated sellers.
3. Networking: Attending real estate events and building relationships with other industry professionals can lead to referrals and new deals.
4. Cold calling and skip tracing: As mentioned earlier, these methods can help you find motivated sellers who have not yet listed their property.
5. Driving for dollars: Driving around your target area and looking for distressed properties can lead to potential leads.

Online Leads

1. Zillow: Zillow is a popular real estate website that offers a range of tools and resources for investors. You can use the platform to search for properties that meet your criteria, including properties that are listed for sale by owner.
2. PropStream: PropStream is a real estate data and analytics platform that offers a range of features for investors. You can use the platform to search for properties, run comparables, and access marketing lists.
3. REIPro: REIPro is a real estate investment software that offers a range of tools for investors. You can use the platform to search for properties, analyze deals, and manage your marketing campaigns.
4. Real Estate IQ: Real Estate IQ is a real estate data and analytics platform that offers a range of features for investors. You can use the platform to search for properties, run comparables, and access marketing lists.
5. Lead Sherpa: Lead Sherpa is a real estate lead generation platform that specializes in skip tracing and cold calling. You can use the platform to find motivated sellers and build your list of leads.
6. ListSource: ListSource is a real estate data and analytics platform that offers a range of features for investors. You can use the platform to search for properties, run comparables, and access marketing lists.
7. DealMachine: DealMachine is a mobile app that allows investors to find off-market deals by driving for dollars. You can use the app to take photos of distressed properties and send postcards or letters to the owners.
8. Investor Carrot: Investor Carrot is a real estate website and marketing platform that offers a range of features for investors. You can use the platform to create a website, generate leads, and manage your marketing campaigns.
9. Mashvisor: Mashvisor is a real estate data and analytics platform that offers a range of features for investors. You can use the platform to search for properties, analyze deals, and access marketing lists.

These are just a few examples of companies and platforms that are popular for finding wholesale real estate leads. It is important to do your research and choose a company that meets your specific needs and budget.

Making Your Own Wholesaling Contract

When wholesaling a property, you will need a contract that outlines the terms of the transaction between you and the seller. While it is recommended to consult with a real estate attorney to ensure that your contract is legally binding and enforceable, here are some elements that you should consider including:

1. Purchase Price: This should be the amount that you have agreed to pay the seller for the property.
2. Assignment Fee: This is the fee that you will charge the buyer when you assign the contract to them.
3. Earnest Money Deposit: This is the amount of money that you will pay the seller as a deposit to show your commitment to the transaction.
4. Closing Date: This is the date on which the transaction will be completed.
5. Contingencies: These are conditions that must be met for the transaction to move forward, such as an inspection or appraisal.
6. Default and Termination: This section should outline what happens if either party fails to fulfill their obligations under the contract.
7. Signatures: The contract must be signed by both parties to be legally binding.

Creating a well-crafted wholesaling contract is crucial for any real estate investor looking to succeed in this field. Using electronic signature platforms like DocuSign can also be a useful trick for simplifying the contract signing process. This technology allows parties to sign and execute contracts remotely, saving time and resources. However, it is important to make sure that the platform you choose is secure and compliant with all relevant laws and regulations. As mentioned earlier, it is still very important to seek legal advice and consult with experienced real estate professionals when creating a wholesaling contract.

Wholesaling Mentors and Influencers

1. Pace Morby: Pace Morby is a successful real estate investor and wholesaler who is known for his creative deal structuring and marketing strategies. He has been involved in hundreds of wholesale deals and is the founder of the Sub 2 Deal Mastery coaching program, which teaches investors how to buy properties subject to the existing mortgage.
2. Ryan Pineda: Ryan Pineda is a real estate investor and wholesaler who has done over 1,000 deals in his career. He is the founder of Homerun Offer, a real estate investment company that specializes in buying and selling distressed properties. Pineda is also known for his YouTube channel, where he shares insights into his business and provides tips and advice for aspiring investors. He offers a mentorship program called "The Acquisition Mastery Program," which teaches investors how to find and close more wholesale deals using a variety of marketing strategies.
3. Henry Washington: Henry Washington is a real estate investor and wholesaler based in Dallas, Texas. He is known for his ability to find and close deals quickly, and his expertise in negotiating with sellers and buyers. Washington offers a mentorship program called "The Wholesale University," which teaches investors how to find, fund, and flip properties using creative financing techniques. The program includes access to a private community of investors, as well as live coaching calls and training modules. Washington is also the founder of Investor Schooling, a real estate education platform that offers courses and coaching programs for investors at all levels of experience. He is known for his focus on helping investors achieve financial freedom through real estate investing.
4. Khang Le (King Khang): Khang Le is a successful real estate investor and wholesaler based in Southern California. He is known for his ability to find off-market deals, negotiate with sellers, and close deals quickly. Khang offers a mentorship program called "The Royal Council," which teaches investors how to find and close deals using a variety of marketing strategies and creative financing techniques. The program includes access to a private community of investors, as well as weekly coaching calls and training modules. Khang is also the founder of Khang Le Investment Group, a real estate investment company that specializes in buying and selling distressed properties. He is known for his focus on helping investors build wealth through real estate investing, and his commitment to providing high-quality education and mentorship to aspiring investors.
5. Tarek El Moussa: Tarek El Moussa is a real estate investor and television personality who co-hosted the HGTV show "Flip or Flop" with his ex-wife, Christina Anstead. Tarek is known for his expertise in rehabbing distressed properties and has been involved in numerous wholesale deals. He also offers a mentoring program called the Tarek El Moussa Mentorship.
6. Tom Krol: Tom Krol is a successful real estate investor and wholesaler who has done over 1,000 deals. He is the founder of Wholesaling Inc., a coaching and mentorship program that helps aspiring real estate investors learn how to wholesale properties.
7. Sean Terry: Sean Terry is a well-known real estate investor who has been involved in over 2,000 wholesale deals. He is the founder of Flip2Freedom, a coaching and mentorship program that teaches investors how to make money by flipping houses.
8. Cody Sperber: Cody Sperber is a real estate investor and wholesaler who has done over 1,000 deals. He is the founder of Clever Investor, a coaching and mentorship program that helps investors learn how to wholesale properties and build a successful real estate business.
9. Brent Daniels: Brent Daniels is a real estate investor and wholesaler who has done over 1,000 deals. He is the founder of the TTP (Talk To People) coaching program, which teaches investors how to find motivated sellers and negotiate deals using cold calling and other marketing strategies.
10. Grant Cardone is a successful entrepreneur and real estate investor who has also become a well-known mentor in the wholesale real estate industry. As a mentor, he offers guidance and strategies for finding and closing profitable real estate deals, as well as teaching negotiation techniques and the importance of building a strong network. Through his books, online courses, and live events, Cardone has helped countless aspiring real estate investors achieve success in the industry. He emphasizes the importance of taking action, being persistent, and constantly improving one's skills and knowledge.

These are just a few examples of real estate investors who are active in the wholesaling space and offer mentoring programs or resources for aspiring wholesalers. Keep in mind that there are many other successful investors and mentors out there, so it's always a good idea to do your own research and find someone whose style and approach aligns with your goals and values.

Must-Know Wholesaling Definitions and Terms

1. After-Repair Value (ARV): The estimated value of a property after it has been repaired or renovated.
2. Bandit Signs: Bandit signs are small signs that real estate investors post around a neighborhood or near a property they are interested in buying. These signs typically include a message such as "We Buy Houses" and the investor's contact information.
3. Bird Dog: A bird dog is a person who helps a real estate investor find potential properties to buy. Bird dogs are typically paid a finder's fee or commission if the investor ends up purchasing the property.
4. Cold Calling: Making unsolicited calls to potential buyers or sellers to try to generate leads.
5. Creative Financing: Creative financing refers to any non-traditional method of real estate financing that involves using unconventional sources of capital or structuring the financing in a unique way. Examples of creative financing include sub-to, seller financing, lease options, and wraparound mortgages.
6. DSCR Loan: DSCR stands for Debt Service Coverage Ratio, and a DSCR loan is a type of commercial real estate loan that is based on the property's ability to generate sufficient cash flow to cover the debt payments. In a DSCR loan, the lender will evaluate the property's income and expenses to determine its DSCR, and will typically require a ratio of at least 1.2:1 (meaning the property's net operating income is 20% higher than the debt payments) to approve the loan.
7. Double Closing: A double closing is a real estate transaction where the wholesaler buys the property from the seller and then immediately resells it to the end buyer, all on the same day. The wholesaler uses the proceeds from the end buyer's purchase to fund the purchase from the original seller.
8. Equity: Equity is the difference between the value of a property and the amount of debt owed on the property. In a wholesale deal, the equity is the amount of profit the wholesaler stands to make by selling the property to an end buyer.
9. Gator Financing: Gator financing is a type of real estate financing that involves a partnership between a real estate investor and a lender. Under this arrangement, the lender provides the investor with the necessary funds to purchase a property, and the investor repays the loan using a portion of the property's rental income.
10. Hard Money Lenders (HMLs): Hard money lenders are private lenders who provide short-term loans to real estate investors. These loans are typically secured by the property itself, rather than the borrower's creditworthiness, and are intended to provide quick funding for projects that may not qualify for traditional bank financing.
11. NOI: NOI stands for Net Operating Income, which is the income generated by a property after subtracting all of the property's operating expenses, such as property taxes, insurance, maintenance, and management fees.
12. Skip Tracing: The process of finding the current contact information of a person, typically a homeowner or potential buyer, using various databases and online resources.
13. Sub-to: Short for "subject to," sub-to is a type of creative financing where an investor takes over the existing mortgage on a property, but does not assume personal liability for the debt. Instead, the investor takes legal title to the property while the original mortgage remains in the seller's name. The investor then makes the mortgage payments and takes control of the property's cash flow and equity.
14. Title Company: A title company is a third-party company that handles the closing process for a real estate transaction. The title company performs a title search to ensure that the property is free and clear of any liens or encumbrances, and coordinates the transfer of funds and legal documents between the buyer, seller, and lender.
15. Wholesale Fee: The wholesale fee is the amount of money that the wholesaler charges the end buyer for assigning the contract to them. The wholesale fee is typically a percentage of the total purchase price or a flat fee, and is the wholesaler's profit on the deal.

Conclusion

Wholesaling can be a lucrative and rewarding way to enter the real estate industry. By following these guidelines, you can increase your chances of success and minimize your risks. Remember to always do your due diligence when evaluating a property and negotiating with sellers, and to seek professional advice when necessary. With the right strategy and a bit of persistence, you can build a thriving wholesaling business in real estate.