Real Estate Wholesaling: Complete Beginner's Guide to Getting Started

Want to break into real estate investing but don't have money for down payments? Real estate wholesaling might be your answer. It's one of the few strategies where you can make significant income without buying properties, taking out loans, or having perfect credit.

But wholesaling isn't easy, and it's definitely not a "get rich quick" scheme. This comprehensive guide covers everything you need to know to start wholesaling real estate the right way—from finding your first deal to closing your first assignment.

1. What Is Real Estate Wholesaling?

Real estate wholesaling is a short-term investment strategy where you find discounted properties, get them under contract, then assign (sell) that contract to another buyer for a profit—all without ever actually buying the property yourself.

Here's the simple version:

1. You find a distressed property the owner wants to sell quickly
2. You negotiate a purchase contract at below-market price
3. You market the deal to your network of cash buyers/investors
4. You assign your contract rights to a buyer for an assignment fee
5. The end buyer purchases the property and you collect your fee at closing

Your profit: The difference between your contract price and what the end buyer pays. Typical wholesale fees range from $5,000 to $30,000 per deal, though this varies widely based on market and deal type.

Wholesaling vs Other Real Estate Strategies

Wholesaling compared to:

Fix-and-flip: Flippers buy, renovate, and resell. Requires capital, contractors, carrying costs. Higher profit potential ($20K-50K+) but much more risk and work.

Buy-and-hold rental: Investors purchase and rent properties long-term. Builds wealth through cash flow and appreciation but requires financing, property management, and patience.

BRRRR: Buy, Rehab, Rent, Refinance, Repeat. Requires significant capital, credit, and involvement but builds a rental portfolio.

Wholesaling advantage: No capital needed, no credit checks, no renovation work, no tenant management. Fast turnaround (30-45 days typical). Lower risk.

Wholesaling disadvantage: Lower profit per deal, need constant deal flow, requires large buyer network, competitive market.

Is Wholesaling Right for You?

Wholesaling works best if you:

✅ Are motivated and willing to work hard (it's not passive) ✅ Are comfortable with marketing, sales, and networking ✅ Can handle rejection (most deals won't work out) ✅ Want to start real estate investing without capital ✅ Have time to dedicate to finding and marketing deals ✅ Are detail-oriented with contracts and paperwork ✅ Live in or near a market with investor activity

Wholesaling might not work if you:

❌ Want passive income (it requires active work) ❌ Aren't willing to make hundreds of calls/contacts ❌ Can't handle inconsistent income (deals are irregular) ❌ Live in a market with limited investor activity ❌ Aren't willing to learn contracts, values, and negotiation

2. How Wholesaling Works: The Complete Process

Let's walk through a typical wholesale deal step-by-step:

Step 1: Find a Motivated Seller

You locate a homeowner who needs to sell quickly and is willing to accept below-market price. Common motivated seller situations:

• Foreclosure: Owner is behind on payments, facing bank seizure
• Inherited property: Someone inherited a house they don't want or can't afford
• Divorce: Couple splitting up needs quick sale to divide assets
• Relocation: Job transfer or military deployment requires fast move
• Tired landlord: Owner burned out on rental management
• Property in disrepair: House needs extensive work owner can't afford
• Financial hardship: Medical bills, job loss, or other financial stress
• Vacant property: Owner paying mortgage/taxes on empty house

Your value proposition: You offer speed, certainty, and convenience. You close fast (often 7-30 days), buy as-is with no repairs required, and handle all the hassle.

Step 2: Determine Property Value and Repair Costs

Before making an offer, you need to know:

After-Repair Value (ARV): What the property will be worth after renovation

Repair Costs: How much work the property needs and what it'll cost

Maximum Allowable Offer (MAO): The most an investor can pay and still profit

Formula: MAO = (ARV × 70%) - Repairs - Assignment Fee

Example:

• Property ARV: $200,000
• Estimated repairs: $40,000
• Your desired wholesale fee: $10,000
• MAO = ($200,000 × 70%) - $40,000 - $10,000 = $90,000

This means you need to get the property under contract for $90,000 or less to wholesale it successfully.

Step 3: Negotiate and Get Property Under Contract

You present an offer to the motivated seller. Your purchase agreement should include:

Key contract clauses:

• "And/or assigns" after buyer name (allows you to assign the contract)
• Inspection contingency (gives you out if numbers don't work)
• Extended closing period (30-45 days to find your end buyer)
• Assignment clause stating you can assign the contract

Earnest money: Typically $500-2,000 to show good faith (you get this back if deal falls through or goes to closing)

Example offer:

"I'll buy your property for $90,000 cash, close in 30 days, as-is condition with no repairs. I can give you $1,000 earnest money to show I'm serious."

If seller accepts, you now have the property under contract.

Step 4: Market the Deal to Your Buyers List

Now you blast the deal to your network of cash buyers and investors:

Marketing channels:

• Email your buyers list
• Post in real estate investor Facebook groups
• List on wholesale platforms (Connected Investors, BiggerPockets Marketplace)
• Text message blast to known flippers
• Call active investors in your network

Your marketing should include:

• Property address and photos
• ARV and repair estimate
• Your contract price
• Potential profit margin for end buyer
• Closing timeline
• Contact info

Example marketing message:

"🔥 NEW DEAL - Evansville 3/2 Ranch ARV: $200K | Repairs: $40K | Contract: $90K Potential profit: $25K+ for flipper Closes in 30 days. Respond if interested!"

Step 5: Find Your End Buyer

Interested buyers will reach out. You provide more details, arrange property showings, and field questions about condition, repairs needed, and neighborhood comps.

Negotiating assignment fee: If you contracted at $90K, you might assign for $95K-100K, earning $5K-10K for your work finding and vetting the deal.

Some wholesalers show their contract price and negotiate fee separately. Others simply offer the property at their desired sale price without revealing their contract amount.

Step 6: Execute Assignment Agreement

Once you have a buyer, you sign an Assignment of Contract agreement. This document:

• Transfers your contract rights to the end buyer
• Specifies your assignment fee
• Releases you from obligations under purchase contract
• Makes end buyer responsible for closing

The end buyer now:

• Steps into your shoes as purchaser
• Pays seller your contract price
• Pays you your assignment fee (usually at closing)
• Takes ownership of the property

Step 7: Closing

At closing:

• End buyer purchases property from seller at original contract price
• Your assignment fee is paid to you (typically from buyer's funds)
• You walk away with your profit
• End buyer owns the property

Your involvement: Show up to sign assignment paperwork and collect your check. The title company or closing attorney handles the rest.

Timeline: From finding the deal to collecting your fee typically takes 30-60 days.

3. Finding Wholesale Deals: Marketing Strategies That Work

Your success as a wholesaler depends entirely on your ability to find motivated sellers. Here are proven methods:

Direct Mail Campaigns

Send postcards or letters to targeted lists of likely motivated sellers.

Best lists to target:

• Pre-foreclosure/notice of default
• Expired listings (homes that didn't sell)
• Absentee owners (landlords living elsewhere)
• High-equity owners (own property free and clear)
• Inherited properties (from public records)
• Tax delinquent owners
• Code violations
• Vacant properties

Your message: Simple, direct, and solution-focused.

Example postcard:

"Need to sell your house fast? We buy houses in any condition. No repairs, no fees, no hassle. Cash offer in 24 hours. Call/text: [Your Number]"

Volume required: Expect 0.5-2% response rate. To get 10-20 leads, mail 1,000-2,000 pieces.

Cost: $0.50-1.00 per piece including printing and postage. Budget $500-1,000 per campaign.

Driving for Dollars

Drive through neighborhoods looking for distressed properties—overgrown yards, boarded windows, damaged roofs, piles of mail.

Process:

1. Use apps like DealMachine or PropStream to track addresses
2. Skip trace to find owner contact info
3. Send targeted mail or call owners directly

Time investment: 5-10 hours per week driving and documenting

Cost: Minimal (gas + skip tracing ~$1-2 per lead)

Online Marketing

Build simple website and run ads targeting motivated sellers.

Website elements:

• "We Buy Houses" messaging
• Cash offer request form
• Testimonials from past sellers
• Phone number prominently displayed
• Simple, fast-loading design

Paid advertising:

• Google Ads: Bid on keywords like "sell my house fast [city]"
• Facebook Ads: Target demographics likely to be motivated sellers
• Craigslist: Post "We Buy Houses" ads regularly

Budget: $300-1,000/month for online ads

Conversion: Expect to spend $150-500 per lead depending on market competitiveness

Cold Calling and SMS

Call or text property owners directly from your targeted lists.

Script example:

"Hi, my name is [name] and I'm a local real estate investor. I noticed you own a property at [address]. I'm looking to buy properties in that area and wondered if you'd consider selling? I can make you a cash offer and close quickly if you're interested."

Challenges:

• Time-consuming (100+ calls for one deal)
• Lots of rejection
• Requires thick skin

Advantages:

• Immediate responses
• No waiting for mail delivery
• Build rapport directly

Networking with Real Estate Professionals

Build relationships with people who encounter motivated sellers:

Real estate agents: Especially those who list REOs (bank-owned properties) and short sales

Attorneys: Probate attorneys, divorce attorneys (referrals for clients needing quick sales)

Property managers: Often know landlords wanting to exit rental business

Contractors: Hear about homeowners who can't afford repairs

Offer referral fees: Pay $500-2,000 for deals that close to incentivize referrals.

Bandit Signs

Yard signs placed at busy intersections (check local laws—many cities ban these).

Message: "We Buy Houses! Cash! [Phone Number]"

Effectiveness: Generates calls but quality varies widely

Legal risk: Many jurisdictions fine for illegal sign placement

Wholesaler-Specific Platforms

Join platforms designed to connect wholesalers with deals and buyers:

• Connected Investors
• BiggerPockets Marketplace
• Wholesale Real Estate Network
• Local REIA (Real Estate Investment Association) groups

4. Building Your Cash Buyers List

Your buyers list is your most valuable asset. Without buyers ready to purchase, your deals go nowhere.

Where to Find Cash Buyers

Real estate investor meetups: Attend local REIA meetings, networking events, real estate investing workshops

Online forums: BiggerPockets, Facebook groups for local investors

Courthouse steps: Attend foreclosure auctions—anyone bidding is a cash buyer

Public records: Look up recent cash purchases in your area (shows active buyers)

Craigslist: Post "Wholesale Deals Available" ads, monitor "Wanted" section

Other wholesalers: Network with other wholesalers who have different buyer networks

Real estate auctions: Attend and collect cards from bidders

Qualifying Your Buyers

Not all "buyers" will actually close. Qualify them by asking:

Key questions:

• How many properties have you purchased in the last 12 months?
• What's your typical acquisition strategy (flip, rental, wholesale)?
• What areas are you buying in?
• What's your price range?
• What condition properties do you prefer?
• Do you have cash or need financing?
• What's your typical profit margin requirement?
• How quickly can you close once you see a deal you like?

Red flags:

• Never purchased before (tire kickers)
• Need financing (most wholesale deals are cash-only)
• Unrealistic profit expectations
• Never respond when you send deals

Organizing and Managing Your List

Use a CRM (Customer Relationship Management) system to track:

Buyer information:

• Name and contact info
• Property preferences (location, price, condition)
• Purchase history
• Response speed
• Deals closed with you

Email marketing tools: Mailchimp, Constant Contact, or investor-specific platforms

Segmentation: Create buyer categories:

• Flippers (want cosmetic fix properties)
• Rental investors (want stabilized cash-flowing properties)
• Landlords (want multi-family or section 8 properties)
• Contractors (can handle heavy rehab projects)

Send targeted deals to appropriate buyer segments for faster sales.

Building Relationships with Top Buyers

Your best buyers deserve special attention:

VIP treatment for buyers who:

• Close consistently
• Move fast on deals
• Don't renegotiate at last minute
• Refer other buyers to you

How to nurture relationships:

• Give them first look at best deals before blasting to full list
• Invite them to lunch/coffee to discuss their criteria
• Refer deals to them that don't fit your business model
• Provide market intelligence and insights

Remember: Your buyers make your business possible. Treat them as partners, not transactions.

5. Analyzing Deals: How to Know It's a Good Wholesale

Not every property you find is wholesaleable. You need sharp deal analysis skills to avoid tying up bad deals.

The 70% Rule for Wholesaling

Investors typically follow the 70% rule:

Maximum purchase price = (ARV × 70%) - Repairs

This gives investors a 30% margin for profit, holding costs, closing costs, and unexpected expenses.

As a wholesaler: You need to contract properties at even less to leave room for your assignment fee.

Your formula: MAO = (ARV × 70%) - Repairs - Your Fee

Determining Accurate ARV

ARV (After Repair Value) is what the property will sell for after renovations.

How to calculate ARV:

1. Pull recent comps (comparable sales) from last 3-6 months
2. Find 3-5 similar properties (beds, baths, sq ft, location)
3. Use properties in renovated/retail-ready condition
4. Average their sale prices
5. Adjust for differences (pool, garage, lot size)

Tools for comps:

• MLS access (through agent partner)
• Zillow/Redfin (less reliable but accessible)
• PropStream or REIPro (investor platforms)
• County assessor websites

Conservative approach: Use lower end of comp range. Better to underestimate ARV than overestimate.

Estimating Repair Costs

Accurate repair estimates are critical. Underestimate repairs and your buyer loses money (and won't work with you again).

Categories to estimate:

Cosmetic repairs:

• Paint: $1.50-3.00 per sq ft
• Flooring: $2-8 per sq ft (depends on material)
• Kitchen updates: $5,000-25,000
• Bathroom updates: $3,000-12,000

Mechanical systems:

• HVAC replacement: $3,000-8,000
• Water heater: $800-2,000
• Electrical panel: $1,500-3,000
• Plumbing repairs: $500-5,000+

Structural:

• Roof replacement: $5,000-15,000+
• Foundation repair: $3,000-30,000+
• Structural work: Varies widely

Exterior:

• Siding: $5,000-20,000
• Windows: $300-800 each
• Landscaping: $1,000-5,000

Buffer: Add 10-20% contingency for unexpected issues

Resources:

• Bring contractor to walkthrough
• Use estimating software (Rehab Valuator)
• Learn from experience (shadow flippers on their projects)

Sample Deal Analysis

Property: 3BR/2BA, 1,400 sq ft

Step 1: ARV

• Comp 1: $215,000
• Comp 2: $208,000
• Comp 3: $220,000
• Average: $214,000
• Conservative ARV: $210,000

Step 2: Repairs

• Kitchen: $8,000
• Bathrooms: $5,000
• Flooring throughout: $4,000
• Paint: $2,500
• HVAC: $6,000
• Roof repair: $3,000
• Landscaping: $1,500
• Contingency (15%): $4,500
• Total repairs: $34,500 (round to $35,000)

Step 3: Maximum Allowable Offer

• MAO = (ARV × 70%) - Repairs - Assignment Fee
• MAO = ($210,000 × 70%) - $35,000 - $8,000
• MAO = $147,000 - $35,000 - $8,000
• MAO = $104,000

Conclusion: You need to contract this property for $104,000 or less to wholesale successfully.

If seller wants $120,000: No deal. You can't make it work at that price.

If seller accepts $95,000: Great deal! You could assign for $103K-108K, earning $8K-13K.

6. Legal and Ethical Considerations

Wholesaling operates in a gray area in some states. Make sure you're operating legally and ethically.

Is Wholesaling Legal in Your State?

Most states: Wholesaling is legal if done correctly

Licensing concerns: Some states consider wholesaling "brokering real estate" which requires a license

States with restrictions: Illinois, Oklahoma, and others have specific wholesaling regulations

How to stay compliant:

Option 1: Use proper assignment contracts making it clear you're assigning your equitable interest in a contract (not acting as agent)

Option 2: Double closing (see below) instead of assignment

Option 3: Get your real estate license (provides legal cover and MLS access)

Consult a real estate attorney in your state to ensure compliance.

Assignment vs Double Closing

Assignment: You assign your contract to end buyer who purchases directly from seller

Advantages:

• Simple paperwork
• Lower closing costs
• You're out once assignment is signed

Disadvantages:

• Seller sees your assignment fee (can cause issues)
• End buyer sees your contract price (knows your markup)
• Some title companies won't facilitate assignments

Double closing (back-to-back closing): You actually purchase the property from seller, then immediately sell to end buyer

Transaction A: Seller → You Transaction B (same day): You → End Buyer

Advantages:

• Neither party sees the other transaction
• More accepted by title companies
• Feels more legitimate
• Works when contracts prohibit assignment

Disadvantages:

• Higher closing costs (pay costs twice)
• Need transactional funding (loan to temporarily buy property)
• More complex paperwork
• Short-term ownership carries liability risk

Transactional funding: Lenders provide 1-day loans to wholesalers for double closings. Costs 1-3% of purchase price.

Ethical Wholesaling Best Practices

With sellers:

• ✅ Be transparent about what you do
• ✅ Explain they could potentially sell for more on open market
• ✅ Deliver on your promises (close on time, as agreed)
• ❌ Don't mislead about your intentions
• ❌ Don't low-ball desperate people unethically

With buyers:

• ✅ Provide accurate repair estimates
• ✅ Disclose known issues with property
• ✅ Use realistic ARV numbers
• ❌ Don't exaggerate profit potential
• ❌ Don't hide major defects

General principles:

• Win-win-win for seller, buyer, and you
• Provide real value (saving seller time/hassle, finding buyer good deals)
• Build reputation on integrity
• Under-promise, over-deliver

Remember: Real estate is a relationship business. Your reputation is everything.

7. Common Mistakes New Wholesalers Make

Avoid these costly beginner errors:

Mistake #1: Overestimating ARV

Problem: Using aspirational comps or retail pricing leads to deals that don't work for end buyers

Solution: Use conservative, recent comps in actual renovated condition

Mistake #2: Underestimating Repairs

Problem: Missing major repair items means buyers lose money and won't work with you again

Solution: Bring experienced contractor to walkthrough, add 15-20% contingency

Mistake #3: Not Building Buyers List First

Problem: Getting properties under contract without buyers lined up leads to failed deals

Solution: Build buyers list BEFORE marketing for properties

Mistake #4: Poor Contract Clauses

Problem: Contracts without assignment clauses, inspection contingencies, or proper "and/or assigns" language

Solution: Use attorney-reviewed contracts with proper clauses

Mistake #5: Chasing Bad Deals

Problem: Trying to make deals work that aren't actually good deals

Solution: Be disciplined about numbers. Walk away from marginal deals.

Mistake #6: Overpromising to Sellers

Problem: Guaranteeing closings you can't deliver creates legal/ethical issues

Solution: Use proper contingencies, be honest about process

Mistake #7: No Marketing Follow-Up

Problem: Contacting sellers once and giving up

Solution: Follow up 5-10 times over months. Situations change.

Mistake #8: Neglecting Buyers

Problem: Only contacting buyers when you have deals

Solution: Regular communication, providing value beyond just deals

8. Scaling Your Wholesaling Business

Once you close your first few deals, here's how to scale:

Systematize Your Marketing

Create consistent lead generation:

• Direct mail sent monthly
• Online ads running continuously
• Driving for dollars 10 hours per week
• Cold calling 2 hours per day

Track metrics:

• Cost per lead
• Lead-to-contract conversion rate
• Contract-to-close conversion rate
• Average assignment fee

Example metrics:

• $80 cost per lead × 100 leads = $8,000 marketing spend
• 100 leads → 10 contracts (10% conversion)
• 10 contracts → 6 closed deals (60% close rate)
• 6 deals × $8,000 average fee = $48,000 revenue
• Profit: $48,000 - $8,000 marketing = $40,000

Hire Virtual Assistants

Outsource time-consuming tasks:

VAs can handle:

• Skip tracing to find owner contact info
• Cold calling from your lists
• Managing CRM and follow-ups
• Posting ads on Craigslist/Facebook
• Creating direct mail campaigns
• Social media management

Cost: $5-15 per hour for skilled VAs

ROI: Frees your time for higher-value activities (negotiating, analyzing deals)

Build a Team

As you grow, bring on partners:

Acquisition manager: Talks to sellers, negotiates deals, gets properties under contract

Disposition manager: Markets deals to buyers, manages buyer relationships

Transaction coordinator: Handles paperwork, coordinates closings

Structure: Pay base + commission per closed deal (typically 5-20% of assignment fee)

Expand Your Buyers Network

Host investor meetups: Position yourself as deal connector

Partner with other wholesalers: Trade deals, share buyers, split fees

Create exclusive buyers club: Offer best deals to VIP buyers for membership fee

Add Related Revenue Streams

Bird-dogging: Get paid by other wholesalers for finding deals you can't close

Transactional funding: Provide short-term loans to wholesalers for double closings

Education: Teach wholesaling through courses or coaching

Joint ventures: Partner on flips with your buyers (you find, they fund/execute)

Property management: Manage rental properties for your investor buyers

9. Your First 90 Days as a Wholesaler

Here's a realistic action plan to close your first deal:

Days 1-30: Foundation Building

Week 1-2: Education

• Read "The Book on Investing in Real Estate with No (and Low) Money Down"
• Watch YouTube wholesaling series (Max Maxwell, Ryan Pineda)
• Join local REIA group
• Study your market (neighborhoods, pricing, investor activity)

Week 3-4: Setup

• Create LLC (optional but recommended)
• Open business bank account
• Get contracts reviewed by attorney
• Build simple website
• Set up CRM (even Google Sheets works initially)
• Join BiggerPockets and introduce yourself

Days 31-60: Marketing Launch

Week 5-6: Start Marketing

• Send 500-1,000 direct mail pieces
• Start driving for dollars 10 hours/week
• Launch Google/Facebook ads ($20/day budget)
• Post Craigslist ads daily
• Join local real estate Facebook groups

Week 7-8: Build Buyers List

• Attend 2-3 REIA meetings
• Cold call active investors from public records
• Post "Wholesale Deals Available" ads
• Connect with 10-20 serious buyers
• Get pre-qualified letters/proof of funds from buyers

Goal: 50-100 buyers on your list

Days 61-90: Close First Deal

Week 9-10: Work Leads

• Follow up with marketing responses
• Tour 10-20 properties
• Make 5-10 offers
• Get 1-3 properties under contract

Week 11-12: Wholesale Deals

• Market contracted properties to buyers list
• Negotiate assignment fees
• Coordinate with title company
• Close first deal!

Expected outcome: $5,000-15,000 in assignment fees from first deal(s)

10. Resources to Accelerate Your Learning

Books:

• "The Book on Investing in Real Estate with No (and Low) Money Down" by Brandon Turner
• "The Real Estate Wholesaling Bible" by Than Merrill
• "If You Can't Wholesale After This" by Todd Toback

Podcasts:

• BiggerPockets Real Estate Podcast
• Real Estate Investing Mastery
• Flipping Junkie Podcast

Software/Tools:

• PropStream or REIPro (finding deals, comps)
• DealMachine (driving for dollars)
• Podio or HubSpot (CRM)
• BatchLeads or ListSource (lists)

Communities:

• BiggerPockets forums
• Local REIA groups
• Facebook groups: Wholesaling Houses, Real Estate Investing

Mentorship:

• Find local successful wholesaler
• Offer to work deals for free in exchange for learning
• Join paid coaching/mastermind (vet carefully—lots of scams)

Final Thoughts

Real estate wholesaling is one of the most accessible entry points into real estate investing. With persistence, strong deal analysis skills, and a solid buyers network, you can build a profitable business without needing capital, perfect credit, or renovation skills.

Keys to success:

✅ Consistent marketing (lead generation never stops) ✅ Conservative deal analysis (maintain reputation with accurate numbers) ✅ Strong buyer relationships (your buyers are your business) ✅ Ethical practices (integrity builds long-term success) ✅ Persistence (first deals are hardest, keep pushing)

Most wholesalers quit after 30-90 days without closing a deal. Those who persist through the first 6-12 months build sustainable businesses generating $5,000-50,000+ per month.

Your path forward:

1. Complete your first 90-day plan
2. Close your first deal
3. Reinvest profits into more marketing
4. Scale systematically
5. Build systems and team

The opportunity is real, but so is the work required. If you're willing to put in the effort, commit to daily action, and persist through rejection, wholesaling can launch your real estate investing career.

Ready to start wholesaling or want to connect with local investors? EDP Realty works with wholesalers and investors throughout the area. Whether you're looking for wholesale deals or want to connect with our network of buyers, we can help. Contact us today to discuss your investment goals.

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