How to Wholesale Real Estate Step By Step in 2024

There are 13,388 employed wholesalers at present, with an average earning of $60,000. With the growing real estate industry, wholesaling is the ideal option for beginners to join the real estate market.

With little investment, you can start your wholesaling career in a trillion-dollar industry.

What Is Wholesale Real Estate?

Wholesaling real estate is a process that allows wholesalers to earn a profit from the sale of property without investing in it.

The role of the wholesaler is to look for distressed properties, get potential buyers on board, and close the deal. Generally, they place the property under a wholesale real estate contract.

A wholesaler is a middleman who helps the seller and buyer complete the transaction. They get a percentage of the commission upon the sale of the property.

» How to Wholesale Real Estate: Learn how to wholesale real estate with this guide.

Wholesale Real State Example

To better understand how wholesaling the real state works, let’s look at an example.

Consider that the seller wants to sell the property for $80,000. The wholesaler will reach out to the seller and sign the purchase agreement.

With the help of this agreement, the wholesaler will have the right to purchase the property. So with zero investment, the wholesaler will have the rights, and they can look for potential buyers.

The role of the wholesaler here is to look for a buyer who can pay more than $80,000 for the property. If someone is ready to offer $100,000 for that property, the wholesaler will immediately close the deal. The difference between the amount paid and the amount asked would be the wholesaler’s fee.

How to Wholesale Real Estate: A Step by Step Guide

1. Educate Yourself 

A wholesaler can’t grow in the market without learning the basics of the real estate industry. You can read real estate books, listen to podcasts, or find a mentor. Also, you can learn from their experiences and avoid common mistakes a wholesaler can make.

2. Build a Buyers List

To close a good deal, you need a strong buyer list. Any individual or organization, including real estate investors, dealers, and regular people, can be a cash buyer. To build a strong buyer list, you can attend real estate investor meetings, engage with local wholesalers, join online forums, and more.

As a wholesaler, you have to make sure to present the type of property buyers like. You must know their preferences since it will help you find a potential buyer and close the deal quickly.

3. Look for a Motivated Seller

In order to get the best deals and a significant profit margin, you must look for a motivated seller. The homeowners usually wish to sell their properties as soon as possible. There could be many reasons for it, but with a proper background check, you can sign the property under contract.

To find the sellers, you can start with email marketing or make door-to-door visits.

4. Get the Property Under Contract

After finding a good property, you must get it under contract. The contract is only for the sake of securing the right to purchase. It will permit you to assign the property to the buyer.

The contract will specify that the wholesaler has the right to transfer the contract to other investors. Before signing the wholesale contract, check if the terms and conditions are favorable.

5. Get Buyers on Board 

With all major boxes checked, you can bring potential buyers on board. You have to turn to your buyers’ list and search for investors for the property. Also, you can promote the property on social media platforms. If you still can’t find a buyer, you can contact local wholesalers and local REIAs, or check on Craigslist.

6. Get the Fees 

As a wholesaler, your fees will be the difference between the selling price and the buyer’s offer. So, to get a higher fee, you have to negotiate with the seller as well as the buyer. You have to convince the seller to reduce the asking price. And along with that, push the buyer to purchase it at a higher price.

To market the property, you must make a deal between 40% and 60% below the asking price, within market standards.

7. Close the Wholesale Deal

Once the contract is assigned to the buyer, your part of the transaction is over. You can collect your assignment fee and opt for another deal. But during the deal, you have to help the seller and buyer with legal formalities.

How to Virtually Wholesale Real Estate Step by Step

You can wholesale real estate from anywhere in the world. Virtual wholesaling of real estate makes this possible. The process of virtual wholesaling is the same as the traditional one.

For virtual wholesaling step-by-step, you must read about the wholesale real estate guide. However, the inspection process can be trickier, as you are virtually handling all the processes.

Because of this, many virtual wholesalers hire a property inspector. If you trust the property owner, you can inspect the property on a video call. But you can fall for the trap here, so it’s advisable to be cautious.

Pros and Cons of Wholesaling Real Estate

Here are a few pros and cons of wholesaling real estate:

Pros✅	Cons❌
Wholesaling doesn’t need a license.	As the wholesaler doesn’t own the property, you have to comply with the legal limitation for the advertisement of the property.
For wholesaling, you don’t need any investment or funding.	The income is unstable and lower in comparison with flipping or being a real estate agent.
You can close the deal in any market; it doesn’t matter whether it’s your neighborhood or not.	Wholesaling can be risky if you don’t have a buyer for the property. You have to find a buyer according to the period given in the contract.
You can build connections and gain experience in the real estate market.	In a highly competitive market, you may struggle to find a good buyer or property.

Tips for Succeeding When Wholesaling Houses

To succeed in real estate, the most important step is to build a good network. Before starting your career, try to get in touch with other wholesalers. You can communicate with them and learn about the market.

Apart from wholesalers, you can also contact real estate agents and locals. These small steps will help you understand the market better.

The other tips include building skills like communication, negotiation, problem-solving, and setting a budget for marketing. With these few skill sets, you can build a good relationship with the clients and help them find the best deal.

Find Wholesale Properties For Sale With Houzeo

With thousands of property listings, Houzeo.com is one of the biggest property listing sites in the US. Find condos, townhouses, co-ops, and other types of homes for sale on Houzeo.