What is Wholesaling?

It’s always the first assumption. You come across someone who has very obviously achieved financial freedom. This is evidenced by their lifestyle (Nice home, nice car, kids college paid for) and by their life of leisure (they have ample time on their hands to do the things they enjoy). You don’t ask yourself what it is they do for a living because the combination of their quality of life mingled with the apparent freedom they have in how they spend their time answers the question for you.

No, you tell yourself, this person doesn’t work for anybody.

This person’s in real estate.

An Opportunity Out of Reach

Anytime we see someone who’s made a living in the real estate industry, we’ll usually convince ourselves that this person is able to succeed because of something they have that you don’t.

Maybe they started out with a great job that provided the finances they needed to invest in their first property, but your job barely pays enough to cover the bills.

Maybe they were born into wealth and had parents who helped them to get started with real estate. They were raised in a home that was saturated in investment talk, and already had a network of real estate investors they could lean on to purchase the properties they were flipping.

Or maybe, you think they just got lucky. The right combination of smarts, privilege, and good timing.

Whether any of the above is true or not, it doesn’t matter. Because the truth is, anyone can achieve financial freedom in the real estate industry. That’s right, you can make it in real estate even if you:

  • Have horrible credit
  • Spent years in prison
  • Live paycheck-to-paycheck
  • Come from a poor family
  • Don’t have a real estate license
  • Didn’t go to college

Sounds too good to be true? Then you’ve never heard about wholesaling.

Wholesaling in a Nutshell

I know what you’re thinking. If anyone can wholesale then it must be a really complex process. Nothing could be further from the truth. While wholesaling does require a lot of work, it’s actually a very simple process with a massive return on investment.
Here’s the elevator pitch: Wholesaling real estate is the process of selling a piece of paper

But what does that mean? Let’s break it down some.

Find the property

As someone who wholesales real estate you spend the bulk of your time looking for distressed properties. What that means is that you’re looking for properties that have certain attributes that would cause a seller to be motivated to sell it for less than what it could be worth after repair.

Here’s a few examples:

  • Homes that have been neglected (i.e. Paint peeling, overgrown with weeds)
  • Homes that have fallen behind on property tax or mortgage payments
  • Homes owned by those who recently went through a divorce
  • Home with a water shut-off notice

Sign an agreement

Remember the paper we said you’d be selling, this is it. Once you and the seller have come to agree on a price they’d be willing to sell their home for, you both sign a contract. There’s no money exchanged, no down payment involved.

Find a buyer

Once you have the signed contract your goal is to find someone to assign that contract to for more than what the seller had agreed to take for the property.

Get paid

The investor who buys the contract from you will pay you the difference between what the seller agreed to and what you sold the contract for.

Is it legal?

Almost everywhere, and even where it’s not legal, you can still wholesale virtually in markets where it is legal.

Is it ethical?

Absolutely. Distressed properties are owned by distressed sellers who have a problem for which you provide the solution. As a wholesaler, you save people from going bankrupt, going into defaults, being stuck with a property they never wanted (i.e. an inheritance). Wholesaling real estate is all about finding solutions for problems. People who have the time or interest will sell their property through traditional means. These aren’t your customers. Your customers are pressed for time, in need of a lifeline, and you’re the one who steps in to save the day.

How do I get started?

Check out our resources page! We have everything you need to get started in wholesaling.

And if you’d like some help making your first deal, check out our Wholesaling Academy program. We have successful wholesaling coaches who can provide you the education, support and accountability you need to make your first deal faster than going it on your own.

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