He Made $5K Without Buying a House (Beginner Wholesaling Breakdown)

Do you need to buy the house when wholesaling? That's the question. In today's episode, I'm going to be going over how my student that I'm mentoring just got his first deal for $5,000, and he didn't buy the house. He didn't even need to buy it because that's— you don't need to do that in wholesaling. I'm not only going to go over that, but if you're interested in wholesaling, you're going to learn a lot more. These are the things we're going to go over today. We're going to do a deep dive into how my student was able to complete the deal and how I was able to help him out. We're going to go over the unique challenges that we had to overcome in order to get this deal done. I'm going to break down the call that we did with the student and how I talked to the seller and got her to accept a subject to offer. And we're going to go over finding out what are the practical strategies and the things you need to do to get the deal done. So stay tuned. So before I get into the story about how we got this deal done and how you don't need to buy a house in order to wholesale, I kind of want to tell you a little bit about my student Henry. Henry joined my program a little bit ago, and Henry's actually from Vietnam. Henry is literally— he is the man. He is a hard worker, and I knew when he joined my program he was going to succeed. And the reason why I knew he was going to succeed is because he immediately took action. You're not going to know everything. You're not going to know exactly what to say to the seller or what to do, but what you're going to be able to do is know that taking action is what's going to help you in the beginning. That's what Henry did. So when I saw that he was willing to do that, I knew he was going to succeed. Henry's been in the United States for a couple years now, but look, he didn't let that stop him from taking action and going after what he wants. And what he got was his first deal. So let's dive into it. So what happened and how Henry got this deal is he was looking for deals on a strategy— with a strategy that I teach. It's through finding investors, and it's finding people who are selling their homes on Facebook. Okay, this costs you $0. You don't have to spend any money on this strategy. What I told Henry to do, I said, hey, go to your market where you have buyers and go start searching Facebook groups for people who are selling. So that's exactly what Henry did. Henry found a seller who was an investor that had listed their home on the MLS that they didn't have any success selling because they were asking for way more than it was worth. Henry called the seller and talked to him about it and found out there was motivation. Henry brought me the deal because he said, hey, Nate, I don't really know the best way to negotiate because they want too much, but there is motivation involved. So he gave me the lead and I called the seller. I was a little skeptical. I was like, I don't know if we can make this work if she wants a lot. The only way you can really make a deal work if the seller wants a lot of subject to or creative finance. There's many different ways to do creative financing, but subject to is what we were doing because she had a mortgage in place. So I called her and what we're going to do later in on this video is I'm going to walk you through the conversation I had with the seller so you can see exactly how I navigated this call, this transaction. Okay. I actually even got her to sign that next day. It was really cool. I was able to fill out the paperwork, send it to her. She agreed. And I can show you all that as well. But the sticky part of this deal was it was subject to, so we had to go back and forth and and had to negotiate specific terms that she felt comfortable and I felt comfortable with. But the thing that I want everyone to recognize and realize is that Henry, not knowing how to negotiate that deal, that didn't let him stop him from getting the deal. He just went to someone that had that experience and he was able to ask them for help. That's how you succeed, especially when you're beginning. You don't really know exactly what to do, but if you get around someone that does, whether that's me, whether it's someone else has experience, whether it's a local mentor, they can help you navigate through the situation. So that's exactly what happened. And I'm going to show you, like I said, later that call. But before I do, I got something else I got to tell you. One thing I want to tell you all about is my Facebook group. I created a Facebook group right now. It's around 4,000, 5,000 people and it's growing. What this Facebook group is, is it's dedicated to helping people that want to learn how to wholesale, want to learn how to get into it for absolutely free. Join my Facebook group. It's called the Painless Wholesaling Group. The link is down below in the description. Join it and I promise you that you're going to get everything you need to take action. That's why we have it, because I wish I had something like this that gave me as much detail as I needed to take action and a place where I had a community where I could ask questions. So check out my free Facebook group, Painless Wholesaling Group. Check it out. Love to see you there. And yeah, I know it'll help you out. Going back to this deal now that Henry got, and again, he did not have to buy it. We did not have to buy it in order to wholesale it. This deal came again, it came from a Facebook group. He called the seller. He handed it off to me. We're about to dissect that call. I made an offer. She did not like my cash offer, so I offered a terms deal that she later eventually accepted. Now, what we did is we wholesaled this terms deal to one of my buyers, okay? But before we get into all that and how you structure deals, let's listen to this call right now and see how it went. Let's check it out. She's about to answer.

Hello, Noel, how are you? Good, how are you?

Um, Henry, I work with Henry. He's one of the people that work on my company. Um, he told me that you were going to be expecting my phone call, is that right?

Yeah, I'm in the middle of a meeting, but, um, I just missed it. So you can go ahead.

Oh, you're in the middle of a meeting. Do you want me to call back later? Are you okay?

I just need to listen to them. No need to talk.

Okay. Okay. Sounds good. Are you at work or something?

Yeah, I just on the voice all day. So whenever there are a conversation, I need to turn that off.

Okay. I gotcha. I gotcha. Well, kind of tell me a little bit. Henry said you were thinking about selling your property and you're— are you thinking about listing it? Or you, uh, have you already listed the property?

It used to be listed. I took it down because the listing agent doesn't know how to work on it. So whenever there is an offer, she just leave it for a few days before she actually told me.

Well, the real situation was that she listed the property for too high. She was asking for too much.

So we didn't get the enough good offers to go forward. So I just take it, list it on Airbnb. It's doing great in Airbnb anyway.

So That's frustrating.

That's frustrating. That's a fair price. Otherwise, I'm not going to sell.

Say that one more time. I'm sorry. I was talking. What?

Because that's a money-making machine. If it's not a fair price, I'm not going to sell.

So you said at the moment the property is a money-making machine. Is that what you said?

Yes.

Wow. That's amazing. Okay, that's good. That's a good thing that it's making you a lot of money. So at this moment, there's really not a lot of motivation there. She's just going to keep it as Airbnb. This is interesting. Henry said that there was motivation. Can you— a lot of money. So unless you get a lot of money for it, you're not going to sell. Is that what you said?

I mean, if it's not a fair price, then I'm not going to sell. So if you have a lowball offer, just don't bother sending me.

Yeah, I understand. Well, let me look at the address really quick. Can you give me the address so I can just check and see what I could be able to pay? A lot of sellers don't want to get lowballed. Okay, so you just got to talk to them and just be like, yeah, okay, no, I understand where you're coming from.

Yeah, $111,000.

Okay, so she wanted $300,000. Now that's pretty much retail, okay, but the house is in good condition. Okay, let me look. I'm just— I'm on Zillow right now. I'm just running some comps.

I know that it said in 2000 and it sold in 2021, and then if it's not having any offer, I keep renting it to nurse or construction workers again. So it's another 6 months not being listed.

That makes sense. When you listed it and you took it off, what did you list it for?

I think the last July I listed for $330,000.

Okay.

It's for $300,000. But if it's not working, it's not going to be listed until the next contract check out.

Gotcha. Okay. Well, I'm just looking at it right now. So 3-bedroom, 2-bath. There's a house right next to yours that's a 3-bedroom, 3-bath. I'm just talking with her about it and saying, hey, you know, this is what I'm looking— I'm looking at comps. And really, she's just like, hey, look, if you can't get me $300,000, I'm not interested. Now, a cash offer, $300,000, that's not going to work. Obviously, the only way it can work is with terms, okay? And then this deal, it's so tight, the only way we could make it work is if there was nothing down. Um, you probably are aware of that one. It's just like right on the corner. But what she accepted for $295,000 So that one's for $295,000, but it doesn't— and we want to make sure we're taken care of too. So would you be open to if we could work out a deal where we purchase on terms? Would you be open to something like that?

I will be open for maximum 2 years.

Okay.

If anything beyond 2 years, it's out of my range. I would rather keep it for long-term investing.

So if you— if we were to work out something on terms, you said a maximum of 2 years, like before we did a balloon payment. Is that what you're saying? Like before I paid it off? Mm-hmm. What purchase price would work for you if we were to buy it on terms?

Still, at least $300,000. Anything below that, I'm not going to consider.

So $300,000 purchase price. So she listed at $330,000. She's saying, I'll go down to $300,000, but that's the lowest I'll go, or I'll just list it. So for me, I'm like, well, look, this barely works. The only way it could even potentially work is if we just buy it, take over the payments, and bring nothing down and wholesale it, or we keep it and we keep it as an Airbnb for 2 2 years. Now, her mortgage was like— we later found out that it was like $1,700, $1,800, something like that. And she was Airbnb-ing it for like $3,000 a month. Did we do, um, no interest payments?

Uh, I need to see your offer first, and I run my math all by myself to see if that's worth it.

I originally said no interest payments, but, um, you know, there'd have to be interest on it, um, for, for it to make sense for her. Eventually found out Usually what we do is we try to get into these deals if we buy them on terms with no money down. Would you be open? Would that be okay if we paid you $300,000 if we came in with no money down?

Does that mean you don't pay monthly payment as well?

No, I would, I would make monthly payments. I just wouldn't bring any money. I wouldn't bring any money down upfront. I would just start making monthly payments to you.

So if I ask monthly payment, is that $300,000 divided by 24?

24. Oh, no, no. She says— she's like, hey, you're going to pay me $300,000 and divide that by 24 months. No, it's amortized over 30 years, just like a mortgage. Okay. I know this might be a little confusing for people, but this is the only way to really get someone closer to what they're asking price is if you can structure payments just like you would buy it on terms, like, you know, on payments. It would be that. So we would have it amortized over 30 years, just like a normal mortgage.

Normal mortgage, like a 30-year.

Yeah. So it'd be amortized. It would be amortized over 30 years like a normal, like, mortgage loan. And we would be making the monthly payments. It would probably be— let's see. So later I find out that, you know, what her mortgage is. And I basically say, hey, I can pay your mortgage. Now look at what I'm asking. I'm not asking anything crazy. I'm just asking questions. I'm not like doing any ninja moves. I'm just saying, hey, would you be open if we could buy your house on terms? You know, we— in order for us to get this done, we'd have to come down with nothing. You know, we wouldn't be able to bring anything down. Now, that was not my best conversation, but it worked. You know why? Because we later found out that her motivation was she just didn't want to deal with it anymore. Okay, Henry brought me this deal. There was motivation in the sense that she had multiple properties, they weren't selling, she wanted too much, but we were able to structure this deal and make it— have it make sense. We just recently closed on this deal, and we wholesaled it to one of my buyers for $5,000. Okay, so this buyer that I have loves buying properties on terms, and what we're able to do is wholesale it to him. He was able to take over at $305,000. He brought $5,000 down, and he's assuming the payments that we had structured with the seller. Okay, so to answer everybody's question that came into this video originally is, can you do a wholesale deal without buying a property? Of course you can. You don't even need to buy the property. Wholesaling, you don't buy the property, right? If you own it, then you're just selling it. But wholesaling is you have the contract like I did with the seller, and we wholesale it to one of our buyers.. And it was, uh, I would say it had its obstacles because with subject to, you have to agree to certain terms. Now, if you do have a deal where someone is open to selling on terms, you need to re— and you haven't done it, haven't done one like that, reach out to someone that has, because they can help you structure it. Title companies are great for helping you structure and, or mentors or people have done. I've done several subject to deals, creative finance deals, and I always lean on experts and other people just to make sure I'm doing it right. So what did we learn from this deal? Well, we learned a ton of things. We learned that if you are brand new, like my student, or if you're just watching this video and you do not know how to do a deal, but you have a seller that seems motivated or has a property that they want to sell, you don't have to know everything. You just need to be around the right people that do, and they can help you navigate this deal. Now, $5,000, that might not sound like that much to a lot of people because, you know, I've done a ton of bigger deals, I've done smaller deals, but that's, you know, $5,000 is usually not the biggest spread that I'm used to. But, uh, you know, I'm grateful that I was able to get it done with Henry. And this is basically how you do it. You call the seller, you ask questions, you see what they're open to. The cash offer. She knew it was going to be a lowball offer, so I didn't even make a lowball offer for the cash. I just said, hey, are you open to terms? We're able to navigate that deal. So yes, you can do deals in wholesaling without buying a property. Yes, you can do deals where it's even close to retail if they don't take anything down. And by the way, this house was already Airbnb ready. She left the furniture. It's all ready to go. So that's why this one worked. There's not many deals where you can make it work at retail unless you're— there's, you know, it's in great condition, you're able to just take over the payments, and you can cash flow. So from Henry, any tips that he would recommend to you. I'm going to have him on my podcast soon, and you can listen to that. But any tips that he would recommend is just take action. That's what he says. He just knows that you can do deals from what I showed him without having to spend a single dollar in marketing. You can get all your deals from the MLS, from Facebook groups, from JVing, from networking. You don't need to spend any money on marketing, and that's what we teach. This is what we focus on. So I hope this breakdown was helpful to show you exactly how to do deals without having to spend a cent and Show you that you do not need to know everything in order to get a deal done. You can JV and you can partner with someone that does. So if you like this video, I'm going to be revealing a lot more success stories that my students have had, people that I know and myself have been having as we wholesale and we do real estate deals. So continue to come back to the channel. Please subscribe as it will notify you if you're subscribed about new videos that are coming. I promise you that all I try to do is provide value and help you succeed as investors. That's what this channel is all about, is helping you reach your next level. That's why I do what I do. All right. See you on the next one.