Master Wholesaling: Step-by-Step Blueprint for Success

Everybody wants to know this one thing: how do I get into real estate investing? Stay tuned. Now look, real estate investing— there's a lot of things that go into real estate investing. There's fix and flip, there's wholesaling, there's property management, there's buy and hold. But today, by the end of this video, I'm going to explain and tell you exactly how you can get into wholesaling. How does it work? How do you get into it? I'm going to explain all that. I'm also going to explain what is wholesaling, what tools you need to get started with so you can take action, and how to find buyers so you can bring them deals that they will pay you for without having to be licensed, without having to spend any money, without having to have the risk of purchasing real estate, without messing up your credit or even having credit. You don't need any of that. All right, I'm going to show you all that today, so let's dive right in. So what is wholesaling? Wholesaling is signing a contract with someone that owns a property at a discount. Okay, you can't wholesale a property, you really shouldn't, or it won't work. You can't wholesale property that's overpriced because no one's gonna take that deal. They're gonna say, well, I got to make money. You are finding properties or deals for buyers that you have or buyers that you will have. Now, I teach people that only go look for deals where you have a buyer already in place just because it's easier that way. If you just go look for a deal and you don't know who your you're going to sell it to, you're going to have run into a lot of problems and headaches. But what you're doing is you're getting a contract with a seller and you're saying, hey, I'm going to buy your house for $40,000.

Okay.

I know it's worth $100,000 and you know it's worth $100,000, but it's not worth that at the moment. Maybe if we fix it up and that seller says, okay, yeah, I understand my house is not worth $100,000 now and I don't have $30,000 or $40,000 to put into it and the time and the money and I don't want to put the effort into that. So you're saying, hey, I'll just buy it and I'll take care of it and I'll pay you what it's worth right now. You sign a contract for 40, but you have a buyer you already know has told you, I'll pay 60 for anything in that area. That's a 3/2 or a 2/1 or whatever, wherever you are in the United States. So you call up that buyer and if you do it the way I teach you, you probably already had a conversation with him before you put this house under contract and you've just said, hey, I have this house, I'll give it to you for 60. And he'll say, no, no, no, I got to be at 57. Then you can negotiate.

That's fine.

But you assign it to them. You got it at 40. You give it to them for 47. You make $17,000 all without having to have the house purchased. Purchase the home without having to— had to do really do anything other than sign the paperwork and find the deal, right, for the buyer. That's in a nutshell is what wholesaling is. So what tools do you need to start wholesaling? Well, it really depends on what level, what strategy you're at right now. So if you're a brand new beginner, I would recommend calling on the MLS, doing a lot of on-market outreach. Now what is on-market outreach? People primarily, they sell their home on the Multiple Listing Service. They list their house to the real estate agent to sell. Even if someone is distressed and they have a bit of a crappy house, most people will list home. They just don't know of any other way. They don't know of cash buyers. So you can find good deals on the MLS. You can see that homes are listed and they need work, and you can call that agent that represents that seller and say, hey, I'd like to make an offer. Now it gets way easier when you're doing this if you already have buyers in place and you know what they're willing to pay, or even just asking them what they're willing to pay. So having that tool of the MLS and making calls to agents is what you need if you're brand new. Now as you get more experience, I would recommend marketing. Marketing Marketing is a great way to get deals, whether you're cold calling with batch dialer, whether you're texting with batch leads. You can do mail, you can do pay-per-click, but I wouldn't recommend doing a ton of marketing until you have, you know, experience and you know how to navigate deals. Because when I first started, I went out— this is what they told me to do. They said, hey, just go market. So I went and spent $10,000 on mail because I was like, oh, this will give me a good return. I spent that money, didn't get any deals from it. So I was like freaking out because I lost $10K. If I had to go back, I definitely wouldn't have done that, or I would have had a buyer in place and been like, where do you buy? And if I had a call from someone that called me back from the mail, I would have said, hey, let me, let me find out what I could pay for your house. And then I would connect them to my buyer and I would try to make money that way. But as you go further, the tools that you'll need as you get more experience—

well, marketing tools.

Okay, so as a beginner, just get a phone, start making deals or making offers on the MLS with agent outreach. It's free. And as you get more experience, go more into marketing. So once you understand what wholesaling is and what tools you need and kind of how to get started, you're going to need to find buyers. But look, before we get into finding buyers, I want to ask you guys to come to my masterclass. I have a free masterclass where I dive in really in-depth on a live call, and it's absolutely free to get started. So go to painlessholesaling.com and register for it. I'm going to show you step A through Z on how to get a deal. Right? Because I actually did a 30-day challenge, me and Nathan Payne, who's on my team, for 30 days. We went to a market with no money and no experience and no buyers, and we both got deals within 30 days. I got a deal within 17 days. I think Nathan got his within like 25, but we were able to do it with no money. So what we teach, it literally works. It makes money, and we show you exactly how to do it on the masterclass.

So be there.

So like I was saying, You want to have buyers as you get into wholesaling so you can get started that way. I actually have a breakdown, an in-depth breakdown video that I've done in the past. I'm going to have you guys watch. This is going to show you exactly what to do as a brand new wholesaler, how to get started as a beginner, how to make money.

Check this out.

Let's dive right in.

So I call it the painless wholesaling method. This is the blueprint. It shows you steps 1 through 10 on how to get a deal every step of the way. But the way I believe you get started in wholesaling is you have to, at first, mindset is really important because wholesaling, it's a rollercoaster ride, especially when you get started. It's ups and downs, it's getting deals falling through. So you have to be prepared mentally to overcome that. So what's the first thing I tell people? The second step is picking a market. It's really important as you wholesale to pick the right market, because if you're in a market that there's not a lot of activity, a lot of flippers, you're not going to have anyone to sell it to. So you got to pick the right market. And you can use batch leads. So I show people how to use batch leads to pick their market. You can do cool things. You can check areas, you can pull lists, you can find buyers. Let's just say you were in Flagstaff, right? You'd be like, oh, can I start wholesaling like a ton of deals in Flagstaff, Arizona? Like, is there enough volume? Is there enough cash buyers in this area for me to do deals? So right here, you can check. If you just go to quick filters, it shows you that there's quite a bit of cash buyers. And that means sales in the last year or so. So Flagstaff would be good by the amount you can see. It says recent cash and hard money loan purchases of real estate. So they have automatic filters. It's really easy to determine, like, if there's activity, if you're in a major metro, because if you're in a major metro, I'd say 99% of the time, like, there's activity just because there's a lot of people living there. If a population is big, that means that there's a lot of people moving there. But if you live in a place that's a little not populated, it's like 50,000, 100,000, that just means there's less movement, less people moving in and out of the state. That's like a general rule of thumb. So the next step after picking your area is you want— my goal And what I tell people is do not just automatically or immediately just go start marketing and just calling sellers and trying to get a deal because you still are at this point, you've picked your market, but you don't know what people are buying. Markets differ all over the country. So you need to be able to understand your market and what people are buying. So the next thing I teach, and this is why I call it the painless wholesaling method, is I teach you how to network first to find your cash buyers. Once you understand and have about 5 to 10 solid relationships, then you can with confidence go out and start making offers. You can talk to sellers. So if you go to my mind map, I show you exactly how to run comps for wholesalers. So there's some really easy ways to do it, but let's go to step 1. So how to find comps. All right. So I use Batch Leads. I like Batch Leads a lot because it gives you a good idea of comps. You can just type in the address you want. Let's just look at this one. It gives you an estimated value. It runs an algorithm, right? Like most of these softwares, it tells you an estimated idea. So you get a good idea just immediately, like, okay, what it's worth, even quickly does comparables and it checks a radius within a year, square footage. It does all that and it shows you a bunch of different comps. So that's a quick way to do comps like immediately is just with batch leads. So the next one is Zillow, and then obviously MLS data trumps all. It's the best way to find comps. So that's how you find the comps. So you want to determine the ARV after you find comps in order to start the process of like, okay, what is a good deal? You need to find out what is this house I'm looking at, what is it worth if it's at the top of the market, right? Or it's fully flipped. So The best thing to do is find flipped comparables. If you're just finding a bunch of homes that haven't been flipped, it's going to be difficult to determine what it's going to be worth if a flipper goes in there and makes it really nice. Do your best to find comparables. The next thing that's important after finding the ARV. So let's just say, for example, ARV, you find a house that's worth $200,000 and you know, it's worth $300,000. So that's the ARV is $300,000. Now you got to determine, okay, they're giving it to me at $200,000. But how much repairs does someone need to put into it to get it up to $300,000? Right here are some questions to ask. So this says, are you working with a seller virtually? Are you working with someone in your backyard? This tells you how to navigate if it's virtual, what questions to ask and how to get pictures. So this is the easiest way to determine a light, average, or heavy repairs. So it says square footage of a house, for example, is 1,000 square feet times the cost of the light. If it's light, it's $18 per square foot. If it's average, it's $24. Or if it's heavy, which means down to the studs, you got to do the whole thing, it's $40 equals your rehab. Cost. So for example, you have a 1,000 square foot house that just needs carpet and paint, probably gonna cost $18,000 cuz you're doing 1,000 square feet times $18. Very easy. Didn't need to go dive in deep into like a full rehab estimate spreadsheet. I just need to know square footage. Is it light, average, or heavy? And if you're like, well, what makes something light, Nathan? Well, right here. If you don't have to touch the cabinets or the bathrooms and all you gotta do is carpet, tile, paint, and carpet or flooring, it's usually light.

It's a light rehab.

If you have to start venturing into bathrooms and cabinets and kitchens, then you're talking an average rehab. If you got to do everything from a gut job, we're talking windows, everything, it's 40, and that's like a gut job.

And these are average numbers, right?

It could go up, it could be lower, but I would say 40, 24, and 18 are good. So if you're talking to a seller and you're like, hey, you know, I'm interested in buying your house and tell me a little bit about the property. And you're like, has the kitchen been updated in the last 5 years? No, it hasn't. Okay. How about the bathrooms? Have the bathrooms been updated? In the last 5 or 10 years? Yeah, we just updated them last year. Okay. So I don't have to worry about the bathrooms, right? Then you're like, okay, kitchen, yes. Bathrooms, no, those are okay. And carpet and paint. So you're right in between like an 18 to 24, because you're not having to do the bathroom. So again, really easy to determine what you need to get a property for. ARV, what is this property worth flipped? How much do my repairs need to be? Now we've gone over both. You've looked at flip comparables, you know that it's worth $300,000. You know that this house, In this example, it's 1,000 square feet. It needs $24 per square foot. In this example, $24,000 rehab.

So you have the rehab and you have the ARV now.

Okay. So that's two parts of the formula.

And then now you calculate your offer that you can buy it at.

And the way I do it is depending on if I'm talking to an analytical buyer or sorry, seller, I sometimes even show them my rehab calculations and be like, hey, this is why I have to be here. Cause I got to make some money, but determining everything we talked about, I can resell for $300,000. I got to put in $24,000. I need to make $20,000-$50,000. I hope you understand I'm a business. I sometimes walk people through my numbers so they understand why my offer is $150,000 less than what they believe their house is worth. This is the quickest way to determine if you're talking to a motivated seller is forget all this noise, all the stuff I just showed you, look up someone's house on Zillow and offer them 50% of their estimate. That's the easiest way to determine if you have a deal, because if someone doesn't get off the phone with you, then obviously you have someone that you can work work with, right? Another quick way to do it is 70% of the ARV. All you do is you find the ARV and you could do this formula. So let's say the house is worth $300,000. You say, okay, 70% of that minus— we talked about $24,000 in repairs minus my wholesale fee. I want to make $15,000— $171,000. If I offered $171,000 to the seller and they accept, I'm going to make at least $15,000. The flipper will have his costs of $24,000 in there, and then the profit, the expenses of the hard money, all that stuff is calculated in the 70%. That's what the 70% is. The 70% includes the 6% in commissions and fees for relisting it. It also includes the closing costs, the profit. So one thing that everyone needs to know that's watching this is do not waste your time running comps on a property where you don't have the seller on the phone. Complete waste of time.

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