The best way or tips to Start Wholesaling?

[Emmanual Freeman]

What are some tips to start and learn wholesaling in Memphis? What are the first steps to take to learn the business?

[John Hixon]

@Emmanual Freeman @Gurdeep Walia Wholesaling or assigning is not difficult.  I started 5 months ago in Dallas and have closed 3 deals with a 4th on the way.  Here is how I do it.

The below numbers are just an example:

1. Find a property with an ARV of $250,000 that needs $35,000 in repairs. $250,000 X .7 = $175,000 - $35,000 = $140,000.

2. Find a buyer who is willing to pay you more then $140,000 say $150,000.

3. Assign the contract to the buyer for $150,000

4. Send contract and assignment to title company

5. At closing buyer brings  $150,000.  Seller get $140,000 you the wholesaler get $10,000 buyer gets the house.

Now, that is a very basic summary of how it works but it is not much more complicated in reality.   Now, here are some more tips:

1. You do need to put down earnest money like $3,000-$5,000 not $20 like some gurus preach.  

2. You need to be able to actually close on the deal if your buyer backs out.  If you do not have the funds to close then you do not need to be in the deal.

3. Do not use any weasel clauses like need "pending partners approval" or "pending financing approval"

These things just give real wholesalers bad raps and is the primary reason some states are cracking down on it.

Before you start marketing for properties I recommend you find a serious cash buyer.  I have one buyer who buys everything I get.  The great thing about having a serious buyer is you can ask him before you make the offer what they need the property at.  I send my buyer the address and estimated repairs.  He then tells me I need that property for $150,000.  So that tells me before making the offer how aggressive I can be.  Sometimes you just know that the owner will not accept less then $145,000 no matter what and if you were to offer less they would walk and never talk to you again.  So I can safely offer $145,000 and make a fast $5,000. Seller is happy, I'm happy and my buyer is happy.

The problem a lot of wholesaler run into is they find a property put it under contract for what they think is a good price and then they can't find a single buyer because the price is not good at all.  They then back out of the contract and leave the seller screwed.  That is why I would recommend finding a good buyer first.  

It is easy to find a buyer, just look in the MLS and a couple of neighborhoods where investors are buying properties and see who is buying up the properties. Give them a call and that is it.

Well, best of luck.