How wholesaling with little money works

[Nathan Barshinger]

Hi everyone, I've been researching wholesaling lately and I want to give it a go within a month or two if it's true that you can wholesale with little to no money out of your own pocket. From what I understand, you leave an option window in the contract between you and the seller to find a buyer and if you find a buyer, you sell them the contract? Also if I wouldn't be able to find a buyer in that given amount of time, would I be able to back out of the deal with no penalty?

All answers are greatly appreciated in advance!!!

[Lydia R.]

@Nathan Barshinger First of all: wholesaling with no money is a myth. You will spend some money on marketing. With the market being as competitive as it is now, you will be spending more money than if you had started a couple years ago. So if you think you are going to do this for no money then you should quit right now before you even start.

Second of all, the objective is to put properties under contract at prices that will be attractive to investors. You shouldnt go in with the attitude of ‘Oh I will just cancel the contract if I cant get a buyer'. Thats part of why wholesalershave such a bad reputation. If you are going to do this seriously then make sure you get educated so you know what you are doing. Then create a budget for your marketing and find marketing strategies that work within that budget. Things like driving for dollars, cold calling and door knocking are all low cost methods of finding and contacting potential leads. Next comes running you numbers. What are the comps? What are the repair costs? What is the ARV? Once youve answered those questions you will want to start negotiating with the seller and trying to find a number that the seller will agree to that still allows both you and your end buyer to make a profit.