Hi @Ethan Garrett,
Congratulations on taking control of your financial future at such a young age, and best of luck!
Here are some answers to your questions from my perspective.
Make sure you have a good idea on estimating rehab expenses. You don't need to be perfect because each rehabber is going to do different things, do them differently, and have different costs associated with them. But you do want to be in the ballpark and "see" what needs to be done to the property. Some people will use a square footage calculation, which is ok as long as you're adjusting based on what you see that needs to be done.
I think the indicator of a good deal vs. a bad deal is mainly the numbers. If you are going to make money, the buyer is going to make money, and the property isn't stuck in the middle of a war zone, you should be ok. Also, hopefully there won't be too many obstacles, but if they are, make sure you can see a plan to circumvent them.
Hidden costs in wholesaling is really perception. So many people think you don't need some money, but you do. For the basics, not a lot, but marketing can be costly depending on what you're doing. If you're doing a lot of mailing, that can be very expensive. If you're mainly using personal effort (driving for dollars, cold calling, etc.) your cost is more time than money. When it comes to marketing, you have to pursue the channels that work for you. If you are completely terrified of cold calling, take that into consideration. If you love talking to strangers on the phone, then take that into consideration as well.
Wholesale deals can sometimes complete very quickly when you have a seller who wants to get rid of their property immediately. On the other hand, you may find yourself touching base with a seller for quite a long time until they finally decide it's time to sell. Closings can normally go quickly as long as you have a good buyers list. Of course, with COVID, there are potentially additional delays.
Before you put a deal under contract, first and foremost, make sure you have a good contract. There's a lot to consider there. Also make sure you have a good buyers list. Once you do sign the contract, you want to assign it quickly before the contract expires.
Is it worth it? For most people, no. Most people will not succeed. You have to stick to it for a long time and commit to ongoing effort. It's going to take time to get off the ground, but if you keep at it, you will gain momentum.
Hidden dangers? Not sure. Be safe. Wear a mask when you go to someone's house. Again, make sure you have a good contract. You could lose your EMD if you're not ready to assign the contract quickly and don't have good/legitimate escape clauses. Note that some people look at escape clauses as dishonest ways to exit a contract when you never had a chance of executing it. However, there are very legitimate reasons to cancel a contract. That's what the due diligence phase is all about.
You have to have a good title company. All you really need is the seller, you, the buyer, and the title company. That said, you should have a good team of all sorts of professionals. You never know when you're going to need a good insurance agent, an attorney, a real estate agent, etc.
Should you disclose to the seller what you do? Absolutely! Don't tell them that you are going to buy the property if there's no chance of you doing that. Of course, if you have a good lender in your pocket, that's not necessarily off the table. Be honest above all else. If someone is scared off because you're wholesaling, they may not be a good deal anyway. Be honest about how you can help, and when you can't. You're not taking the place of an agent. If they're best bet is to sell through an agent, be honest about that.
Who should you talk to before you start? Everyone. Get involved in your local REI groups. Get to know realtors, lenders, insurance agents, lawyers, contractors, title agents, other wholesalers, and most importantly, all the investor/buyers you can meet.
Good luck!
