How to Start Wholesaling Real Estate Step-by-Step with No Money (Beginners Guide 2024)

In this article, I’m going to show you how to make money wholesaling real estate and how I went from not knowing the first thing about it to doing nearly 1,000 house deals.

By the end, you will have learned exactly how to start wholesaling houses so that you can begin on your path to financial freedom.

Read on to start learning.

Wholesaling houses involves putting a house under contract and then assigning that contract to another investor (end buyer) for a fee.

In order to avoid costly mistakes, it’s important to follow a proven path to success in wholesaling houses. Let’s dig into my checklist for how to wholesale houses without money step-by-step.

Just as you wouldn’t begin a long road trip without first determining your destination and then the route you plan to take, you shouldn’t start wholesaling without a plan.

This is the true first step to wholesaling real estate.

Too many excited real estate newbies jump in by trying to find properties. If you don’t know what you are looking for and why, you will just grow frustrated and quit. I don’t want that for you. I want you to succeed.

The purpose of wholesaling houses is usually to make quick profits of tens of thousands of dollars so that you can do more deals and eventually have the confidence to start flipping houses.

The amount you feel you need to make is your call and will be different for different people. I like to suggest wholesaling at least 3 properties making you around $25,000 so you gain the confidence that the deals you are doing are financially viable as investments.

Your plan will also include what marketing methods you will attempt to use and your budget for this marketing. Let’s cover that now.

While most people start by looking for deals on Zillow, or Realtor.com, I advise against this. I spent 9 months chasing properties listed by local realtors only to get frustrated and burned out.

It wasn’t until I started marketing directly to motivated sellers that I found easily repeatable success.

You will need a game plan, otherwise you will end up in the weeds. Ask me how I know…

First, find an area of town where the houses are at least 20 to 30 years old and the prices are near the median for your city or town.

According to Zillow, my investment market of San Antonio TX, currently has an average home price of $259,675. So when wholesaling real estate in Texas, the sweet spot for me is where houses are selling for around $250k.

Ideally, your target area will be where there are already house flips going on. You will know because as you drive through them, you will see roll-off dumpsters in the driveways and contractor trucks and vans parked outside.

This is a great time to start finding deals. While driving around in these areas, write down the address for any house that looks to be in complete disrepair and/or vacant.

If you do not find at least 5 of these houses within an hour of driving, you probably want to look in another area.

This process is called driving for dollars. And it’s easier to do it by utilizing one of the best driving for dollars apps (DealMachine, REsimpli, REIRail, Propelio, and others).

Integrated with real estate skip tracing services, these apps for real estate investors and real estate wholesalers show you information about a property’s liens and delinquent payments, as well as the owner’s contact details.

Alternatively, armed with these addresses written down manually, you can find the owner by looking them up on your local tax assessor’s website. This process is called real estate skip tracing.

Search each address and see who gets the tax bill and at what address. You can then use wholesale real estate direct mail or real estate investor direct mail services to send them a simple letter asking if they would be interested in selling the house for cash.

Here are good resources to learn how to send direct mail:

• a guide on real estate investor direct mail marketing
• sample letter to motivated sellers
• sample letter to distressed homeowners

In the letter, you will offer the owner to buy their house for cash. Do not worry if you do not have the cash to buy a property — the investor you assign your contract to will.

Alternatively to sending a letter, you can call the owner. Here are four effective wholesale real estate cold call scripts and motivated seller phone scripts to use, depending on the type of the distressed homeowner you are dealing with.

Also, know the questions to ask motivated sellers to qualify them: you need to make sure they are highly motivated to sell at a discount.

While you are driving the area, stop at any rehabs currently in progress. This is my favorite way to find quality contractors for future flips. They can also help you determine repair estimates!

You will also want to ask the contractor if the owner is a real estate investor. This is how you start building a cash buyers list to wholesale real estate. This list will be who you contact when you have a house under contract to wholesale!

Alternatively to seeking homes in bad condition, you can focus on finding houses with financial problems attached. Their owners may want to sell the home to an investor to get rid of a property they can’t afford. Here are a few helpful resources to study:

• How to Find Houses to Wholesale
• How to Find Foreclosures
• How to Find Properties with Tax Liens
• How to Find Distressed Properties

Virtual Wholesaling

Many real estate investors live in areas where starting a wholesaling or house flipping career is made more difficult due to high home prices. So, what they do is find a great market, anywhere in the US, with lower property prices and wholesale virtually.

Since the pandemic, many more people are comfortable interacting virtually by using video phone calls via Facetime or Zoom.

While virtual wholesaling is outside the scope of this article, I did want to make you aware of it in case you feel your market is far too expensive.

This step usually invokes stress that causes night sweats and mental shutdown. It should not.

The key is to be as objective as possible. Understand also that analyzing real estate deals is not an exact science.

If you give the same deal to five different local investor home buyers for analysis, you are going to get five different opinions on what to pay for that house. So do not sweat it!

The key is to know how the best buyers on your “buyers list” determine what they will pay for a house for sale in your area.

This is most important because these are the people you are going to assign the contract to.

Take those investors that are doing a lot of deals in the area to lunch and ask them how they analyze the houses they acquire.

Local real estate cash buyers and iBuyer companies have their deal analysis dialed in, and you can learn a lot from seeing how they do it. Read this real estate investment due diligence checklist guide to have a better idea of how investors think.

If you do not have the opportunity to learn from other local investors, you will want to befriend a local investor-friendly real estate agent or someone that has access to the MLS — the Multiple Listing Service where realtors list houses for sale.

The MLS database has information on what houses have sold for. These sold properties are called comparables (or comps).

When you know what houses sold for, especially ones that needed a ton of repairs, you can have a better idea of what you might be able to sell yours for.

If there are not any good comps for houses that were in disrepair, you will want to determine what similar houses sold for that were in great shape. This value will be your ARV or After Repair Value.

Most investors buy at a certain percentage of the ARV. If real estate investors in your area buy at 75% of ARV, you can be confident in buying the house at 75% of ARV minus the cost of repair and your wholesale fee.

I recommend always shooting for no less than $10,000 for your wholesale fee. This allows you to make more, but also builds in some safety in case you need to give up some of that fee to get the deal closed.

If analyzing deals scares you, practice it. Seriously, choose some houses that are for sale in your area and analyze them. It is much easier when the stress of making a real world mistake is gone.

This is the best time to find where you do not know how to determine the cost of something. You will have time to be able to reach out to people with experience, such as real estate investing mentors, to help teach you.

It will be far more difficult to do this when you are in a situation where you are truly considering whether to buy a house from a motivated seller.

Lastly, there are investment property analysis software tools such as PropStream, DealCheck, or REIPro, and house flipping software (FlipperForce, House Flipping Spreadsheet, Flipster) that help automate the deal analysis process.

This is where the rubber really meets the road! Congratulations! A seller wants to sell their house to you. Here’s how to get it under contract and protect yourself in the process.

I prefer to use a simple one page contract template of a Purchase and Sale Agreement. This is much easier to explain to a seller. Realtor contracts are usually ten pages or more and can quickly overwhelm a seller.

The key to a good purchase and sale agreement is that it has ‘and/or assigns’ after the name of the buyer.

This is because, you as the buyer will be assigning the contract to someone else. When you assign a contract, you are basically selling your interest in the deal to another buyer who will become responsible for closing the deal according to the contract.

Technically, the contract doesn’t have to specifically say ‘and/or assigns’ as long as it does not say you cannot assign it.

But, I want to make sure what I am doing is clear so I have ‘and/or assigns’ in my contracts.

The contract should also spell out the following:

• buyer and seller names
• property address
• legal description
• purchase amount
• earnest money deposit amount
• place and date of closing
• and a clause stating what will happen if either buyer or seller does not close

Typically, the clause for not closing will read that if the buyer does not close, the seller keeps the earnest money and if the seller doesn’t sell, the buyer gets their earnest money back.

I’m sure you are curious as to whether you should tell the seller that you will be finding another person to assign the contract to.

I’ll answer that question in detail in the Real Estate Wholesaling FAQs section below.

The next step in this journey to wholesale your first house is to find a real estate investor who would be a qualified buyer for your contracted property.

The two main types of real estate investors you are looking for are house flippers and landlords.

Find a Cash Buyer

The most reliable way to find a buyer quickly for any deal is using a list of local cash buyers. Here is how to build a cash buyer list for wholesaling real estate.

Building your own list takes time. But you don’t have to wait until your list is ready to wholesale your first home. You can use someone else’s list.

Another real estate professional, such as a local wholesaler or real estate agent, may lend their list to you at a fee. It may be expensive though, up to half of your assignment fee.

Or, you can use a property syndication tool created by Real Estate Bees. The tool is designed for wholesalers to take advantage of Real Estate Bees’ extensive nationwide list of cash home buyers to blast them contracted properties for free.

To take use this cutting-edge functionality, create your free account and list your contracted properties.

Qualify Your Buyer

It’s critically important that who you assign the contract to has the ability to close the deal.

You do not want to have to tell the seller you won’t be closing.

Here is how to find a great buyer and avoid that awkward situation altogether.

You will want to get many photos and a video of the entire house. This will allow potential buyers to see what they are going to get if they buy the house.

This will “prescreen” a lot of the potential buyers. You want to avoid wasting time with investors that might back out of the deal.

Another way to ensure you have a solid buyer is to require them to make a non-refundable deposit of at least $2,000.

This amount should be greater than whatever earnest money you paid to put the house under contract.

The deposit should be made payable to you and not the local title company. It is non-refundable so the buyer should not have a problem with this.

Obviously, if the deal doesn’t close because of something beyond your or the end buyer’s control, you should refund it to them.

If the owner is not currently living in the house, you can ask them if it would be alright to place a real estate lock box with the key on the front door.

This will allow you to show the house to prospective buyers without bothering the seller.

If you cannot get access to the house, you still have options. You could require any interested end buyers to pay the deposit before seeing the house.

Given plenty of photos and video of the house, they should be confident enough to do that.

Once a deposit is paid to you, you can be confident that scheduling with the owner again to show the house won’t be a waste of anyone’s time.

Also, with the assignment already signed, you do not have to worry about this end buyer going behind your back to work a better deal directly with the seller. This has been known to happen and is never fun.

The actual assignment of contract is a simple document you have a local real estate attorney draw up for you.

It needs to reference the contract between you and the seller. It needs to specify how much of a wholesale fee you will be paid at closing.

It needs to specify how much of a non-refundable deposit is being paid to you and whether you’ve received it.

An attorney can help with more specifics relating to ensuring the contract is a valid contract according to local laws.

Once you and the end buyer have signed this ‘Assignment of Contract’ contract, all you have to do is wait until closing.

The new end buyer will be responsible for working with the title and escrow company or closing attorney to ensure all is ready to close.

At closing, you will be paid a portion of the proceeds for your wholesale fee as spelled out in your Assignment of Contract template.

Please note that the contract templates I share in this article are the contracts I personally use in my own business.

I’m not an attorney. Therefore, it should not be considered as legal, financial, or investment advice.

Before you use provided contracts in your own business, I highly recommend that you have them reviewed by an attorney specializing in real estate law in the municipality where you are going to operate.

The best thing you can do now is get a testimonial from the seller. They are likely very happy it all worked out like you said it would.

This will help you to build credibility with other sellers in the future.

A good place to collect testimonials to start establishing your reputation is a free business profile at Real Estate Bees, a national platform for real estate professionals.

Sign up for your free account and ask your seller to leave an honest review on your company’s business profile page.

When learning how to get started in wholesaling real estate, there are quite a few sources of great information.

The key is to find information from someone who is actively buying and wholesaling houses. If they have been in the business for over 15 years, that’s even better as they likely have gone through big market changes.

Learning from someone like this can help you avoid costly mistakes that destroyed a lot of investors in 2008.

If you are serious and want to know how to start a wholesale real estate business, you should check out some of the following resources.

Here are some great places to learn real estate wholesaling. Many of these sources are from people that I’ve personally worked with or interviewed for my podcast.

Real Estate Wholesaling Podcasts

Here are some of the best podcasts for wholesaling real estate:

Flipping Junkie Podcast — This is the wholesaling and house flipping podcast I’ve been hosting for over 7 years. These episodes are wholesaling specific:

• Is Wholesaling Real Estate Illegal?
• Virtual Wholesaling
• Maximizing Your Deal Profit

Wholesaling Inc Podcast — This podcast was started by Tom Krol and will not disappoint. I’ve interviewed Tom several times on my podcast, and he is a master wholesaler. They also have a Wholesaling Inc. course.

Real Estate Investing Mastery Podcast — Joe McCall’s podcast is full of cutting edge wholesaling tips. He stays on top of new technologies and shares how to use them to be a better real estate wholesaler.

Real Estate Wholesaling Courses

There are quite a few free real estate investment courses out there. Here are a couple that will give you a great start:

1. Don Costa’s Rookie Playbook — Don is a good friend of mine that has been real estate investing for several decades. He truly cares about the success of his students. Be sure to check out his free rookie playbook.
2. Free Wholesaling Training by David Dodge and Mike Slane — David and Mike will teach you how to find great deals, talk with sellers, get great deals and profit from each deal along the way.

While free real estate mentoring programs can be a great start, you often will have gaps in your knowledge.

Where do you turn when you need to know the next step when something doesn’t go exactly as planned? This is where a good paid course can be worth its weight in gold.

Here are a number of great paid real estate wholesaling courses:

1. Joe McCall’s Automated Wholesaling Course — Joe covers all the bases in this wholesaling course. The course is great but the real gold is found in the Q&A’s and coaching calls.
2. REWW Real Estate Wholesale Mastery Certification — Ken Clothier has put together a thorough training program that teaches all of the ins and outs of wholesaling real estate. While I have not gone through this course, I have gone through some of his others and always learned something new that helped me profit more in my real estate investing.

Books on Real Estate Wholesaling

The Real Estate Wholesaling Bible — This real estate investor book by Than Merrill will get you pumped and ready to start wholesaling real estate.

I first learned about Than from the hit TV show ‘Flip This House’. He is very knowledgeable and entertaining. If you’re looking for a book that isn’t ‘dry’, this is it.

If You Can’t Wholesale After This: I’ve Got Nothing For You — Todd Fleming can come up with a mean book title.

He can also come up with a great way to educate people on how to wholesale real estate. His book dives into how to wholesale without using your money or credit.

Read thorough reviews of these as well as other great books in the Real Estate Bees’ guide listing the best books on real estate wholesaling.

In addition, I’d highly recommend checking out some of the best real estate investing books of all time to expand your horizon even further.

Visiting retailers of the books listed in this section by clicking links within our content may earn us commissions from your purchases, but we never receive any compensation for the inclusion of products and/or services in our guides. Read our editorial guidelines to learn more about our review and rating process.

— Kimberly Anderson, Senior Creative Editor at Real Estate Bees

You have a couple of options when it comes to becoming a real estate wholesaler.

Do It Yourself

What most people do is get educated and do it themselves. I feel this is the best way to go. You learn by doing.

This route will force you to jump in and take some chances. This will force you to get out of your comfort zone.

You will make mistakes, but that’s ok. It might take longer for you to generate a high enough income to quit your job. But, you will be much more confident that you are truly ready to do so.

What it gives you is the power to determine how you like to operate. It forces you to do everything so that you know how each part of the business works.

This way you know what to expect when you eventually hire out some of the positions you do not like.

You can limit some of the mistakes by finding a real estate wholesaling mentor. You can find these at local real estate investor association meetings or meetups at local real estate investment clubs.

Buy a Franchise

There are some real estate investing franchise options where you buy into the franchise and tap into the resources available.

This is like paying for a mentor to help you with systems and processes that have already been proven.

The pros are you get your business up and running quickly.

The major cons are the high costs involved and the lack of creativity. When you are just coloring by numbers, this can be very boring for some.

I personally like the creative aspect of figuring out how my business should operate. Maybe you do too.

So, at what age can you start wholesaling real estate? That really just boils down to how old you need to be to enter into a legally binding contract.

To enter a legally binding contract anywhere in the U.S., you need to be 18 years of age or older. Otherwise, you can partner with someone who is of age.

There has been a big misunderstanding between agents and wholesalers.

That misunderstanding is centered around whether you are, as a wholesaler, brokering a real estate deal between a buyer and a seller.

In order to do that, many states require you to have a real estate license. In other states, it’s one of the real estate jobs that don’t require a license.

The difference here is in the details. You will have a vested interest in the property as soon as you have an executed contract to buy it.

You are then marketing to sell that contract to an end buyer. Therefore, you do not need a real estate license to wholesale real estate.

The other option is to find financing and buy the house before you sell the house to another investor.

Some suggest you get licensed as an agent regardless. There are pros and cons to this approach.

The pros are that you can gain access to the MLS and can market your property there as well as have access to a plethora of great comparables.

The cons are that you are held to a higher standard as an agent and must disclose that you are an agent in your marketing.

Not a huge deal, and you should hold yourself to a higher standard anyway.

So, how much does it cost to wholesale real estate? Not much.

The biggest costs you are going to have are marketing for deals. When you are assigning contracts, the only upfront cost you have is the earnest money deposit, which can be any number the seller will accept.

I routinely give $25 for earnest money. If you act like it’s not a big deal, it won’t be treated as a big deal.

If you need to close on the houses instead of assigning contracts (the double closing wholesaling strategy), you will need to find a source of funding to buy the houses.

Typically, these houses are in disrepair and traditional financing won’t work.

In this circumstance, you can make use of hard money lenders. These are usually private money lenders that will do higher risk investment loans that traditional lenders won’t touch. Often, investors use them to finance a house flip.

The reason they are called hard or private money lenders is that the interest tends to be much higher. Expect a higher interest rate and a shorter loan term. Here is a guide on how much hard money lenders charge and tips on how to qualify for a hard money loan.

I think hard money lenders are great, even if they are expensive. This is because with real estate investing, it is not uncommon to have profits that are $30,000 or more.

Yes. I believe you should be upfront and honest with the seller. There is a way you can word it so that it doesn’t turn them off to the deal. Here’s what I usually say:

“I can possibly get the deal closed for X amount of cash. But, I know you want much more and I feel I can get it but I need to check with my group of local real estate investors.

The thing is, they won’t typically even look at the deal unless I have it under contract. This is a great way to get more for your house though. How does that sound to you?”

You will be amazed by how well this works and how great it feels to know that you aren’t trying to sneak around and hide your intentions.

My preferred method for generating motivated seller leads for real estate wholesaling is through online marketing.

Over the years, through the real estate investor SEO strategy, my website has generated thousands of leads — various types of motivated sellers. This has led to hundreds of deals.

Why do I prefer finding motivated sellers online?

Because when a seller is googling for something like ‘sell my house fast in San Antonio’ or ‘who buys houses in San Antonio’ or ‘cash house buyers near me’, they are showing they are already aware of a problem they want to solve.

When they find DannyBuysHouses.com in the search results, they are only looking for whether or not they trust me enough to reach out.

Of course, I provide tons of testimonials and reviews on my website. This builds instant credibility and trust.

Contrast that with other forms of “outbound” marketing where you are sending thousands of letters out and hoping they find someone that could be thinking about possibly selling.

The motivation just isn’t there for the vast majority of who receives your letter. This really stinks when you have to pay for each of those letters, even when they reach people that have no need for your service as a house buyer.

Getting a website is fairly easy. There are dozens of good real estate investor website templates for wholesalers that have all the basic functionality you need. The most popular one is Investor Carrot.

Of course, you can also simply buy motivated seller leads for wholesalers from Pay Per Lead marketplaces like Real Estate Bees, Motivated Leads, NeedToSellMyHouseFast, and others.

At the same time, you can utilize different real estate investor lead generation software available for wholesalers.

But if you are serious about building a solid business, you need to establish your own wholesale real estate lead generation process.

Once you’ve gotten a constant flow of leads, use a wholesale real estate CRM or a real estate investor CRM. This real estate wholesaling software will help you manage leads in high amounts without having potential deals fall through the cracks.

I hope you’ve learned enough here to get started wholesaling real estate. It’s a fantastic way to get into real estate investing without having a ton of money or real estate experience.

I encourage you to continue your education but also to start taking action. Schedule a day on the weekend to drive a couple neighborhoods looking for vacant houses — it’s basically a way to find motivated sellers for free.

You might be surprised at what you can find as well as find out what you are capable of! Here’s to your financial freedom!

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About the Author

Danny Johnson started wholesaling and flipping houses in 2003. Since then, he’s bought and sold nearly 1,000 houses in San Antonio, TX. A real estate entrepreneur with 2 decades of house buying experience (house flipping, wholesaling, rehabbing, renting, real estate notes), Danny is passionate about sharing his knowledge.

This is why Danny started blogging in 2010 at FlippingJunkie.com and became the host of the FlippingJunkie podcast on real estate investing in 2017. He is also a private pilot who loves taking to the air in his experimental airplane. Danny also wrote a best selling book titled, ‘Flipping Houses Exposed: 34 Weeks In the Life of a Successful Real Estate Investor’.