Wholesaling Real Estate

Wholesaling Real Estate Guide for Beginners
Narrated by: William Bahl
Length: 1 hr and 46 mins
5 out of 5 stars (37 ratings)

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Publisher's Summary

If you've heard of flipping houses, but having given it a try because you lack the funds and skills, then real estate wholesaling might be a perfect start to begin your career as an investor. Why? Wholesaling doesn't require a huge amount of money for start-up fees, and you won't have to worry about making repairs. With our guide to wholesaling, you learn how to purchase and assign property in a matter of weeks, and leave the renovation worries to other investors. Wholesaling real estate is a quicker way to earn your fees, and it not near so nail-biting an experience. The risks associated with wholesaling are minimal because you aren't purchasing the home, you're only procuring the property to pass it to another investor who takes on the risks. Listen our guide and learn how to drive sellers and buyers to respond to your marketing. You'll be able to negotiate with the confidence of knowing that your learned communications skills and proven strategies will enable you to build your business successfully. You'll feel the reward of helping homeowners climb out from under the heavy burdens of a home they can no longer maintain or afford. Some of the strategies and skills you'll be learning within these pages are:

  • How to market for the highest profits and greatest number of responses
  • How to accurately analyze the market for accurate pricing and the most profits
  • When and how to work the wholesale process
  • What are the most common mistakes and how to avoid them
  • How to compete with other investors and "Hunt with the Big Dogs"
  • The importance of treating your business like a business

©2017 Samuel Gobar (P)2017 Samuel Gobar

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Go ALL IN

It sounds good in theory to wholesale these types of properties because the sellers are a business, and they are not emotionally attached to the home. Besides, they are already prepared to accept lowball offers. However, there are often stipulations that make wholesaling bank owned and HUD properties impossible. One major stumbling block is that many of these institutions require the buyer to live in the property or to own the home for at least 90 days.

If the property needed a lot of repairs, an investor who planned to flip the house would still qualify. But the 90-day clause could remove the middleman or the wholesaler. One way to get around these types of stipulations is to sign a "Bird Dog" contract with an investor and then never have your name on the Purchase Agreement between the investor and the seller. Your contract would only be for the investor. You would work almost as an independent contractor getting paid a flat fee for the job of finding them a home to flip.

Getting all your agreements together and knowing the ins and outs of wholesaling real estate can be quite a challenging endeavor, especially with the stiff competition in today’s market. For these reasons, we’ve included our next chapter in how you can compete with the bigger players in the investment arena.

24 people found this helpful

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Insider Tips worth hundreds alone!

In the US alone, population levels have grown from 180MM in the late '50s to 330MM+ today. And so, the highly competitive pricing increments in real estate have been reflected in the population growth over time. The $20K home of the '50s is now worth $500K or more. That's a 25x increment in value over time.

Gobar takes readers through the dynamics of building a personal financial statement in order to prepare prospective investors for the all important thrust into the world of investing in real estate. Real estate investment isn't just property accumulation. It's also investments in REITS, tax liens and other avenues of making passive income in real estate without the headaches of owning a property.

Overall, the thrust of this Gobar's book is good for the beginning investor in real estate. There are pitfalls in real estate investment like gaining good, knowing the property downsides, the neighborhood quality of life issues and much more.

21 people found this helpful

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Finally a True book with no Infomercial !

As important as what you do is when you do it when it comes to wholesaling real estate. For example, as a traditional real estate agent, you brand yourself, find a home to sell, market the home to attract a buyer, negotiate a purchase contract, and allowing both parties time to prepare for the move, you finally close the sale. From the listing appointment to the closing, it could be six months or more. With wholesaling, you first find your investor buyers, discover what type of homes they like to flip or rent. Next, you market your services to find a motivated seller and negotiate a discounted rate for the home. Finally, you write a contract on the house and then assign that agreement to the ready and willing buyer you have waiting in the wings. The process is almost a complete reverse of which most people are accustomed to experiencing. What's the best part about wholesaling? From developing relationships with investors to closing your first wholesale home, it could be a matter of weeks, not months. As you build your team and develop investor relationships, it's conceivable that from the purchase contract to the assignment, it could be just a few days.

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Getting my feet wet

When you market yourself, keep in mind what you want to achieve. Your marketing efforts are made in stages, so what is it you want to do in this step of your marketing? Are you trying to get a potential seller to contact you? Do you want to drive them to your website’s landing page? Are you trying to set up a meeting with them? Are you trying to convince them to take less for their home? Your goals are different at each stage of your marketing. Obviously, you will need to meet with the seller to purchase the home, so don’t try to sell them on discounting the house before you’ve even met them. Give yourself a chance to develop trust and build a relationship. As you talk to them on the phone, all you are attempting to do is set up a meeting, right? In your first conversation with potential sellers, you're not trying to purchase their home at a massive discount, all you want to do is begin to build a relationship with a potential seller and set up an appointment with them to explain your offering. Don't try to do it on the phone, building the relationship must come first.

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No guru needed

Some investors choose to wholesale real estate so they can build a nest egg for greater investment opportunities in a rental property or flips. The investors make a choice to wholesale out of necessity and not preference. However, if you know your talents are in building relationships and negotiations, then wholesaling can afford you income opportunities that more introverted investors would not achieve. As a wholesaler, you must trust your buyer to whom you assign the contract explicitly. If they have promised to close on or before the closing date of the purchase agreement, they must be able to fulfill the contract, or you will be responsible for doing so. If you don't want to get stuck with owning the home, you'll need to learn how to write a contract with an escape route. In our chapter on making the offer, we'll show you how to word contracts that protect you in case your buyer backs out and leaves you holding the "house" so to speak. The chance of assigning to "iffy" buyers is more of a worry in the beginning. As you become established in your wholesale business, your relationships are also more reliable and proven. Some independent wholesalers tend to bird dog for other investors for a while to learn all the ins and outs of wholesaling. Birddogs work with a larger investment team, and their job is to locate houses that work as flips or rental properties. Some are paid a salary and work in-house, while others collect a fee for every home they find that end in a successful close. They assume none of the risks and their name never goes on the contract. They don't negotiate the purchase contract, and they don't make the offer. All they do is find potential properties for flipping or renting.

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Solid Foundation on Flipping Properties

Be honest with the owners. Don’t try to sugarcoat the appearance or condition of their home. Talk to them about the fact that they obviously know their home is going to need some work, but don’t forget to talk to them about a few things you like as well. When you see that they are relaxing and hear them responding more openly to your questions, ask them what their plans are when they sell their home. Knowing their plans is imperative because this will let you know one of two things: their dreams or nightmares.

If they say they want to buy a boat and travel the coastline, then you’re going to enable them to follow their dreams. If they say they are going to have to live with their parents when they no longer own the house, then that’s a problem. They have no money to pay for the repairs on the house, and the longer they stay, the more they postpone their future. So, you're going to help them dump the house and begin saving for a better tomorrow. Whatever the owners' response is, either their dream or nightmare, you need to be the solution.

Now you want to ask them the second most important question. "SO, WHAT HAS BEEN HOLDING YOU BACK?" Asking this question will help you get to the reasoning behind their problem. It could be that they tried to sell their home, but they couldn't sell it for the price they were asking. Instead of dropping the price, they gave up. It could be that what has held them back was that they had listed the house in the past, but the traditional buyer couldn't get past the mess. You have the solution for that, right? Whatever they say has been holding them back, you be the solution to helping them.

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Great resource for all Real Estate Players

If you have deep pockets and money to burn, you can market your wholesale property the easy way. If you are willing to get creative and work a bit harder, we'll show you how to practice some effective marketing strategies without spending your bankroll. Marketing is everything in wholesaling real estate. If you don't like to market, you're not going to be pleased with your new career choice. To be a successful wholesaler, you need to put yourself out there on a regular basis. In traditional real estate sales, you're marketing your brand, along with a little self-promotion. When you wholesale property, people don't much care about your brand. Whether marketing to sellers or buyers, they've got problems that need solutions now, and they need to know that you have the immediate solution. Buyers, who are usually different types of investors, need homes they can fix and flip for a tidy sum, or hold for a planned period and make some money on a rental. They are busy and have little time to be searching for the homes they so desperately need to have to keep themselves afloat.

9 people found this helpful

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Read again material

This is a very good book educative on how to become a millionaire through real estate investing when you are still on daytime job.

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Price of this book should be thousands

This book is very informative and easy to follow. to get into the real estate and get wealthy to get the financial freedom you so much desire.
But also you have to find the important things in life you want to achieve.

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Incredibly helpful for the new real estate invest

Tell them a story here and there about your family and pets, and just talk to the owners as if they were your friends. Don’t make it all about business, be friendly and smile. They are already stressed enough to bring a stranger into their home in the condition it’s in, so put them at ease with casual conversation. If possible, sit down around the kitchen table to discuss the deal. Kitchen tables are a friendly, family location, and you’ll know they trust you when they let you sit down at the table. If they offer anything, accept it. That’s what friends do, right?

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  • Derek
  • 07-18-20

Quick notes for Wholesaling

Before you go any further with the house, you need to know if it is going to work for wholesaling. The first information is the financing on the home. Heavily financed homes create problems for the wholesaler because the lowest offer the sellers could accept is the amount owed on the property. For wholesaling to work, the owners must hold at least a 40 to 50 percent equitable position in the home. A home cannot be discounted below what is owed unless it's in foreclosure and the bank is willing to take less. Accepting less than the financed amount is called a short sale, and short sales can take lots of time. They will usually not be your best bet in contracting and closing property quickly.

The first thing you need to do is look up the home in your county assessor's public records. There you will find the loan information. However, it will only give you the first position lender. If the homeowners have taken out a second mortgage on the property, or if they have refinanced for more money, that is not disclosed in the public records. So, don't think every home you examine that shows a loan amount that is very low will qualify. These are just the homes that "might" qualify for wholesaling. If the financial information is not available online, you will need to visit the county clerk’s office to retrieve it.

If you want quick and easy retrieval of financial reporting, you can subscribe to a fee-paid company that can provide you with all the information online. One such company is Property Radar, which offers all kinds of financial information on the home. These service company reports will tell you the purchase price, the original loan amount, any refinancing, lenders in a second position, and the origination dates of each loan. There are many such services available; you just need to find the one that works best for you. Some only offer their services in certain states or areas, so search your area or ask another investor what company they use to get up-to-date information.

22 people found this helpful

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  • Nicole Dunigan
  • 07-20-20

No fluff, pure Strategies!

It's not enough to answer this question with a response like "I want to make money." Who doesn't? However, if making money is your payoff, you're probably not going to be in the business of wholesaling for very long. Money isn't the dream of many people. Their goals consist of the things they can buy with that money. The dream is an exotic vacation, a sports car, a speed boat, or financial freedom in retirement. It's not just looking at stacks of money. When deciding what you want wholesaling to do for you, allow yourself to dream, and dream BIG! Visualize yourself living your dream. Create a storyboard in your head that you can pull up when wholesaling gets tough, and you feel defeated by fruitless efforts. If you're a person who gives up after a few tries, then wholesaling real estate is going to test and challenge you. Wholesaling sometimes requires nerves of steel and the determination of a bull terrier. The bigger your dreams, the more determined you will be to see them turned into your reality. Real estate wholesaling is no different than any other start-up business. The highest hurdles to cross will be in the beginning, but our book will guide you around, and over the obstacles, you'll face as you build your wholesaling business. If you commit yourself to following our proven strategies, you'll experience one small success after another until you are ready to compete with the big-time investors.

19 people found this helpful

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  • Tegan
  • 07-26-20

Thumbs up - great read & info

When you bird dog for another investor, you spend no money on advertising because you don't have to find buyers. Usually, people who bird dog for investors do so by driving around until they see a home that might qualify, and then they share the information with their investor. Most bird dogs work independently and are paid a fee for every home they find that results in a sale. However, those who work in-house can also be responsible for handling the marketing efforts of the investment company. So, however you play it, to wholesale real estate you need to learn effective and efficient marketing strategies.

The beauty of bird dogging is that you get to the know the business without assuming the risks. If you work with a smart investor, what you will gain in experience and knowledge will work wonders in building your business. By the time you're ready to go it alone, you'll be financially and emotionally ready to take on all the challenges of building your wholesaling real estate business.

Remember, wholesalers’ profits are proportionate to the number of homes they can assign. The talent of a wholesaler is his or her ability to attract sellers and then persuade them to sell at a substantial discount. Don't feel as though you are taking advantage of the seller. If they are in a hurry to sell, they understand the need to cut the selling price, and they have weighed the pros and cons of doing so. You are only providing the vehicle for them to travel to the next chapter in their lives. It’s a service, and the sellers have a choice to accept or decline your offer. No matter how disappointed or angry they get when you make the offer, deep down they realize the services of a wholesaler do not come cheap.

14 people found this helpful

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  • Cynthia Johnson
  • 07-29-20

Beyond Grateful


Go into the "offer" process knowing that most sellers are going to show you the door when you offer them half of what they think their home is worth. If the owners dismiss you, be polite and leave your card. But don't give up and walk immediately. Give the owners time to bluster a bit. They need to let off steam, to blame you for their neglect, to vent and accuse. Swallow your pride and take the negative for a few moments. Whatever you do, never, never get angry and fight back.

Let them know there will be other repairs that you might not have counted on making. Then let them know that you are a problem solver, and encourage them by saying that you still believe there is a way for this to work.

Give the owners a piece of paper and ask them to write down what they would consider being an offer they could live with, and you do the same. Then compare the offers. Expect to be miles apart on what they say they will accept and what you offer. The reason you are using this strategy is that you want to get them to participate in the offer and not let their anger shut down the deal. Once you have each showed your acceptable figure, now you deal with only the difference between the numbers.

If they are still hesitant when you are getting close to your best and highest offer, then make some concessions that don't have to do with price. Remind them that you would be willing to close quickly, so they won't have to make even one more payment. Most purchases take 60 days to close, so add in the cost of two mortgage payments that they won't need to pay. Then let them know that your offer is not contingent upon financing, so they won't have to worry about holding on to the house forever only to find that the buyers couldn't qualify.

9 people found this helpful

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  • Joseph Lawson
  • 08-01-20

Get in to buying houses.

Remember, investors don't put much credibility in your company. In fact, they don't care how large or prosperous your business is. The investors are your buyers, and what they care about is how quickly you can find them a viable house to flip or rent for the greatest profit possible. Your potential buyers don't even care about how much they'll have to pay you to make that happen, just so there are sizeable profits left for them to glean after the purchase. Of course, the more you can entice them with greater profit potential, the more likely you are to get them to authorize your Agreement to Assign. So, where and how do you find these investors? The best way to contact investors and begin to build relationships with the players is to hang out where they hang out. One such place is online in the “Bigger Pockets” forum. Founder and CEO, Joshua Dorkin, created the site to address the problem of educating and connecting investors. Google it, and you will find a wealth of information and some powerhouse investors who are looking for what you have to offer as a wholesaler. Bigger Pockets is like an investor's social media spot, where active investors like Brandon Turner talk about recent deals they've made and the challenges that came along with them.

7 people found this helpful

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  • Ronal
  • 08-02-20

I prefer the book instead

To begin working with a few reliable investors, establish a relationship with a title company. Title agents know investors and have excellent working relationships with the bigger players. Title companies can be a wealth of information for you to find investors who will be interested in your properties. Remember, wholesaling is a contact sport, so go by and meet the title agent in person and let him or her know what you want to do. One of the things you can ask them to do is a title search that reveals the cash transactions over the last few months. Investors typically make cash deals, and the title company will give you the contact information of the homeowner. If you only have the address, you can look up the owners' names or company in public records. Once you get the information, send the investor a letter. You can recognize an investor because the homeowner will be a company name instead of an individual's name. Even if it's an individual's name, most traditional owners don't pay for a home in cash. If you already have a few homes under contract, send them fliers of your homes and let them know the purchase price. If you don't have any properties yet, then show them some photos of ones you are interested in purchasing. At this point, you're not trying to sell them the home; you're just attempting to set up a phone conference to see what types of properties they want. You're beginning to establish a trusting relationship with a potential buyer.

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  • Ruth Hudson
  • 08-08-20

Double Closing Broken Down

Every distressed sale is an owner with a problem, and it's your job to identify the problem so you can position yourself as the solution to their problem. The first thing to do is compel the sellers to acknowledge they need to sell their home no matter what it takes, so you need to take that problem and blow it up like a balloon until it pops wide open. You’ve got to make it impossible for the owners to consider not discounting the price and getting rid of their burden. Until you build a relationship with them, they are not going to trust you enough to share the real problem. They might put up some smoke screens to divert your attention, but you need to dig some to find the problem that lies deep beneath the surface of their intolerable situation. For example, let’s say you meet with the owners and you tour the home with them as they apologize for every room entered that is worse than the last. Ask them if you can take notes, and while you do don't forget to write things down that will help you relate to them later. Take your time. Pay attention to the family photos, and bend over to give the dog a few strokes and a kind word. Be likable. Ask lots of questions about the appliances, air conditioner, heating, roof, and all those things that are probably in need of repair.

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  • Efren Bright
  • 08-08-20

So easy, a caveman can do it.

Don’t worry that the investor is going to come in and steal the property from you because you already have it under contract. The Purchase Agreement is your insurance policy that you have tied up the property until you procure an able and willing buyer to whom you can assign the contract. It’s alright to give them the address, pictures, anything you see that will help them make the decision to own. Your concern, at this point, should be to ensure they can execute the contract at the date agreed upon between you and the seller.

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  • James
  • 08-08-20

As good as it gets

If there are any new highways, shopping centers, or schools coming into the area, make sure you have information on those plans for your buyer.

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  • Jennifer
  • 08-08-20

The first step in financial literacy

Understanding the dynamics of the residential real estate investment marketplace and acting in opposition to the rest of the market, you can often make more money, as long as you stick to the real estate investing fundamentals.