How to Get Started in Real Estate Wholesaling

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Learn how to get started in real estate wholesaling, from understanding what wholesaling is to finding leads, building a buyers list, and closing your first deal. This beginner-friendly guide breaks down every step in simple terms so you can start your real estate journey confidently.

Real estate wholesaling is a great entry point for aspiring investors who want to break into the property market without owning property or spending large amounts of money. If you’ve heard the buzz about wholesaling but aren’t quite sure how to get started, this guide will walk you through every step in an easy-to-follow way.

What Is Real Estate Wholesaling?

Wholesaling in real estate involves finding deeply discounted properties and getting them under contract, then assigning that contract to another buyer for a fee. Essentially, you're acting as a middleman between a motivated seller and a cash buyer.

Here’s how it works:

You find a property owner who wants to sell fast.
You sign a contract to buy the property.
You find a real estate investor who wants to buy it.
You assign the contract to the investor for a profit (called an “assignment fee”).

You never actually purchase the property yourself. This makes wholesaling a low-risk and low-capital way to make money in real estate.

Why Choose Wholesaling?

Wholesaling is attractive for several reasons:

Low startup cost: No need for large capital or credit.
Quick profits: Deals can close in a few weeks.
Low risk: You don’t own the property, so your exposure is limited.
Learning experience: Great way to learn how to evaluate deals and understand the real estate market.

Step 1: Understand the Legal Aspects

Before you dive in, understand your state laws about wholesaling. Some areas require you to be a licensed real estate agent to wholesale legally. Others allow it as long as the process is transparent.

Research your local real estate regulations or consult a real estate attorney to ensure you are compliant.

Step 2: Build a Strong Foundation

Even though you don’t need a degree or a license in most cases, it helps to learn the basics. Read books, watch YouTube tutorials, take online courses, and join wholesaling forums or Facebook groups. Networking with experienced wholesalers can be invaluable.

Step 3: Set Up Your Business

It’s a good idea to run your wholesaling as a business.

Create an LLC (Limited Liability Company) to protect yourself.
Open a business bank account.
Get a website or landing page to collect seller leads.

This makes you look professional and builds trust with sellers and buyers.

Step 4: Find Motivated Sellers

The key to wholesaling success is finding properties that are deeply discounted. These typically come from:

Distressed homeowners
Pre-foreclosures
Vacant properties
Probate or inherited homes
Landlords looking to exit

How to find these sellers:

Driving for dollars: Look for rundown homes while driving around neighborhoods.
Direct mail: Send postcards to absentee owners.
Bandit signs: Place signs around town that say “We Buy Houses.”
Online ads: Run Facebook or Google ads targeting motivated sellers.
Cold calling: Call owners of properties you find in public records.

Step 5: Analyze the Deal

You must know what a property is worth to negotiate the right price. Use the 70% Rule as a guideline:

Maximum Allowable Offer (MAO) = (After Repair Value x 70%) – Repair Costs

For example:

ARV (After Repair Value) = $200,000
Repair Costs = $30,000
MAO = ($200,000 x 0.70) – $30,000 = $110,000

This means you shouldn’t offer more than $110,000 to ensure there’s room for your fee and the investor's profit.

Step 6: Get the Property Under Contract

Once you’ve agreed on a price with the seller, get the property under contract. Use a wholesaling purchase agreement with a clause that allows you to assign the contract. Make sure both parties understand the process.

Important Tip: Include a contingency clause that lets you back out if you can’t find a buyer (e.g., “subject to partner approval”).

Step 7: Build Your Cash Buyers List

A cash buyer is typically a real estate investor who buys properties quickly without needing a mortgage.
Ways to build your list:

Attend local real estate meetups.
Join Facebook groups for real estate investors.
Post on Craigslist or property forums.
Use public records to see who recently bought with cash.
Partner with realtors who work with investors.

When you have a deal under contract, blast it out to your list with details, pictures, and your asking price.

Step 8: Assign the Contract and Close the Deal

Once you find a buyer who wants the deal, you’ll both sign an assignment of contract agreement. This transfers your right to buy the property to them in exchange for your assignment fee (usually $5,000–$20,000).

The buyer will close with the original seller, and you’ll receive your fee at closing from the title company or attorney.

Step 9: Rinse and Repeat

Wholesaling is all about consistency. The more leads you generate, the more deals you’ll close. Over time, you’ll develop a reputation, build a bigger buyer list, and improve your negotiation and marketing skills.

Final Thoughts

Getting started in real estate wholesaling takes effort, but it doesn’t require a lot of money or experience. The key is to educate yourself, take action, and stay persistent. With the right mindset and strategy, wholesaling can be a powerful way to build income and transition into other areas of real estate investing.