Blog - DealMachine for Real Estate Investing

How To Start Wholesaling Real Estate Step By Step

Written by Samantha Ankney | Jul 27, 2024 2:30:00 PM

We reviewed real investor stories, current housing market pricing data, and what consistently works for beginners, and this is what we came up with.

If your goal is to quit the 9 to 5 fast, the best starting point is usually cash wholesaling. It is clear, repeatable, and low-cost. Creative finance can be powerful, but it adds extra steps and risk. For most people, it is better after you have a few cash deals under your belt.

This is not just theory. Ryan used wholesaling to leave his job in 2019.

“I got started in wholesaling to get in a position to leave my 9 to 5. I did it and have not been in one since 2019.” — Ryan

Mike and Jae also kept it simple. Their first deal paid about $6,680. They got the home under contract for $40,000, closed in 30 days, and spent nothing on ads.

“We did everything with free marketing. Facebook groups. A bright sign that says ‘I pay full price for homes, as is, any condition.’ Sellers DM us.” — Mike

That is the playbook this guide follows.

What Wholesaling Real Estate Is

Wholesale real estate is when you find a discounted property and put it under contract, then you sell your contract position to a cash buyer for a fee.

You are not fixing the house. You are not listing it. Your job is to:

  1. Find a motivated seller
  2. Lock up a good deal with a signed contract
  3. Find a cash buyer who wants it
  4. Assign the contract or do a double closing

The Three People In A Wholesale Deal

A simple wholesale deal has three roles:

  • Seller: wants to sell fast, often as-is
  • Wholesaler: finds the deal and controls it with a contract
  • Cash Buyer: wants to buy at a price that leaves room for repairs and profit

When you keep those roles clear, the deal is easier to explain, easier to close, and easier to repeat.

The Anatomy Of A Wholesale Deal

Here is the deal flow you should picture every time:

  1. Seller signs a purchase agreement with you (the wholesaler).
  2. You market the deal to your cash buyers.
  3. Buyer signs an assignment agreement (or you set up a double close).
  4. The title company closes the deal.
  5. The seller gets paid, the buyer gets the property, and you get your assignment fee.

If you want to turn this into a simple infographic on your blog, title it “The Anatomy Of A Wholesale Deal and show:

  • The purchase agreement between the seller and the wholesaler
  • The assignment agreement between the wholesaler and buyer
  • Money flows through the title company to each party

That visual alone helps beginners understand wholesaling faster.

Why Cash Wholesaling Is The Best Way To Start

Cash wholesaling is the easiest “on-ramp” for a few reasons:

  • You can start without a big budget.
  • You learn the core skills that matter in every real estate strategy.
  • You do not need to qualify for a loan to get your first check.
  • You build a buyer list that keeps paying you over time.

It also fits today’s market. Median home prices in major cities can be high, which creates a real gap between what many retail buyers pay and what investors can pay after repairs.

For example, Redfin’s housing market pages show recent median sale prices around:

  • Chicago: about $390,000
  • Dallas: about $411,000
  • Atlanta: about $378,000

(Those numbers move month to month, so always check the latest on the source pages.)

This is where wholesaling can work well: you are not competing for retail-ready homes. You are finding off-market properties with problems, then matching them with investors who solve those problems.

How To Start Wholesaling Real Estate: A Simple Weekly Plan

If you do not have a clear weekly plan, wholesaling turns into a random activity. Random activity does not replace a paycheck.

Here is a beginner plan you can start this week.

Step 1: Pick One Target Area And One Deal Type

Start in one city or one tight area of a city. You want to learn the neighborhood prices, buyer demand, and common repair issues.

Also, pick one deal type:

  • Cash assignment deals are the simplest starting point.

Avoid trying to learn everything at once. Reps beat complexity.

Step 2: Use Free Inbound Lead Sources First

Inbound leads mean sellers reach out to you. For many beginners, that is easier than cold calling.

Mike and Jae proved this with free Facebook marketing:

“We did everything with free marketing. Facebook groups… Sellers DM us.” — Mike

Free inbound lead channels to start with:

  • Local Facebook yard sale and community groups
  • Neighborhood groups
  • Referrals from friends and coworkers
  • Driving for dollars, then skipping tracing and outreach

DealMachine helps a lot here because it is built to find off-market properties and organize leads. You can track a property from “found it” to “made an offer” to “under contract” without losing notes or follow-ups.

Step 3: Use A Short Seller Script And Stay Calm

You do not need fancy sales talk. You need clear information.

Ask:

  • What is the address?
  • What condition is the home in?
  • Why do they want to sell?
  • What is their timeline?
  • What price do they want?
  • Is there a mortgage?
  • Any known liens or back taxes?

Your goal is to find motivated sellers and solve real problems. Be direct, but respectful.

Step 4: Run Comps And Estimate Repairs

You need a simple pricing process that matches your buyer pool.

Comps basics:

  • Look for nearby sold homes with a similar size and layout
  • Focus on recent sales when possible
  • Avoid comparing a fully renovated home to a dated home

Repair estimate basics (beginner-friendly):

  • Cosmetic updates (paint, flooring, fixtures) cost less than major systems
  • Roof, HVAC, plumbing, and foundation issues change the deal fast
  • If you are unsure, build an extra cushion into your offer

If your offer does not work for your buyers, you will struggle to sell the contract.

Step 5: Make Offers And Follow Up Like A Pro

Most beginners lose because they do not follow up. Sellers often need time. Motivation changes.

A simple cadence:

  • Day 1: offer
  • Day 2: quick check-in
  • Day 7: follow-up
  • Every 2 weeks: follow-up until the seller sells or tells you to stop

A CRM matters here. DealMachine helps you set tasks and reminders so you do not forget leads that turn into deals later.

Closing Costs For Wholesalers: Assignment Vs Double Close

Most wholesaling guides skip the closing details, even though closings are where deals fall apart. Here is a simple breakdown.

Assignment Closing: What You Should Expect

In an assignment, you have one closing. Your buyer closes on the property, and your assignment fee is paid at closing.

Common items that come up:

  • Earnest money deposit amount and timing
  • Title and escrow fees
  • Recording fees and transfer taxes (varies by location)
  • How the assignment fee is shown and paid at closing

Ask your title company how they handle assignments in your area. Practices can vary.

Double Closing: When It Can Make Sense

In a double close, there are two closings:

  1. You buy from the seller
  2. You sell to the end buyer

Wholesalers use double closes when:

  • A buyer does not want to see your fee
  • The seller does not want an assignment
  • You need more control over the transaction flow

Double closes often mean:

  • More title and escrow work
  • More fees because there are two closings
  • More moving parts, so timing matters more

This is why many beginners start with assignments first.

What To Do When Title Problems Show Up

Title problems are common on distressed properties. The key is how you respond.

Mike and Jae ran into a lien early and still got the deal done:

“We found a $5,000 mechanics lien. We split the cost with the seller and still got paid.” — Mik

When the title finds an issue, use a simple process:

  1. Ask the title company what the issue is and what it takes to clear it.
  2. Share the facts with the seller calmly.
  3. Offer a solution: price reduction, cost split, or more time.
  4. Keep your buyer informed so they do not panic.

Facts close deals. Emotion kills deals.

Wholesaling Ethics And Legal Compliance

If you want to build a real business, ethics and compliance are not optional. They help you close more deals because sellers and buyers trust you.

Here are simple rules that keep you safer and more professional.

Be Clear About Your Role

Do not mislead sellers. If you plan to assign the contract, be honest that you may bring a partner or buyer.

A simple way to say it:

  • “We buy with our partners, and we use a local title company to close.”

Do Not Promise What You Cannot Control

Avoid statements like:

  • “I guarantee we will close.”

Instead say:

  • “We will do our due diligence quickly and use a title company to confirm everything.”

Use Local Pros And Follow Local Rules

Wholesaling rules can vary by state. A local real estate attorney or a title agent can help you understand:

  • Disclosures you should use
  • Assignment rules and common practices
  • What marketing language is safe

If you later move into subject-to or other creative deals, you also need to understand that many mortgages include a due-on-sale clause. You can read the federal statute that addresses due-on-sale clauses here:

This is not legal advice. It is a reminder to do it right.

When To Add Creative Finance Later

Creative finance can unlock deals when equity is tight, but it is not the best first move for most beginners. Mike and Jae said it plainly:

“Wholesaling creative deals is not for beginners. Cash is the best way to start.” — Mike and Jae

A simple path that works:

  • Close 5 to 10 cash wholesale deals first
  • Build your buyer list and deal confidence
  • Then learn creative structures with an attorney
  • Only work with buyers who have proven they can perform

Your Next Steps: Keep It Simple And Take Action

If you want to leave your job, you need a plan that creates deal flow every week.

Here is a simple checklist to follow:

  • Post in local Facebook groups weekly
  • Respond to every seller message fast
  • Talk to sellers every week, even if you are nervous
  • Make offers and follow up until you get a yes or no
  • Build your buyer list as you go
  • Use a title company early so you do not guess on closings

Make your first post today. Take one seller call. Make one offer. Consistency wins.

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