Blog - DealMachine for Real Estate Investing

How To Get Started In Wholesale Real Estate

Written by Samantha Ankney | Apr 20, 2024 2:30:00 PM

Many people start in structured careers expecting long-term stability. But over time, that path can feel limiting. We researched real investor experiences, including a former aerospace engineer who built a wholesale business from scratch, to create a practical, real-world guide you can follow.

If you are serious about learning how to get started in wholesale real estate, you need more than surface-level advice. You need a system, legal clarity, and a repeatable process that works in real markets.

From Aerospace To Real Estate: A Real Investor Story

The investor in this story started as an aerospace intern. The career path looked solid, but he quickly realized he did not want the same lifestyle as his managers.

That moment led him to wholesale real estate.

In 2020, he and his business partner began testing marketing strategies. They started with cold calling and slowly built a system using virtual assistants. Within a year, they closed their first deal and earned $10,000.

More important than the money was the validation. The process worked.

Today, their focus is not just growth. It is about consistency and building a business that runs on systems rather than constant effort.

What Wholesaling Real Estate Really Involves

Wholesaling is a transaction business. You are not buying or fixing properties.

You are:

Your income comes from the assignment fee.

Example Deal Breakdown

Here is a simplified example based on common deal structures:

  • After Repair Value: $250,000
  • Repairs: $40,000
  • Investor Purchase Price: $150,000
  • Your Contract Price: $140,000
  • Assignment Fee: $10,000

This spread is your opportunity.

Understanding these numbers is critical. Many investors rely on housing data from sources like the Federal Reserve to understand market trends and pricing behavior.

The Wholesale Deal Lifecycle (Step-By-Step System)

To make this process easier to follow, here is a simplified flow of how a deal works:

Step 1: Lead Comes In

You generate leads through driving for dollars, cold calling, or direct mail.

Step 2: Seller Conversation

You ask questions to understand motivation, timeline, and condition.

Step 3: Analyze The Deal

You estimate repairs and calculate a safe offer price.

Step 4: Make An Offer

You present a price that works for both you and your buyer.

Step 5: Contract Signed

You secure the deal with an assignment-friendly contract.

Step 6: Find A Buyer

You market the deal to your buyer list.

Step 7: Assign The Contract

You transfer your contract rights and collect your fee.

Seller Conversation Flow (If/Then Logic)

This is where deals are won or lost.

Use this simple framework:

  • If the seller wants full market value → Disqualify or follow up later
  • If the seller needs to sell quickly, → Move forward
  • If the property needs repairs, → Adjust your offer
  • If the seller is unsure, → Schedule follow-up

The goal is not to pressure the seller. It is to understand their situation and provide a solution.

Legal Matrix: Understanding State Differences

Wholesale real estate is legal, but rules vary by state. This is where many beginners make mistakes.

Here are three general categories:

1. Assignment-Friendly States

These states allow contract assignments with fewer restrictions.

  • Common in many parts of the Midwest and South
  • Fewer disclosure requirements

2. Disclosure-Focused States

You can wholesale, but you must clearly disclose your role.

  • You must state you are selling your contract, not the property
  • Marketing language must be accurate

3. License-Sensitive States

These states have stricter rules.

  • You may need a real estate license in certain situations
  • Double closings are often used instead of assignments

Because laws change, always verify with a licensed attorney or your state real estate commission. You can also review general guidance from the Consumer Financial Protection Bureau.

Local Vs Virtual Wholesaling

As your business grows, you may expand beyond your local market.

Local Wholesaling

Pros:

  • Strong relationships
  • Better property knowledge
  • Easier inspections

Cons:

  • Limited geographic reach

Virtual Wholesaling

Pros:

  • Access to multiple markets
  • Scalable systems
  • Lower travel costs

Cons:

  • Requires strong processes
  • Harder to verify the property condition

Most investors start local, then expand once they build confidence and systems.

Building A Scalable System With DealMachine

The aerospace investors grew their business by focusing on systems.

They used:

  • Virtual assistants for outreach
  • Lead tracking systems
  • Inbound marketing channels

DealMachine helps simplify this by allowing you to:

  • Capture leads while driving for dollars
  • Contact property owners quickly
  • Track follow-up in one place

Consistency is what creates results. Tools help you stay consistent.

Key Metrics Every Wholesaler Should Track

If you want a predictable income, you must track your numbers.

Focus on:

  • Leads per week
  • Conversations per day
  • Contracts per month
  • Assignment fee per deal

These numbers help you understand what is working and where to improve.

Common Mistakes That Limit Growth

Waiting Too Long To Start

You learn faster by taking action.

Not Following Up

Many deals happen after multiple conversations.

Ignoring Legal Details

Contracts and disclosures matter. Always stay compliant.

Not Using Systems

Manual work slows growth and leads to missed opportunities.

A Clear Path To Your First Deal

If you want to learn how to get started in wholesale real estate, focus on three actions:

  1. Generate leads daily
  2. Talk to sellers consistently
  3. Track and improve your process

The aerospace engineer’s journey shows that success comes from consistent effort, not perfect timing.

You do not need everything figured out. You just need to start.

FAQs