How to Find Wholesale Deals in Real Estate

We put together this guide by researching what works for active investors in the field and drawing from conversations like the one we had with Joshua Goode on the DealMachine REI Podcast. His story of going from zero wholesaling experience to closing his first $14,000 deal is worth studying, not just for the inspiration but for the specific decisions he made along the way.

Wholesaling real estate is one of the most accessible ways to get started as an investor. You do not need a lot of cash, nor do you need to own property to profit from it. The core idea is this: you find a motivated seller, get the property under contract at a price that works, and then assign that contract to a cash buyer for a fee.

But knowing the concept and actually knowing how to find wholesale deals are two different things. This guide covers the strategies, the numbers, and the real-world decisions that separate investors who find deals consistently from those who stay stuck in research mode.

What Makes a Wholesale Deal Actually Work

Before going after leads, you need to understand what you are looking for. A deal that works in wholesaling has three things: a motivated seller, a property priced below market value, and enough margin to pay you and still leave room for your buyer to profit.

Motivated sellers are usually dealing with something that makes speed more valuable to them than top dollar. That might be a looming foreclosure, an inherited property they cannot manage, a landlord tired of dealing with tenants, or a divorce that requires a fast sale. When you focus on these situations, you stop competing for listed properties where dozens of other buyers are watching the same MLS.

The goal is to find the seller before anyone else does. That is where the strategies below come in.

How to Calculate Your Maximum Allowable Offer

One of the most important skills in wholesaling is knowing how much you can offer. Offering too much leaves no room for your fee or your buyer's profit. Offering too little means deals fall apart.

The formula most wholesalers use is called the Maximum Allowable Offer, or MAO:

MAO = (ARV x 70%) - Repair Costs - Wholesale Fee

Here is what each part means:

• ARV (After Repair Value): The estimated market value of the property after it has been fully renovated
• 70% Rule: A standard buffer that accounts for the buyer's profit, holding costs, and closing costs
• Repair Costs: Your best estimate of what it will take to bring the property to full value
• Wholesale Fee: The amount you want to earn for assigning the contract, often somewhere between $5,000 and $20,000, depending on the deal

As a quick example: if a property has an ARV of $150,000, needs $20,000 in repairs, and you want a $10,000 fee, your MAO would be $ 150,000 - $20,000 - $10,000 = $ 120,000. That is the most you should offer the seller.

Getting comfortable with this math before you start making offers removes a lot of the guesswork and protects you from the mistake Joshua Goode made on his first deal, where his contract price was too high for his buyers. He caught it, renegotiated, and still closed. Not every deal gives you that second chance.

How to Find Wholesale Deals: 5 Strategies That Produce Results

1. Drive for Dollars

Driving for dollars means physically driving through neighborhoods to find properties with visible signs of distress: overgrown yards, boarded-up windows, peeling paint, rotting wood, or obvious deferred maintenance. These are often signs of an absentee or overwhelmed owner.

Once you spot a property, you log it, find the owner's contact information, and reach out directly. The DealMachine app lets you tag properties on the go, pull owner contact info, and send direct mail without going back to a desk. It turns your car into a prospecting tool.

This is a great starting strategy because it puts you in direct contact with properties your competition is not seeing.

2. Pull Targeted Lead Lists

Pairing driving for dollars with targeted lead lists puts you in front of sellers who have a statistical reason to want out. Here are the list types most commonly used by active wholesalers, along with what to look for when filtering them:

• Tired Landlord Lists: Target owners who have held rental properties for 10 or more years. Long ownership often signals equity buildup and fatigue with property management.
• High Equity Lists: Filter for owners with at least 50-60% equity in their property. High equity means room to negotiate below market value and still net them a meaningful payout.
• Tax Delinquent Lists: Owners behind on property taxes are often in financial distress and motivated to sell before the situation worsens.
• Absentee Owner Lists: Owners who do not live in the property are less emotionally attached and often more open to a quick sale.
• Pre-Foreclosure Lists: Homeowners who have received a notice of default and are running out of time. Speed is the value you bring here.

The stronger your list filters, the less time you spend on cold, unqualified conversations. DealMachine's List Builder lets you apply these filters and build targeted lists based on real property and ownership data.

Joshua Goode pulled the Tired Landlord list early in his journey. He had some success, and it helped him build early momentum before he found an approach that worked even better.

3. Direct-to-Agent Outreach

The strategy that gave Joshua the biggest boost was reaching out directly to real estate agents. Agents regularly work with sellers who need to move fast due to life circumstances: relocation, divorce, estate sales, and financial hardship. When an agent has a motivated seller, they often prefer working with a buyer who can close quickly over waiting for a financed buyer.

Joshua found this approach gave him faster momentum than working lead lists alone. The key is showing agents you are serious and that you can close. They do not care whether you plan to wholesale the deal. They care about their client getting to the closing table.

When working with listed properties, use a standard real estate purchase contract. These contracts are naturally assignable, which simplifies the wholesale process and keeps things clean for the agent and their client.

4. Direct Mail Campaigns

Direct mail remains one of the most reliable ways to reach motivated sellers, especially those who are not actively looking to sell but might be open to an offer. A well-written letter or postcard sent to the right list can generate inbound seller calls for weeks.

Consistency matters more than volume. A single mailer rarely produces results on its own. Sellers often need to see your name multiple times before they pick up the phone. A drip campaign that sends follow-up mail on a schedule keeps you in front of leads without requiring manual effort every time.

Marketing automation tools can handle this automatically once a lead enters your system. That means you focus your time on conversations, not logistics.

5. Cold Calling and Text Outreach

Phone and text outreach can move quickly when paired with a good list. The goal of the first call is not to close a deal. It is to determine whether the seller is interested in a conversation about selling. Keep it simple, ask questions, and listen more than you talk.

Important legal note: Text and phone outreach to property owners is governed by the Telephone Consumer Protection Act (TCPA). Before building a calling or texting campaign, make sure your contacts are scrubbed against the National Do Not Call (DNC) Registry and that your outreach methods comply with current TCPA regulations. Violations can result in significant fines. Consult a real estate attorney familiar with your state's laws before launching any outreach campaign.

How the Wholesale Contract Lifecycle Works

Understanding the full flow of a wholesale deal helps you explain it clearly to sellers and agents. Here is the basic path from first contact to closing fee:

1. Seller Contact: You identify a motivated seller and open a conversation
2. Property Analysis: You run your MAO formula and determine your offer range
3. Purchase Agreement: You and the seller sign a standard purchase contract at your negotiated price
4. Assignment Agreement: You find a cash buyer and sign an assignment agreement, transferring your contractual rights to them for a fee
5. Double Close (Optional): In some deals, you close twice: once to buy from the seller and again to sell to the buyer, rather than assigning the contract
6. Closing and Fee: The buyer closes with the seller (or with you in a double close), and you collect your assignment fee

Each step has legal implications depending on your state. Some states, including Illinois, have specific regulations around wholesaling that require careful review before you operate. Always work with a local real estate attorney to ensure your contracts and assignment process comply with your market.

What Joshua Goode's First Deal Really Teaches Us

Joshua's first deal looked like it was going to fall apart. He had a contract at $110,000, but buyers were willing to pay only $20,000 less. He had to go back to the seller, admit the issue, and renegotiate down to $70,000. He then found a buyer at $90,000 and walked away with $14,000.

That is the MAO formula working in real life. His initial contract did not leave enough room for his buyer. When he corrected the number, the deal worked.

As Joshua put it:

"You kind of want to go back to your seller and give them a lower number than what you actually needed at, hoping that when they come back to you, it's going to be at that number that you really need it at."

The lesson is not just about the math. It is about staying in the deal when things get uncomfortable. Joshua made a mistake, owned it, fixed it, and closed. That is the skill that compounds over time.

How to Build a Buyers List Before You Need It

Many new wholesalers wait until they have a deal under contract before thinking about buyers. That is a mistake. Build your buyer list first, so when you have a property, you have people ready to move.

Ways to build a buyer's list:

• Attend local real estate investment association (REIA) meetings
• Post in local real estate investor Facebook groups
• Search public records for recent cash purchases in your market. Cash buyers are your buyers.
• Network with local landlords, flippers, and rehabbers
• Ask every buyer you work with for referrals to other investors

A strong buyers list also gives you confidence when making offers. When you know you have buyers ready, the process of getting a contract under control feels a lot less risky.

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