The Newbie’s Guide to Wholesaling in 7 Simple Steps

The Newbie’s Guide to Wholesaling in 7 Simple Steps

3 min read
Marcus Maloney

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. Marcus has been named the “Equity King” for his impressive ability to find real estate opportunities with massive amounts of equity.

Marcus, a high school dropout, went from G.E.D. to M.B.A. Although his education has a major impact on his investment philosophy, the real impact came from his upbringing.

Marcus thrives on completing successful transactions. As a young kid, his parents and grandparents faced many challenges; as a result, it made him think of ways he could help. His mother and grandmother were avid investors—not in the market but in people. Marcus was a recipient of those investments. And his early years were hard work growing up on a farm.

Marcus was a strategist at an early age. To relieve the burden of his family buying him clothes when it was time to return to school, he decided to make a small investment that paid big dividends. Marcus decided to purchase a small piglet at the beginning of summer, feed it until it became fat, and then sell it to a local farmers’ auction before the school year started. This was one of his first transactions and the beginning of his adventure of finding equity in every opportunity.

Marcus’ hard work continues today: He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. Although wholesaling provides great money, he saw the opportunity to buy some of the deals he found and convert them into cash flowing rentals.

Marcus currently holds seven rentals, two of which are commercial units. He’s also done the unimaginable and purchased a school, which was converted to a daycare center. Again, he turns what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy to increase his portfolio without any money out of pocket.

Marcus has been featured on numerous podcasts, such as the Louisville Gal Podcast, the Best Real Estate Investing Advice Ever podcast, FlippingJunkie, and many others. He’s currently a featured blogger for BiggerPockets, the largest community of real estate investors in the world.

Along with completing transactions and working to build his portfolio, he provides mentorship to aspiring investors. This is done through one-on-one interactions and through his successful YouTube channel and blog.

Marcus does utilize his M.B.A. for more than real estate. As a consultant for a successful non-profit institution south of Chicago, he uses his expertise in the development of human capital. His philanthropic efforts help existing stakeholders develop in their capacity to serve those in need of assistance.

Marcus completed his M.B.A. in 2011 from Olivet Nazarene University.


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This blog post has one intended purpose—to help you clearly understand what it takes to be a successful wholesaler. First, we’ll take a minute to review the basic concepts and premise of wholesaling.

There is a ton of information circulating the web via videos, blogs, workshops, and seminars. The majority of this information overlooks the basics. Therefore, this blog post is for those who have not done a deal and are trying to wrap their heads around the process.

Real Estate Wholesaling, Defined

So, what is wholesaling? Wholesaling is when you find a property with signs of distress and agree to purchase the property significantly below market value. Then, you resell the property to an investor for below market value, and you keep the difference between the contract price with the seller and your contract price with the buyer (investor).

Here’s a that process simplified:

Find a Distressed House –> Deal With Seller –> Find Investor –> Deal With Investor = $$$

Is this possible? Yes.

Is it easy? It could be, but there are steps.


Related: 3 Steps to Close Your First Wholesaling Deal (& Find a Mentor in the Process)

Steps to Facilitate a Wholesale Deal

There are some vital steps that must be followed in order to facilitate a transaction. It takes persistence and tenacity, but yes, it is possible.

Step 1: Find a deal.

You have to be able to find a deal. Without going into detail (it’s beyond the scope of this post), you can do this numerous ways: online marketing, direct mail, driving for dollars, relationships etc. Regardless, marketing is the key.

So let’s say you find a distressed property. Now what?

Step 2: Decide with the property is worth.

This is done by finding comparable sales. What have similar properties in the area sold for? These properties will be properties that have been rehabbed.

Step 3: Make an offer.

Once you’ve done comparable sales and you know the after repair value (ARV), you are ready to make an offer to the seller. This offer will need to be considerably below value, normally close to 50% below value (including repair cost).

Step 4: Submit the contract.

Let’s say your seller accepts your offer of $50k, and the house is worth $100k. Now you will contact your closing agent (attorney or title company) and submit the contract to them.

Step 5: Find a buyer.

You will have a good deal, so a buyer should not be hard to find. You can post the property on Craigslist, or you can call other wholesalers and joint venture, where you bring the house to the deal and a partner brings the buyer.

Now let’s say you’ve found a buyer willing to pay $60K for your deal.

wholesale buyers list

Step 6: Create an agreement.

Now you’ll create an agreement between you and the buyer for $60k. This can be done either by assignment agreement or double closing. You are basically selling your contract to the buyer for $10k. Click here for an article that discusses the assignment agreement.

Step 7: Coordinate the closing process.

This is the most exciting step, but can be the most frustrating as well. Here is where you have to coordinate everything. You have to make sure the closing agent communicates the closing schedule with the seller, that your buyer has submitted earnest money and has the closing schedule, and that the closing agent gets all the needed paperwork out. You have to coordinate the transaction to the end. If you are successful at this, then you will receive a $10k check at closing. This is the difference between the $50k deal you made with the seller and the $60k deal you made with the buyer.

Related: Thinking of Becoming a Real Estate Agent Because Wholesaling is Too Hard? Read THIS First.

Wrap Up

As a wholesaler, you have to be able to find remarkable deals by smart marketing. You also have to be able to understand what a good deal is and how to find your numbers via comparable sales. Next, you’ll need to find your buyer, which takes marketing efforts as well, but if you truly have a deal, this is not difficult. Lastly, you have to coordinate the transaction to make sure everyone is on the same page.

Everyone likes to start with wholesaling as an entry into the real estate industry. It can be challenging at times, but at the closing table, it’s all worth it.

What areas of the wholesaling process are you having issues with?

Let me know and I’ll try to help!