Real Estate Wholesaling

Top 3 Newbie Wholesaling FAQs—Answered!

Expertise: Personal Development, Real Estate Wholesaling, Real Estate Investing Basics
87 Articles Written
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Does wholesaling make you feel stupid at times? If you answered yes to this question, you’re not alone. I respond to a lot of comments on my YouTube channel about wholesaling. Many people are confused and feel lost when it comes to starting. The purpose of this writing is not to delve into the intricacies of wholesaling—because I and many others have done this already. I will answer the five questions I’m often asked.

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The Top 3 Newbie Wholesaling FAQs—Answered!

1. What is the best way to get started?

FYI: You’ve started already, but most people stop without taking consistent action. Yes, by reading this article, you’ve shown interest in wholesaling, and that is the first step. Stop believing this will happen overnight. You have to start with education.

Education is essential to becoming a successful wholesaler.

I am not talking about the quick crash course to $5,000 in 30 days. I’m referring to the education you need about your specific market, trends, and marketing. There are many times I see people buy a course or read a book and try to get started, but they know nothing about their market. These courses try to incorporate a one-size-fits-all approach, but every market is different.

2. What should I get educated on first?

Your Market

What areas are in high demand? Do you know the average days on market? What is the estimated rehab cost per square foot? What are the buying criteria for a certain area? What are investors in the area looking for—to buy fix and flips, rentals, single family units, or multifamily units?

Educating yourself and being able to answer these questions is step one in truly being able to get started. So, if you’re trying to find deals and you cannot answer these questions, you’re going to have a problem.

It’s OK to be a newbie, but it’s not OK to not have done your homework.

Motivated Sellers

First, do you know what a motivated seller is? Honestly, this sounds like a very stupid question, but I have to inform newbies repeatedly that all sellers who respond to a marketing piece are not motivated. For example, if the seller is fixing the property up and they say they will be ready to sell when they are done, this is not a motivated seller.

Related: A 60-Day Action Guide to Wholesaling Your First Property

Please, I’m writing this so you won’t look stupid. A seller looking to sell $5,000 below market is not motivated.

Identifying motivation is an art; it’s like digging for gold. Not every stone you see will be a gem, but by continuing to dig, you will encounter that rare find.

So what if you feel uncomfortable asking the seller how much they owe on their mortgage? The art is asking open-ended questions without being intrusive. Learning this technique is only done by building repetition. So if you need to make mock calls with a friend, partner, or spouse, please do so.

The key for finding motivated sellers is for you to identify the problem and have them acknowledge it. Some sellers will clearly have a problem but are not willing to admit it. These people may need some coercing before they are ready to be forthcoming.

Marketing

There are many forms of marketing. You will need to be specific on who you will target and how you will target them. I will not go into depth here because marketing is a blog post in itself. However, I will inform you that whichever form you use, consistency is the key. The number of times you reach out to a seller must be a minimum of six touches. Others may suggest more, but six should be the minimum.

Here are some marketing tools:

  • Online: YouTube Videos, Targeted Social Media Ads, Web Page, Blogs
  • Offline: Direct Mail, TV Ads, Radio Ads, Newspaper Ads, Door Knocking, Cold Calling, Bandit Signs

Once you’ve identified your marketing strategy, you will need to identify your target population. This will be incorporated with knowing your market like I spoke about above.

You will look like a complete idiot and waste money if you do not identify these metrics before starting. Marketing will be expensive, and I’m sure in the beginning most newbies don’t have money to waste by doing something incorrectly.

home appraisal

3. What resources do I need?

This is a very valid question. Besides money, the most important resource will be cooperative relationships that help you progress. You will look completely incompetent if you’re trying to do a deal and you don’t have these resources and relations at least initiated.

Here are just a few: real estate agent, buyers, title agent, attorney, wholesalers, contract, assignment agreement, conversational skills, positive personality.

Related: 5 Ways to Lose Your Wholesale Deal (After Signing the Contract)

You will not know everything, and each deal can present different challenges. Having solid resources and relationships will help you a lot. I’ve needed attorneys on some deals, and I’ve needed title agents on all deals. Real estate agents are very useful, as well as other wholesalers to bounce questions off of. I am very appreciative of my resources and relationships and work very hard not to damage or neglect them.

I want you to be brutally honest with yourself: Does wholesaling make you feel stupid at times? I can truly say yes. Even though I’ve been doing this for numerous years, I still find myself dumbfounded by some of the deals I’m working on.

If you’re a seasoned investor or a newbie and wholesaling, have you felt stupid at one point?

Please share.

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. 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. He has also converted some of his deals into cash-flowing rentals. Marcus holds seven rentals, two of which are commercial units. He’s even purchased a school, which was converted into a daycare center. His overall goal is to turn 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 in numerous podcast such as the Louisville Gal Podcast, The Best Deal Ever Podcast, The Flipping Junkie, and many others. He contributes content regularly to his YouTube channel and blog.

    Ali Hashemi Investor from Southern Indiana, IN
    Replied over 1 year ago
    I’m a newbie and my question is “what is it” and I don’t think that was answered.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 1 year ago
    In order to get started, you need to know: 1) Market (education) 2) Resources Needed 3) Network
    Ali Hashemi Investor from Southern Indiana, IN
    Replied over 1 year ago
    Awesome, great layman’s explanation thank you!
    Karen Rittenhouse Flipper/Rehabber from Greensboro, NC
    Replied over 1 year ago
    Hi Marcus: As a full-time wholesaler, here are the 3 things I believe a wholesaler needs: 1. tons of marketing – to get sellers to call you before anyone else knows about the property. You can’t purchase low enough to wholesale a property if you have competition for the purchase. 2. skills. Purchasing a property at deep discount takes knowing the things you listed – your area and values – plus negotiating skills. This comes with experience. 3. buyers. You must be constantly networking to have rehabbers waiting for your deals. The idea with wholesaling is that its quick and its cash. It’s not quick if you don’t have waiting buyers. Thanks for your post.
    Devin Alphin from Lawrenceville, Georgia
    Replied over 1 year ago
    Hey Marcus, great post I’ve been following your videos on YouTube the past few days and just found you on BP. One question I’m trying to wrap my head around is HOW to go about studying a market. But also WHAT market? I live in Lawrenceville, Ga which is 45 northeast of Atlanta, more of a suburb etc. Can I start here or should I be in the city? I’m concerned that it’s not a “Hot” area but with limited time and gas it’s much easier to access my area than Atl. Thanks for great content!
    Shawn Gibson from Atlanta, Georgia
    Replied over 1 year ago
    Marcus, great post… watched a few of your YouTube videos (thanks to Devin). Thanks for the honesty and “tough” truths. I’m in the Atlanta market and I’m working to gain the “market education” that you talk about. I’ve narrowed in on two neighborhoods that where flippers seem busy buying. Currently in the process of trying to reverse engineer a buyer’s list. Thanks to this post, I have some great new question for my agent contacts. Thanks again!
    Eliseo Magallon from Lawrenceville, Georgia
    Replied over 1 year ago
    THanks for the article man! I didn’t even know I needed those people haha. oops
    Shereeka Hardaway
    Replied over 1 year ago
    Hey Marcus! Thanks for this and many other informational posts. I’m a truly a newbie and I am trying to take the very first step which is educating myself. I have read many of your posts already with my handy pen and notebook ready. I’m learning so much and feel that I will be ready soon to start putting into action all of the things that I have learned.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 1 year ago
    Shereeka, glad I can be a resource for you I have other articles and videos as well. PM no sell just great content
    Ephrem Bekere from Lancaster, Pennsylvania
    Replied 5 months ago
    Just read it. Thank you for the article, very helpful!
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied 4 months ago
    Ephrem, thanks for reading let me know if you need anything
    Ephrem Bekere from Lancaster, Pennsylvania
    Replied 5 months ago
    Just read it. Thank you for the article, very helpful!
    Misty Cherry from Rock Island, IL
    Replied 5 months ago
    Thank you for this information. This is great!
    Ashley Cornelison from Lakewood, CO
    Replied 4 months ago
    Thanks for this! I feel like I have been wasting my time/life up until recently. I did not even know wholesaling was a thing. NO LONGER!
    Elizabeth W Radigan
    Replied 3 months ago
    Great article! Looking forward to watching some of your videos! You definitely need to know your market/area! I am just getting started so any and all information is greatly appreciated! Thanks for sharing your time and knowledge!