Is wholesaling a good starting point?

6 Replies

Hello BiggerPockets members! Im gabe. Im 18 and i was wondering if wholesaling is a good place to get into real estate investing as i have no money. I have seen a lot of “gurus” say it’s great, but I’m not too sure about it. Thanks.

It can be a great way! I started as a realtor myself and would do it the same way if I could go back. By helping others buy and sell you get plugged in, learn the business, and most importantly you learn the market.

if you have no money how can you sign contracts promising to purchase a property?

@Gabe Rouse Are these the same gurus that are going to sell you a $30K platinum coaching course? Maybe teach you how to open up new credit cards to pay for it?

Taking the legalities and ethics out of it (just for a minute) and read posts of those people that are frustrated with wholesaling and some that purport success. The “frustrated” send out 100 mailers a month, have no traction after 3 months and get frustrated. The “successful” send out 1,000 per week and talk about some deals (outliers) coming after 3 years.

Odds are with “no money” you’ll end up in the group of wholesalers that are frustrated. And if you do get one deal you’ll then (likely) end up being in the group of wholesalers that send deals to experienced investors that are sooooooo off in ARV, rehab costs, projected rent, etc. that they lose all credibility.

I know this all sounds so negative, but...seriously...it’s not free, it’s not instant, it’s labor intensive, and could put you on serious debt.

And, again, this is taking the legality and ethics out of it.

How will you know the ARV, rehab costs, holding costs, etc. to be able to determine what the end buyer/flipper will want to get the house for? I have seen a lot of new wholesalers and you can tell those that have little to no experience. In my mind wholesaling should be done by those with a lot of experience, who have done a lot of deals and know the business. They also should be honest with their intentions and doing it legally... so the answer is, on paper, yes wholesaling is where those with no money start. In reality, wholesaling should be done by experienced investors... just my .02.

@Gabe Rouse

Absolutely not.  

As a frequent buyer of wholesale properties, I can say with confidence, you will not have the knowledge to provide viable solutions for your sellers and quality investments for your buyers.  Not to mention the thousands of $ required to launch a successful marketing campaign. 

Use that time to intern with an established investment company in your area and learn the ropes.  

Get a job with a contractor and start a course to get a real estate license. If your still in high school signup to get a journeyman license in electric, plumbing, or HVAC.

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