Starting out wholesaling with little cash

Starting out wholesaling with little cash

New to Real Estate · Houston, TX · Member since 2024 · 2 posts · 1 vote

Hello all! I’m a super eager wannabe real estate investor, my largest barrier is my lack of start up funding.
Lately I’ve been considering wholesaling as I’ve heard it’s sort of an easy, low-cost avenue for beginners. 

My question is: when wholesaling, after finding a great deal, do you need real proof of funds to the get the property under contact or is there a way to get it under contract, find a buyer and complete a double closing/assign the right to sell without actually having the cash for the property? 

Thanks!

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  • Chandler, AZ · Member since 2020 · 295 posts · 272 votes
    1y

    Lack of startup funding is common.  We had to save up the 5% to get our first place with an 80/15 first and second mortgage.  I don't have your answer, but I do want to let you know my concern.  I don't think wholesaling is easy at all.  Its hard to find deals unless you are connected, advertise a lot, cold call a lot, knock a lot, and/or work very hard at it.  Low cost, possibly yes, but also possibly very time consuming and that has a cost.  Second, its complicated and you should get a mentor to make sure you don't accidentally screw it up and possibly get sued.  Without solid knowledge on this subject, you can easily end up in hot water.  I do like your eagerness though so best wishes.

  • New to Real Estate · Houston, TX · Member since 2024 · 2 posts · 1 vote
    1y

    You sound like my husband! Haha but this makes complete sense. I figure nothing in life is that easy. With it being that risky, the least I could do is have some money saved up.
    So, wait a little bit I shall. 
    Thanks for your input!

  • Stephen MoralesBusiness Member
    Jacksonville, FL · Member since 2025 · 402 posts · 205 votes
    1y

    Hi @Nneds Ubani,

    Glad to see you super eager and stoked to get into REI!

    To answer your question: Sometimes you may need proof of funds. I would say we get asked for POF about 25% of the time on our deals. It's normally when a REALTOR is involved or a seasoned investor owns the property we are looking to wholesale.

    The best way to do this is to find and partner with someone who does transactional funding to do your double closes. They normally will collect their fee from you at closing. 

    These lenders can also provide you with a POF letter to help you with getting the property under contract. Both PMLs and HMLs that are more than happy to provide these letters for their borrowers.

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