6 Principles of the Wholesale Real Estate Industry


Wholesale real estate is perhaps one of the fastest-growing branches of the real estate industry in recent years, with more and more aspiring real estate investors looking to join. According to the National Association of Realtors, there are 1.35 million licensed realtors operating in the U.S. alone, though it’s unsure how many are wholesalers. Wholesale real estate is one of the best ways to break into the world of real estate investing, especially for those looking to build and grow their portfolio. However, there’s a fine line between success and failure.

As with any industry, some successful individuals boast principles that are ensured to help you navigate that thin line and find success. Wholesale real estate is no different. Below, we share a few wholesale real estate principles to help you down the path to success.


Leave Your Emotions at the Door

Our first entry is an essential principle of wholesale real estate. It’s critical for real estate agents to understand that not every interaction you have with a lead is going to go well, and not every wholesale real estate deal is going to close without a hitch (spoiler alert: some deals don’t close at all!). A lot of pride goes into selling a property, from finding buyers for the property, lining up contractors to evaluate the After Repaired Value (ARV) of the property, buying titles, and advertising your properties.

We understand, there’s a great sense of accomplishment when you close a deal. Unfortunately, your leads don’t always care as much about the effort you put in or the fact that you need a close. The best way to find success is not to take the sea of “no’s” and failed deals personally, as it can negatively affect your reputation and relationships. Do your best to remember that every no brings you closer to that coveted yes.


Always Have A Real Estate Lawyer Nearby

Wholesale real estate can be profitable, but it can also come with some legal pitfalls. Another principle of wholesale real estate is to ensure that you always have a real estate lawyer nearby. The most significant benefit to having on is that they can weigh whether or not a property is worth the effort or sinking the money into.

They can also help you avoid liability by adding escape clauses to your real estate purchase contract so that in the event your buyer falls through, your chances of walking away without liability increase. And let’s not forget that each city and state have its own rules and regulations for selling real estate in their market. A real estate lawyer can assist with helping you learn the ins and outs of how to do business in your area.

It will also benefit you to network and foster relationships with real estate lawyers and others like divorce attorneys, insurance agents, and personal bankers. They are the ones closest to the properties and their sellers. This means sometimes you may know about a distressed property before anyone else.


Learn as Much About the Market You’re Selling in as Possible

It’s well understood that it’s never good to go in unprepared. A fundamental principle of wholesale real estate is to arm yourself with as much knowledge as you can about the industry as well as the market you serve. There’s a lot to know, but it’s vital to your success. Start by learning about the area. What are the demographics and circumstances of the buyers in the area? Then, we recommend choosing your “farm,” meaning the area you’re going to find your wholesale properties and your niche, which are the type of sellers you target.

It’s also wise to learn who the motivated sellers are in your market and why they tend to sell. You also need to be familiar with all the laws and regulations for your city and state. Next, start building relationships with contractors and other investors in your area. Develop a buyer’s list and add them to your email list. They may be the ones you work with and who purchase the distressed properties you find!


Have a Sales Channel Before Buying a Property

Question: Would you buy a house before you’ve picked out a plot? Of course, that answer is no. So, why would you do it to your customer? Another principle of wholesale real estate is to have a sales channel lined up before buying a property. It’s great that you’ve found a seller willing to wholesale you a property at a below-market level price, but the bigger question is, who are you selling the property to?

To reduce the risk of upsetting your seller or potentially burning your bridges for the chance of future opportunities, we highly recommend having a buyers’ list. This is a list of local realtors, contractors, house flippers who you know are actively looking for properties. If you don’t yet have enough contacts to build a buyers’ list, then make sure you have a couple of resources who can help point you in the right direction.


Be Transparent

The quickest way to build trust with a lead is to be transparent with them about your role in the wholesale real estate process. In fact, we consider it a principle of wholesale real estate. In the real estate industry, many scammers and con artists are looking to take advantage of unsuspecting sellers, so making yourself available to answer any questions, concerns, or any other aspects of the vetting process is a must if you want to earn your lead’s trust.

The best way to achieve this is to be as transparent as possible. If your goal is to serve them throughout the deal, then state that upfront. Let them know all of the ways you will make sure their experience is a positive one. If you’ve created a strategy and a timeline for the process, share the details with them. Doing this not only signals to your seller that you’re serious about working with them and that they can trust you, but they’re also likely to tell others about your customer service and attention to detail.


Have a Team You Can Trust

Behind every successful real estate agent is an equally impressive team. That’s not to say that you can’t be successful flying solo, but having a team can give you a leg up over the competition. Your team should have a loan officer, tax advisor, lawyer, contractor — whole calvary. We list it as a wholesale real estate principle because it’s an important lesson in relinquishing control. As agents, we tend to want to do everything ourselves, but when you have a team you can trust, your process can move a lot smoother and bring you more qualified leads.

And if you don’t have a team but need a consultant or cold calling services, Call Motivated Sellers is happy to be your team. Our team of cold calling experts can vet your qualified leads to help you find out who’s ready to buy or sell their property. For cold calling or to learn about our other services, don’t hesitate to contact us!


Have an Exit Strategy

If you’re a newcomer to the real estate industry, you may be wondering what an exit strategy is. Simply put, it’s a plan detailing when the agent will remove themselves from the investing deal or what the agent will do with the property at the end of the agreement. Having an exit strategy can also help you avoid risks. It allows you to evaluate a property’s risks before you purchase it and map out the unforeseen costs you may encounter. It also allows you to make quick cash if you’re in need.

For wholesale real estate agents, the best exit strategy might be a standard close, where the agent finds the perfect property, places it under a contract and then sells it to a buyer for a small profit. Another option is a double close, where you, the agent, purchase the property title and assume the costs of repairs and renovations, after which another party buys the property for a higher amount.



Call Motivated Sellers: Guiding Your Wholesale Real Estate Career

Wholesale real estate is a profitable business opportunity for real estate agents looking to build their portfolio and further their career in the real estate industry. One part of that process that gives many agents trouble is leads. Countless hours are spent vetting qualified leads when there doesn’t have to be. Our team at Call Motivated Sellers is more than honored to do the cold calling and vetting for you, resulting in quality ready-to-buy leads.

If you’re interested in working with us or learning more about our services, contact our team today!