How to Wholesale Real Estate with $0

Uncategorized Jul 03, 2023

With a quick internet search, you can find a dozen different get rich quick schemes and business ventures that claim you need no money to get started.

One of the strategies you might have come across is called wholesaling real estate and I want to break it down and determine whether the claims of this being a no money needed strategy are really true.

A common question that I get and that I want to answer today is “How much money does it take to get started?”

I could make this super short and say that technically you can get started with zero dollars but that's a big technicality.

Instead, I want to dive into what do people actually mean when they say you can wholesale with no money?

How much money have I spent?

And then what recommendations do I have for you if you have a hundred dollars to spend, five hundred dollars, or a thousand dollars or more to go towards your wholesaling budget?

Wholesaling real estate is the idea of getting a property under contract, and instead of purchasing that property you actually sell your contract to a cash buyer real estate investor and make the difference. 

This entire process would start with you finding a motivated seller.

Let's just imagine that this person owns a house that is in need of a lot of repairs and they don't want to make their repairs themselves, so they agree to sell you the property for $100,000. 

Now maybe you don't have a hundred grand, but that's okay.

When you're wholesaling real estate, you're gonna go under contract to buy that property.

And between that day and the closing day when it's actually time to show up with the cash, you're going to sell your contract to a cash buyer.

So let's say you have a contract for $100,000. You would find a cash buyer and sell them your contract for $110,000.

On closing day, the seller gets their $100,000, you get $00,000, and your cash buyer gets the property to flip it, renovate it, or whatever they're going to do to make their profit. 

So ideally, everyone can leave happy and you put zero dollars into the deal.

In its simplest sense you can wholesale with no money, but what can be misleading is that in order to consistently do deals it's going to be very tough to put no money into your business. 

So you might get your first deal or maybe even two through just pure hustle, but I recommend that once you get your first assignment check you reinvest some of that into your business to make it easier and quicker for you to get your next deal.

But if you're just getting started and you truly want to spend zero dollars, here's how that might play out.


Step 1: Find a motivated seller 

You'll first need to find a motivated seller that is off-market. This means that they're not trying to sell their house on a site like Redfin or Zillow.

That would be on-market, and there are some difficulties that come into play with that which we'll talk about a little later in this video. 

One of the best ways to find motivated sellers off-market is to drive for dollars, and this is where you literally hop in your car and you drive around.

You're looking for properties that are distressed, or abandoned, or have some indication that the owner might be willing to sell it. 

There are apps like PropStream and DealMachine that let you log all of the properties that you want to keep track of. 

Both of those apps have free trials that I've linked for you above, so use the free trial.

Or, if you're just going to take the “no money involved” approach, take a notebook with you to keep track of the addresses or write them down in your phone. 

Once you've got a list of properties, this is when it's time to contact the homeowners and see if they're interested in selling.

Typically you would do something called skip tracing, where you would use a site like PropStream to pay for the contact information of those homeowners so that you can reach out to them and see if they want to sell.

And while skip tracing is not expensive at all, it does cost something.

So if you really want to keep this to zero dollars, you basically have to door knock, which means you found a property that you think the homeowner might be willing to sell, walk up to the door, knock on it, and ask them.

Now in the age of the illness that has dominated our lives for the past few years, this may not be the best idea. 

And you also have to consider the fact that many people don't open their door for strangers.

So do this at your own risk. 

If you don't like the driving for dollars strategy,, then something else that you might want to try to get a literal zero dollar down deal is to find motivated sellers on a site like Craigslist, Facebook Marketplace, or Zillow for sale by owner leads. 

These are free sites where you can reach out to people who have their house listed for sale and you can have a conversation with them. 

You can also try reaching out to people who have their house listed for rent and see if they'd be willing to sell it instead. 

And typically if you're looking at a rental unit that looks freshly remodeled or really nice, you're probably not going to have much luck.

But if it's a little bit outdated or not very well taken care of, then the person might be a tired landlord and willing to get it off of their hands.


Step 2: Going under contract

Once you find someone who's willing to sell, that's when you move on to step two of the wholesaling process and that's going under contract to buy the property for your agreed-upon price. 

At this point, some people choose to disclose to the homeowner that they're a wholesaler and that they don't have the money to buy the property, but that they'll be partnering with the person who does.

Some people choose not to disclose and feel like as long as they abide by what's going on in the contract and they keep everything legal, they don't have to tell the seller every single detail.

What I say is this: I choose to disclose to the homeowner that I'm not the only investor involved and that I'm working with a team that is going to abide by the contract and get them the money that we agreed upon. 

When you're making your own decision, you should also consider what your local laws are and whether or not you're a real estate agent because there are some different requirements there.

Now once you and the seller agree on a price and go under contract, remember that you don't have to go to the bank on that day and buy the property, but you may need something called earnest money.

Basically this is you putting your money where your mouth is and saying, “I will abide by the terms that we agreed upon in this contract.”

Earnest money can be anywhere from one dollar to one percent of the purchase price.

And while I recommend that you put down at least something to help make your contract official with an off-market deal where it's just you and the homeowner, the amount of earnest money is completely negotiable.

So if both of you agree to zero dollars of earnest money, then you've got a zero dollar deal. 

This won't be possible with those on-market deals that we talked about earlier because there are real estate agents involved, but we'll get into that a little bit later in this video.


Step 3: Find a cash buyer

Once you've got the signed contract with the seller, step three and four are actually a lot simpler and move a lot quicker.

Step three is to find a cash buyer.

There are a few different ways that you can find cash buyers, but the best free way is to go into your local Facebook investing groups. 

Or you could also go on Craigslist post some details about your deal and start having conversations with cash buyers who might be interested. 

Once you've got a buyer who wants the deal, you'll go under contract with them and use something called an assignment contract.

This assignment contract lets them buy your original contract from you.

So if your original contract between you and the homeowner is for $100,000 and your assignment contract says $110,000, you'd make a $10,000 assignment fee.


Step 4: Get your assignment check from the title company

Step four happens on the day of closing.

When your cash buyer actually shows up to the title company with $110,000 of cash, the title company will take care of all of the legal paperwork and you'll get your $10,000 assignment check.

Also, a recommendation I have for you is that when you go under contracts with your cash buyer, make sure that they put down earnest money as well to cover your earnest money deposit.

That way you'll get your $10,000 assignment check back and the earnest money that you put down in the beginning of the deal. 

So it is technically possible to do a wholesale deal with zero dollars down, but it's really hard to find motivated sellers by just scrolling through Facebook Marketplace or Craigslist.

So while you might get lucky for one or two deals, I wouldn't recommend you trying to consistently do deals every single month in this way.

Instead, let's break down what you should do if you have $100 to spend, $500, or $1,000 or more.

And I'll also share with you guys what I spent to get started.


How to wholesale with a $100 budget

If your budget is $100 to get your first wholesale deal, I recommend you start driving for dollars with an app like PropStream or DealMachine.

Take advantage of the free trials linked above, drive for dollars as much as you can, and build up a list of all the distressed or abandoned properties in your area.

Once you have your list of properties, you're going to need to skip trace it.

Skip tracing is when you pay a small amount of money to get the contact information of all of the homeowners on that list.

With PropStream, you can skip trace for 12 cents each, and that's all you'll pay during your free trial. 

But once your trial ends, PropStream does have a monthly subscription which is $97 a month.

And while I truly do think this subscription is worth it, it might not be the best bet if you only have $100 to spend.

So I would do my driving for dollars and my skip tracing within my free trial period if I was going to go that route.

If you did that and you wanted to spend your entire hundred dollars, you could get 833 properties for about $99. 

If you don't want to use PropStream or you've already used your free trial, you could use a service like Batch Skip Tracing.

Although they don't have a monthly membership, their skip tracing costs 20 cents each. So that would get you about 500 properties with your $100.

Once you've spent your $100, it's time to start cold calling.

Yes, you will get cussed out.

Yes you will get hung up on.

But hopefully, there is a motivated seller within your list who is willing to accept your cash offer and won't ask you to put down earnest money.

Then you've got to get out there and hustle to find a cash buyer and a title company to handle your deal.


How to wholesale with a $500 budget

Now if you've got a budget of about $500, you've got a little bit more wiggle room.

You could skip trace and cold call more properties, so that gives you a better chance of finding a motivated seller because you've got a bigger list.

Instead of driving for dollars, you could decide to just go ahead and buy a list from a service like PropStream and then cold call it.

The reason I didn't suggest buying a list if you have just a hundred dollars is because the same way you can buy a list, so can every other wholesaler in your market.

This means those people are going to have been cold called and received other forms of marketing probably from everyone else in your market, so there's more competition.

You'd need to buy a bigger list to account for that and try to find someone who's actually willing to sell.

At least your driving for dollars list is unique to the properties that you yourself identified, and so theoretically there should be less competition.

But if you don't have a car or you don't want to drive for dollars, you can identify which list you should pull like the tired landlord list and the expired listings list.

You could also get in contact with homeowners in other ways, like sending them a postcard, a text message blast, or a ringless voicemail.

All of these methods have different regulations and rules that you have to observe, as well as different prices. But they're all more expensive than just skip tracing and cold calling, so it depends on your budget.

Either way, a $500 budget can help you contact more homeowners, or you can contact the same amount of homeowners and leave some of that money aside to use for earnest money when you get an offer accepted.

The amount of earnest money is negotiable, but it can be a red flag to a seller if you offer nothing.

So even just setting aside $100, $200, or $300 out of your budget may help you get more offers accepted.

Another strategy you could use with a $500 budget is to target on-market properties.

This is the strategy I've used and that I've made over $30,000 dollars with in just a couple of months. 

The biggest hurdle with wholesaling on-market properties, AKA the ones listed on Redfin or Zillow, is that there's a real estate agent involved and this usually means two things: a proof of funds letter and earnest money deposit.

Believe me when I say: the proof of funds is not your biggest obstacle, the bigger barrier is usually earnest money.

When you're offering to buy a property that's on-market, the real estate agent is usually going to expect about 1% of the purchase price.

So if the property is $50,000, they will want $500.

if it's $100,000, they would want somewhere around $1,000, but this is negotiable.

So instead of paying for skip tracing and to market to off-market properties, you could take your $500 and split that between $100 or $200 for a proof of funds letter.  

Then, set aside $300 or $400 dollars for your earnest money deposit.

Depending on what market you're investing in, this might not meet the 1% rule but at least it's something.

And you don't need to pay it until you actually get an offer accepted. 

So you could be saving up in the background while you're getting better at everything.

I actually did a deal in just 24 hours and had my cash buyer put down earnest money for me.

Another thing to keep in mind with on-market wholesaling is that real estate agents are real estate professionals.

That means it's a chance to practice your phone confidence using the correct real estate terminology and sound like you know what you're talking about.

In my opinion this is all about practice, and building up these phone skills will help you in the future whether you decide to target on-market or off-market properties.

At least making these calls to real estate agents and practicing is free.

So with $500 it's really a toss-up between whether you want to target off-market properties and pay for contact information, or if you want to target on-market properties and pay for something like proof of funds and earnest money.


How to wholesale with a $1,000 budget 

if you've got a thousand dollars or more, my recommendation is that you go for those on-market properties.

Everyone is different and every market is different, but in my experience and in the experience of people that I've helped get their first wholesale deal, on-market is quicker and easier in a lot of ways.

When you target off-market properties, you spend money first then have the conversation with them and see if they're interested in selling.

Sure it might be only 12 or 20 cents per person, but when you're targeting off-market properties it takes a lot of phone calls and a lot of conversations to find a deal. Over a hundred or a thousand people, that can add up.

Whereas with on-market, you already know that the homeowner wants to sell the house and it's free to call up the real estate agent.

And once you get your proof of funds letter, it's free to make as many offers as you want.

Putting down earnest money only comes into the picture once you get an offer accepted and even then it's refunded to you once you get your assignment check.

For myself, I initially spent about $200 to get my proof of funds letter, and put down $500 on earnest money once I got an offer accepted.

A few weeks after that, I made $6,000 as an assignment fee on that deal and got back my $500 earnest money.

Since then, I actually figured out how to get free proof of funds letters directly from my cash buyer and it's a technique that I teach during my bootcamp.

This is a 2-week long opportunity for you to walk through the entire on-market wholesaling process, from choosing a market and finding deals, to analyzing properties by finding the ARV and estimating the rehab, all the way through to getting proof of funds letters, finding cash buyers, and everything that you'll need to start consistently doing deals every month.

This moves me into my next point, which is that if you have $1,000 or more you may want to invest in some mentorship.

This is something that I did, and there are plenty of people out there with the knowledge and experience that can help you get more deals quicker and without making the mistakes that you might if you didn't have their guidance.

But remember, there's always a trade-off.

You've got to give value to get value, so if you're looking for a mentor just remember that.

And if that's something you're not interested in, Google is your best friend.

There is so much information out there. You just have to take the initiative and go find it and piece it together.

And if you want it to be already pieced together in a nice package and get all of your individual questions answered, then maybe mentorship is something that you want to look for.

At the end of the day, while it is possible to do a deal with just zero dollars down, it's really hard and it's not the best way to scale your business and start consistently doing deals every month.

If you want to do that, invest in yourself. And if you know that you have the work ethic and you're going to work to gain the knowledge you need, don't be afraid to invest in yourself.

Until next time, thanks for reading.



So, now that you've gotten an intro to wholesaling, are you ready to start?

If so, you can use my Free Resource Pack to help get your real estate investing journey off the ground. It includes:

  1. My Offer Sheet Template
  2. My Phone Scripts for Calling Real Estate Agents
  3. The Wholesaling Deal Tracker

So what are you waiting for?

Start your real estate investing journey towards financial freedom today!


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