How to Get into Wholesale Real Estate in Dallas, TX

Are you interested in tossing your hat in the ring of real estate investing? There are plenty of opportunities available for you in the real estate industry, one of them being a wholesale real estate investor.

We will look at what wholesaling real estate is and offer a guide on how to wholesale real estate step by step. After we go over the details, we’ll tell you about an amazing opportunity for real estate investors interested in sharpening their investment strategies.

What Is Wholesale Real Estate?

Before we tell you how to get into wholesaling property, you first need to know what wholesaling is.

Wholesaling real estate is a strategy that involves investors finding discounted real estate properties, getting them under contract, then selling them to a potential buyer for a profit. Essentially, it’s finding good investment properties and presenting them to an end investor.

The investment strategy has become quite popular today because it is one of the quickest methods real estate business investors have of turning a profit. Some can even complete wholesale deals in a few hours. On top of that, the approach enables you to stay clear of any money risk.

But just like everything else in real estate investing, the key behind success and failure is knowing about buying properties and everything it entails.

Wholesaling Real Estate in Texas Is Wholesaling Legal in Dallas, TX?

Yes, wholesaling real estate is legal in Dallas, TX. The essential thing to keep in mind when it comes to wholesaling is that you can get into a lot of legal trouble if you do not follow Texas laws and regulations of home buying and investment properties.

The state’s real estate transactions are governed by the laws established by the Texas Real Estate Commission. The commission, in turn, shares its resources and staff with the Texas Appraiser Licensing and Certification Board.

Together they provide education, licensing, and complaint investigation services. They also regulate and enforce the state’s laws on the real estate business industry.

What Types of Properties Can You Wholesale in Texas?

Remember, there is a difference between a wholesaler and a real estate brokerage. A wholesaler aims to identify a property and match it to a cash buyer by facilitating a short-term sale or assigning a contract that places the property in possession of the final owner.

You can get into a lot of trouble if you market the property instead of the rights to assign a contract for that property.

There are several methods real estate wholesalers can use to structure deals while staying within the state’s legal framework. Some of the common ones include:

The double close Assigning a contract Buy and sell

How to Get into Wholesale Real Estate

If you are itching to start completing wholesale real estate deals, you will be happy to know that it is not complicated. You don’t even need to have a real estate license. You simply need to be the transaction’s principal buyer.

However, we would advise getting a real estate license because it can be significantly beneficial for you, opening up multiple networking opportunities down the road. We are getting ahead of ourselves a little bit, though.

Here are the steps to take when looking to get into wholesale real estate.

1. Research the Local Market

The more prepared you are, the easier it will be. Start by familiarizing yourself with the wholesaling process before researching your local real estate investing market.

Get a clear picture of the home prices, locations of different neighborhoods, and the type of investment properties available.

This information will go a long way in building foundations for your wholesaling deals.

2. Create a Buyer’s List

A wholesaler’s main purpose is to be the middleman between buyers and the person selling the investment property. It’s always a good idea to know where to find buyers before securing a property under contract. Creating a buyers list will help you know where to take the deals you find.

There are several ways you can build a buyers list. Some of them include:

  • Social media
  • Email marketing
  • Networking
  • Attending real estate events
3. Secure a Suitable Financing Source

After creating your buyer’s list, the next step is to secure financing from a source that works best for you. Without capital, you will not be able to purchase the contract of a great investment property.

At the start, it is often best to align your services with a hard money seller. Doing so allows you to secure financing smoothly and quickly when you get your first wholesale deal.

4. Search for Potential Wholesale Properties

There are several strategies you can use to find wholesale properties. Most wholesalers start by searching for distressed properties in their market area.

Why are distressed properties perfect? They are ideal because the sellers are usually eager to get rid of them. On top of that, you can easily secure the deal under market value.

Consider searching for specific online sites or turning to your network. Searching public records can also be helpful. Look for homeowners who are behind on payments or someone who has just inherited a piece of property.

5. Pick Your Exit Strategy

Picking your exit strategy is all about deciding whether to sell a contract or opt for a double closing. Knowing which option to go for will depend on the wholesaling deal.

If you choose to sell the contract, you will simply match the sellers with buyers and profit from the selling process. Considering the quick turnaround and minimal risk is the most common strategy.

Executing a double closing involves possessing the property, meaning you will be the one to pay for all the costs associated with closing the property. This option is more involved and carries more risk. As such, investors only choose this option when they have a buyer who’s willing to pay a lot for the property.

How to Improve Your Wholesaling Game

Now that you know how to get into wholesaling property, here are a few well-known tips that are sure to help you find deals and become a better wholesaler.

Networking Is Essential

Always put yourself out there. The more people you know in the industry, the more likely they will think of you when they have a deal. So, it’s essential to increase your local exposure.

Some of the best wholesale deals are spread through word of mouth in both formal and informal settings. Accumulating the contacts of more people is an excellent way to stay in the loop.

However, networking takes a lot of time and dedication. Start by attending every local networking meeting or joining different real estate investment clubs. They provide you with opportunities to meet new people and increase your profile.

Always have your business cards ready at all times. Whether it’s during office projects or happy hour at your favorite restaurant, you never know when a conversation about wholesale properties will pop up.

Marketing Is Key to Finding Deals

Wholesaling is different from regular home-buying deals because wholesaling real estate involves an extra layer. The deal has to be enticing enough for the end investor to buy it, and you need to find deals at price points low enough to make it suitable for everyone.

One of the best ways to find deals is by investing in marketing. It doesn’t need to be a full-scale marketing campaign, but it has to be effective. Fortunately, there are several marketing options that will help you look for properties without hurting your wallet.

These options include:

  • Social media exposure
  • Bandit signs
  • Targeted marketing
Convert Leads to Deals

As essential as networking and marketing are, they will not help your business if you can’t convert leads to deals.

Dedicate some time to learn how to converse with a seller. How you speak to them and answer their questions will go a long way in helping you complete a successful deal.

The good news is that after closing a few deals, you will learn more about the process and find a seller faster. You will eventually figure out a method of converting leads to deals and make wholesaling houses much easier. Before getting to that point, you should be prepared to lose a few leads along the way.

Know Your Numbers

Make it a point to know and understand the numbers fully. Accurately keeping track of the numbers will ensure the entire wholesale process will be better.

There is more to think about than acquiring wholesale properties at a low enough value for end investors to see the potential. There will also be carrying costs, such as insurance, taxes, and utilities. These costs will increase quickly after a few months.

The wholesale properties might also need repairs, which would call for a contractor or services from someone with expertise in that area.

Some investment properties might seem like they will bring in a significant profit, but they still might not be the enticing deal potential investors are looking for in the end.

Wholesaling vs. Flipping Houses

Like we said earlier, there are plenty of options available to make a living from buying and selling real estate, and wholesaling is only one of them. Flipping houses is an alternative route that many people in Dallas, TX, consider.

We will look at both options, so you can determine which one will work best for you.

The Wholesaling Process

These are the general steps involved when wholesaling real estate. Remember that selling wholesale means that you are an intermediary between the seller and a buyer.

  1. Find a distressed home on the market, such as a home where the owners are looking to sell fast or one that needs a bit of work.
  2. Assign contracts with the intent of assigning that contract to an end buyer.
  3. Market the property at a higher price.
  4. Find an end buyer willing to pay that price and close the deal.
Benefits of Wholesaling Less Work and Expenses

With wholesaling, you do not need to repair the property. This makes wholesaling an ideal option for those looking for faster turnarounds or who want to spend less money on renovations.

​Ideal for New Investors

When you are unsure about diving into the deep end of real estate investing, wholesaling is a perfect way for first-time real estate investors to test the waters. It offers them an opportunity to learn the ropes under minimal risk.

Wholesaling is also ideal for investors who are buying investment properties in a new location. Since a strategy that worked perfectly in one location might fail in another, wholesaling real estate is an excellent way to get a feel of the surrounding areas.

Drawbacks of Wholesaling
  • There might be low availability of wholesale homes
  • Contracts and wholesaling procedures can be confusing
  • You might sell the property for less money than you paid
Flipping Houses

Thanks to the countless examples in today’s media, most people are familiar with the idea of flipping a house and the equitable interest it offers. These are the steps involved when flipping houses in Dallas, TX:

  1. Find a house (or multiple properties) for sale that requires renovations.
  2. Inspect the home to get an estimated cost of the necessary renovations.
  3. Purchase the house.
  4. Renovate the house as needed.
  5. Sell the house at a higher price, keeping in mind how much money the renovation costs.
Benefits of Flipping Homes

While flipping homes is not a guaranteed way of making a profit, there are several benefits it offers investors that wholesaling does not.

Greater Profit

When it comes to fixing up and selling a house, you have more control. For starters, it’s easier to determine a selling price when you know what the property is worth, having purchased it and overseen the renovations yourself.

Plus, you have a chance to make a larger profit because preparing a house for flipping adds plenty of equitable interest to the property. This is especially true if you are interested in flipping multiple properties at once.

More Profit Opportunities

The only option you have as a wholesaling investor is turning the property or contract over to the buyer, so there are more profit opportunities when flipping a house.

While many choose to sell the investment properties after renovating, you can also rent them out and earn an income over an extended period.

We recommend knowing your intentions before buying and flipping a house, and it doesn’t hurt to have a backup plan in case it’s challenging to find a potential buyer.

More Involving

The process of flipping homes will present you with a chance to glean a lot of valuable investor insights. While you will need a lot of effort and passion, few things come close to converting a fixer-upper into a dream home.

Drawbacks of Flipping Houses
  • There is more risk involved
  • You could lose a significant amount of your investment
  • The process is more time-consuming
Wholesaling Real Estate in Dallas, TX

Are you ready to buy your first house, complete your first deal, and create your thriving wholesaling real estate investment business? You can register for our free live real estate class HERE.

This class will teach you about wholesaling, real estate investment strategies, and more beneficial information:

  • What the Dallas, TX, real estate market is expected to do in 2022
  • Which real estate investment strategies to opt for and which to avoid
  • Proven ways of generating leads
  • Mitigating risks using no money or credit strategies
  • Tips for finding the right first house and other investment properties

Besides the networking opportunities this class will provide, there are plenty of other reasons it will be the most important event of your year. Remember, it’s essential to also know about other types of real estate investment strategies.

These strategies include flipping houses, passive income investing in rental properties, land development, buying with no money down, and value add strategies. The Dallas Real Estate Investment Association holds monthly training sessions, covering the full spectrum of investment strategies. Register for our next free session HERE.