Lecture Notes: Wholesaling Real Estate with Dom Does Deals

Introduction

• Presenters: James & Jack (School of Hard Knocks)
• Guest: Dom Does Deals, real estate entrepreneur based in Central Texas
• Topic: Wholesaling real estate in San Antonio
• Objective: Understand what to look for in properties, the process of wholesaling, and how to make money

What is Wholesaling?

• Definition: Selling a contract for a property instead of the property itself
• Process:
  • Acquire a deal
  • Sell the deal to an investor
  • Investor handles the rehab to make the final sale
• Benefit: No rehab work required by the wholesaler, both parties make money

Types of Properties in Wholesaling

• Common Characteristics:
  • Often distressed or outdated
  • Banks won't finance them, requiring cash buyers
  • Properties in good communities but needing TLC
• Key Term: ARV (After Repair Value): Value after rehab
  • Example: Old kitchens, outdated fixtures

Finding Wholesale Deals

• Driving for Dollars:
  • Drive around looking for properties that need work
  • Signs: No trash taken out, property looks vacant or neglected
• Research:
  • Check property ownership and status
  • Contact owners or proxies
• Services:
  • Paid services can provide lists of potential properties
  • Good for those with some starting capital

Pricing and Contracts

• Pricing Formula:
  • Compare similar properties sold recently
  • Set your price based on comparable sales (comps)
• Contract Process:
  • Use standard real estate contracts
  • Earnest money deposit (usually 1%) to show seriousness
• Title Companies:
  • Find local title companies that work with wholesalers
  • Prefer face-to-face interaction to handle issues

Cash Buyers

• Definition: Buyers with significant liquid capital
• Reason to Pay Wholesaler: Property’s price is a deal, allowing the cash buyer to profit
  • Example: Property bought for $235k, ARV $350k, rehab costs $30-35k
• Wholesale Fee: Typically around $20,000 per deal

Success Stories and Challenges

• Biggest Deal: 13-property package, earning $150,000 wholesale fee
• Challenges:
  • Entrepreneurial grind, lots of legwork and learning
  • Building rapport with sellers, running accurate comps
  • Staying motivated and finding what works

Reasons to Wholesale vs. Flip

• Liability: Less responsibility as a wholesaler
• Funding: Essential for young or new investors to generate revenue without needing large capital

Getting Started

• No License Required
• Anyone can Start: Even 17-18 year olds can become millionaires
• Steps: Find properties, analyze, put under contract, find cash buyers

Conclusion

• Contact Information for Dom: IG: Dom Does Deals
• Offer: Help and networking opportunities for new wholesalers
• Wrap-up: Encouragement to start wholesaling, potential for significant earnings

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