- Todd Baldwin has made millions buying and selling real estate. Now, he is focusing on wholesale business.
- Baldwin, who brought in $1 million from five deals in 2022, said it was an efficient way to make money.
- Networking with other investors and buyers is essential to being a successful wholesaler.
Todd Baldwin has built a fortune and achieved financial freedom by investing in real estate.
He He bought his first property in 2015 at the age of 23. A six-bedroom house outside Seattle was $506,000. He made it work for money.”House hacking:” That means he lived in the master bedroom with his girlfriend (now wife) at the time, converted the smaller room into an office and rented out the other four rooms to cover the monthly rent.
Since he was living free and collecting rental income, he continued to buy rent, saving a lot of money in addition to his six-figure salary from his day job in sales. At 25, Baldwin’s net worth has surpassed $1 million, largely due to rental income, he said. At the age of 28, he became a multi-millionaire and felt comfortable doubling his real estate business from 9 to 5.
By 2021, Baldwin earned over $1.5 million. A major portion of the proceeds came from the sale of five properties. An insider saw the seller’s statements and the tenants’ payments that confirmed these details.
Today, the 30-year-old investor makes most of his money from wholesale real estate. In the year In 2022, he has secured a little more than $1 million from five deals, and expects to close at least one more by the end of the year. An insider confirmed this by looking at bank account deposits.
He explained that he has to pay tax on his income. Since his income tax bracket is 40%, he expects to pay $400,000 in taxes, which means he will take home about $600,000.
“I don’t use cash or credit, I don’t have any expenses,” he told Insider when it comes to wholesale business. “The only costs would be to pay for marketing or cold callers, but I don’t do that. There’s almost no risk to me. I’m literally a middle man.”
In addition to being low risk, it is one of the most efficient ways to make money: “I never found anything better than wholesaling real estate up until the time I was dealing with the dollar,” he says.
The way it works is when the person acting as a wholesaler makes a deal on a house or land, finds a buyer – usually a real estate investor – willing to buy at a higher price, and pockets the difference. Once the transaction is closed.
For example, Baldwin made a deal earlier this year with a seller who wanted $800,000 for the property. He didn’t want to list on Redfin or Zillow, talk to open houses and real estate agents, and lose money on agent fee sales. Instead, he wanted to do what’s called an off-market deal — and he reached out to Baldwin to get it done.
“We agreed that if I could sell it for more than $800,000, I would do anything Delta, so if I sold it for $825,000, I would make 25 grand,” Baldwin explained. House for $900,000 and profit for $100,000.
He estimated that he spent 80 hours on the five deals he made in 2022. This comes out to 10, standard 8 hour workdays.
In those hours, everything involved in the process from start to finish is included: finding the seller, marketing the property, talking to potential buyers on the phone, driving and walking on the trails, walking, and putting the contract together. .
One of the reasons he was able to close deals quickly was the network he had built up over the past seven years: “When I started my real estate business in 2015, in addition to buying and renting houses, Building a List of Investors Looking to Buy, Sell or Flip Real Estate My list contains about 15,000 people, so I can make a phone call to that list and make a deal in half an hour.
How to start a real estate wholesale business in 4 steps
If you want to wholesale it can be done in small quantities.
To help novice investors get started, Insider gathered advice from Baldwin and fellow Seattle wholesaler Ludomir Wannot and put together a four-step guide to wholesaling real estate.
Wanot does wholesale business It is called Evergreen Housing Network. His 11-person team does about 60 deals a year and averages $35,000 in negotiation revenue, he told Insider. When his company was founded, when he first started, “I didn’t know what I was doing,” Wanot recalled of his first contract.
1. Educate yourself on how wholesale business works
If you are starting from scratch, you must first understand how wholesale business works.
“Reading or listening to audio books is the cheapest way to learn wholesale,” Wanot said. “Before I start any job, I want to learn as much as possible to reduce my chances of making costly mistakes.”
His popular books include:Real Estate Wholesale Bible“,” “If you can’t wholesale after this, I have nothing for you” and “The best wholesale book ever.”
You can also educate yourself on the topic by taking an online course or watching YouTube videos, Baldwin said.
2. Network with other wholesalers and build a list of potential buyers
The sooner you start building a list of potential buyers, the better. After all, once you meet someone who wants to sell their property, you need to find someone who will buy it.
“Join real estate investing groups on social media in your area,” says Baldwin, who is a member of several Seattle-based investment groups on Facebook. “In those groups, ‘Who is interested in buying off-market properties?’ And over the past three years or so, I’ve built a legitimate buyer list of about 15,000 investors.
Do a Google search to find a community in your zip code and start attending local real estate meetings. It helps you build your network and connect with some active buyers in your area. Additionally, you can connect with other wholesalers or people who are doing what you want to do and ask them how they got to where they are.
“Surround yourself with like-minded people who have successfully built their own wholesale business and learn tips and tricks that work for them,” Wanot advises. He recommends connecting with other wholesalers through Facebook communities, sites like Eventbrite Or meet upAnd mass conferences, which usually happen a few times a year.
3. Drive through neighborhoods to find properties and sellers
When Wannot started wholesale, he would drive an hour around the area looking at the properties.
“I wrote down the address of every distressed property,” he said. “After that I used it needtoskip.com I went through all the owners’ phone numbers and called each one individually to see if anyone wanted to sell their home.
He had a script that he used whenever someone called him. It was a very boring activity and “a lot of them were really upset that I was calling,” he said. It took about 300 calls, but the owner, who was interested in selling the property, finally picked up the phone.
“If you call anyone, make sure the person is not on the do not call list. It is illegal to call anyone on this list,” he said.
Baldwin was called cold when he first started. It calls out landowners who specifically list their properties as “For Sale by Owner” (FSBO). You can find FSBO listings on Craigslist and Zillow, he said.
“I picked up the phone and started calling,” he said of his first wholesale deal in October 2021. He seems to have a bit of a start-up’s luck: “It didn’t take me long – five or six phone calls – to get someone interested in selling me.”
You can also reach out to wholesalers in your area and see if they need help with any of their deals, Wanot said. He used a Facebook group called Wa Real Estate Investing to reach out to local wholesalers, and two of the people he met needed help with their transactions: “I offered a buyer for their deal and they offered to split the placement fee. I ended up selling one of the two houses he had a deal with and made $20,000 per transaction.
If you have a small budget, there are ways to earn foreign currency for cold calling, Wanot added. For example, “Soundless voicemails can be made as software. Roar It gives customers the opportunity to target more people at the same time at a lower cost. Once homeowners listen to a voicemail and want to sell their home, they can contact you by text or call.
4. Market and sell the property
Once you find the seller and have the property under contract, it’s time to sell.
Ideally you already have a list of buyers in your area that you can reach out to. To grow your list, “follow other investors or flippers who are buying off-market homes,” Wanot says. “Use an Excel spreadsheet to keep their email and phone number in one place and contact them when you have a property to sell.”
To market your property, start by simply recording a video of the location on your phone. Along with the property description, send an email to your list of buyers. Here’s what Baldwin does: “I use an email template with links and photos to be effective. I just change the name of who I’m sending it to, and then I can send it to a whole list.”
Of the thousands of people he can contact about the property, he says, about 100 will be followed up. And out of 100 people looking for more information, maybe three will want to visit the property. When it’s time to visit, he’ll tire them back to back to be as efficient as possible.
When you accept the offer, you must write a contract for the agreement. Baldwin does this by himself LegalZoom, a site that lets you create legal documents without necessarily hiring a lawyer. “I found the exact template I needed on LegalZoom. It took me 12 minutes to write the contract,” he says of the first contract. “And I didn’t even pay for it. I used the free trial and then canceled it.”
Then used the free version Document symbol To fulfill the contract. “I wrote the contract on LegalZoom for free and had the buyer sign it on DocuSign for free, so, all in all, my expenses were zero — except for the gas I spent driving to the property for viewings.”
If you don’t have a large list of buyers, you can always partner with other large wholesalers, Wanot says: “If you’re just starting out and haven’t built your loyalty or list of buyers yet, another experienced wholesaler can.” It helps you with 50% of the fees you allocate to selling your properties through their buyers. This will ensure that you can close the sellers house and close your first deals at a profit.