Learn Real Estate Wholesaling to Make Extra Income – Side Jam Interview #10

 

Make Money by Starting a Real Estate Wholesaling Business

Welcome back everyone — Thanks for stopping by for another Side Jam Interview! With this post, you’ll learn more about Andrew, who started a side hustle in real estate wholesaling to make extra money.

Have you ever thought about starting a side hustle? Need to make some extra money, but not sure how to get started?

One of the best ways to start is by making a list of everything you enjoy doing. And then get creative — brainstorming how you can earn an extra income by doing what you love.

Enjoy the outdoors? Start a landscaping business.

An animal lover? Look into dog walking or pet sitting.

Aspiring writer? Try selling short stories online through Amazon.

Have an eye for fashion? Check out consignment shops to start flipping designer clothing, or even start a fashion blog.

Pretty much any topic you can think of can conceivably be turned into a way to make money.

You just need a little know-how, some imagination, and a desire to succeed. And yeah, some endeavors may be less successful than others. But that’s the beauty of learning something new — it’s all a process, trial and error.

While you won’t be massively successful at everything you attempt to do, you will always be better off than when you started. Whether it’s financially, educationally, or personally. (That’s my mantra, anyway!!)

But moving onto this week’s post — you’ll be hearing about a side hustle that Andrew and his wife turned into a super-successful side business.

 

BTW — Do YOU have a Side Jam you’d like to share?

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The Introduction

And now, here is more about Andrew:   

My name is Andrew. I am married and we have two young kids at home. I’m a financial analyst by day, and real estate investor on the side.

I recently started blogging about our family’s journey to financial independence through real estate, and have enjoyed helping others on their path to financial freedom through the blog.

 

The Interview Questions

Tell us about a fun, unique, or interesting Side Jam you’ve tried:

We’ve done all kinds of things in real estate (rental property, flipping, real estate agent, etc.). But one of the more unique and profitable things we’ve done is wholesaling.

For those who aren’t familiar with the term, a wholesaler will find distressed houses and put them under contract. Then they’ll sell the contract to another real estate investor who wants to rehab the house and flip it or rent it out.

So for example, if I got a house under contract for $100,000, I’d then assign the contract to another investor for say a $5,000 fee. They would then purchase the house for a net of $105,000 and I’d receive a $5,000 assignment fee.

 

What made you decide to learn more about wholesaling? 

When my wife and I started thinking about having kids, we knew we wanted her to be able to stay home with them. But we weren’t sure how to make our household budget work on just one income.

We decided to use some of our savings to put a down payment on a rental property, and start building passive income through real estate. However, once we got started, we caught the real estate bug and decided to jump all in to more active forms of investing.

We wanted to buy additional rental properties, but were out of cash. So to generate more cash, we started looking for other deals that we could either flip or wholesale to be able to invest in real estate with no money out of pocket.

After learning the ropes, we decided to focus exclusively on wholesaling so we could find good deals, and sell them to other investors who had the capital and time to fix them up.

 

The Details

On average, how much time do you think you spent per month wholesaling?

Now that we have kids, we no longer do a lot of wholesaling since it can be time-intensive. Not so much that it requires a ton of hours. But you do have to be available to answer the phone at any time. And you must be willing to go see houses right away, if it seems like a great deal — before someone else puts it under contract.

I would say between my wife and I, we spent about 20 hours a week on wholesaling as we were scaling it up. That time was split between sending out marketing, answering phone calls, following up on leads, going out to see houses, and networking with other investors to add to our buyers list.

 

In general, how profitable was wholesaling for you? 

Wholesaling can be very profitable, but it takes a lot of work and consistency. It’s also not an easy side jam to get started with little or no money.

At the peak of our wholesaling business, we were spending $3,000 – $5,000 per month in marketing (direct mail, Google ads, etc.) to find good deals.

I think we probably averaged about a $10,000 net profit per deal, and were also able to cherry pick and keep some of the best deals for ourselves as rentals or flips.

 

The Learning

What type of research or learning curve is required for real estate wholesaling? 

A lot of the real estate “gurus” will tell you that wholesaling is the best way to start out in real estate investing with no money. But we actually found the learning curve to be quite steep.

In order to be a successful wholesaler, you have to find REALLY exceptional deals. Your customers are other real estate investors, who already need a decent deal to make a profit. Knowing what a potentially profitable deal looks like takes some practice. You have to know the ARV (after repaired value – what it will sell for once it’s fixed up).

You also have to be able to estimate repair costs, often with only a 5 – 10 minute walk through. And you have to know how other investors run their numbers to know what they’d be willing to pay for it.

For example, if I had a landlord on my buyer’s list who wanted to buy rental properties that met the one percent rule, I’d have to figure out what the house would rent for after it was fixed up.

So I would run comps both for the value of the house and the monthly rent. If it would rent for $1,000 per month after $20,000 in repairs, then the investor might want to buy it at $80,000. Which means I’d need to get it under contract for $70,000 or less to be able to make a decent profit.

While the learning curve was steep at the beginning, I learned a lot of info about real estate that’s helped us as we moved forward. After walking through hundreds of houses, I can now get a feel for ballpark repair costs, hidden repairs to look out for, and am an expert at running comps.

 

broken window, dilapidated house
Photo by Griffin Taylor on Unsplash

 

What tips would you have for someone who wants to get started wholesaling?

Wholesaling is a great way to make a significant amount of money on the side if you’re willing to put in the work. If you’re looking to get started as a wholesaler, I would definitely start networking with other wholesalers and real estate investors to find out what it is they really do day-to-day.

I found local meetups, Facebook groups, and online communities such as Bigger Pockets to be great places to learn and build my skills.

Beyond that, having the right mindset is important. Wholesaling is certainly not a “get rich quick” scheme. There are a lot of ups and downs and trial and error to figure things out.

If you’re willing to commit and be in it for the long haul, it can be a rewarding side jam. Ultimately, as a wholesaler, you are a problem solver. It requires the mindset that your job is to help people in stressful situations (i.e. selling a deceased family member’s home, or finding a creative way to help them avoid foreclosure, etc.)

Often wholesalers get a bad reputation because of a few bad apples who use these situations to take advantage of people. But you can be one of the good ones, genuinely there to help people through a difficult situation to reach a financial solution.

 

The Reflection

Overall, what have you learned from the wholesaling process? 

To be successful wholesalers, we had to learn the ins and outs of real estate investing. The skills we learned in marketing, evaluating a deal, and estimating repair costs are invaluable to us now, as we continue to build our real estate portfolio.

I also learned a lot of sales skills. Since I’m an introvert by nature, talking on the phone or in person and negotiating don’t come naturally to me. It’s still not something I love doing, but learning sales and networking skills is something that’ll serve me well in any future entrepreneurial venture.

While I love real estate and the rush of finding a fantastic deal, I also learned some things about myself and what I didn’t really like about wholesaling. As I mentioned, I am an introvert so the constant interactions with buyers and sellers were draining. I also learned that I didn’t really enjoy always being “on call” — ready to drop everything to answer the phone or go see a house at a moment’s notice.

 

Is this something you would ever do again? Why or why not? 

We still do some wholesaling today, but have stopped most of our marketing. The leads we get now tend to come from relationships we built in the past.

We may decide to become more involved, once the kids are a little older and we have more time to dedicate to the process. I think it’s a great way to earn extra money on the side. Or even as a full-time job, if you put in the effort.

 

Thank you Andrew! Where can my readers find you online?

You can follow our journey to financial independence through real estate on our blog at https://wealthynickel.com.

 

The Wrap Up

Holy cow, that was a lot of super-detailed information — and many thanks to Andrew for providing the full scoop on his wholesaling side hustle!

And I’m totally impressed that he and he wife took it upon themselves to learn the ins and outs of real estate investing, in order to turn it into a profitable side business.

Real estate wholesaling isn’t exactly for the faint of heart, and appears to require quick thinking and an even faster turnaround. But they were able to make good money and were successful together as a family. #TeamworkMakesTheDreamWork

 

Here are some takeaways I jotted down from Andrew’s interview:

  • Tackling the most difficult projects will very often result in a greater sense of accomplishment, plus help you grow as a person.
  • Sometimes you need to spend money, in order to make money. (But only if you actually have the money to spend, and won’t suffer dire consequences if the business deal goes south).
  • Stepping outside of your comfort zone can benefit you long term and teach you valuable skills to move your career forward.
  • But also remember to stay true to yourself — If you’re constantly on the go, you may want to hit the pause button once in a while to relax and re-energize.

 

Thank you again to Andrew for taking part in this series, and providing so much valuable information on real estate investing! Be sure to check out his blog to read more about his family’s journey into financial independence.

 

Reader Questions: Is real estate wholesaling something you’d be interested in learning more about? 

Have you tried your hand at any other kinds of real estate side hustles?

How do you feel about the marketing and networking aspects that are often required in many sales-oriented roles? Super comfortable, or a hard pass?

I’d love to know your thoughts — Hit me up in the Comments!

 

Previous Interviews

Missed my previous Side Jam interviews? Click on the Related Posts below —

#1 – Cricket’s Plant & Worm Business
#2 – Nelly’s Online Forums

#3 – Robert’s Facebook Ads
#4 – Cheryl’s Group Centergy Instruction
#5 – Riley’s House Hacking Savings
#6 – Marc’s Selling Products on Amazon
#7 – Brian’s Blogging Activities
#8 – Gio’s Police Training Program
#9 – Jarek’s Self-Publishing on Amazon

 

Feature Photo courtesy of Peter Boccia on Unsplash

 

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Learn Real Estate Wholesaling to Make Extra Income

5 comments

  1. Love that Andrew thought of wholesaling not only as a way to earn money, but also help people in difficult situations. Thanks for sharing his story, Robin!

    1. Hey Andrew – Thank you so much for contributing! It was great getting to know more about you and your family’s FI pursuits!

  2. Another interesting interview. Who knew there were so many different ways to make money with real estate? Thanks to Andrew for his story. Thanks to you, Robin, for your continuous effort to help people.

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