Wholesaling properties in any market without any capital is possible.
In this episode, Virtual Investing Mastery (VIM) instructor Lauren Hardy introduces the concept of co-wholesaling—a collaboration of investors working on a deal together. She also talks about what got her started in co-wholesaling and how it improved her business tremendously.
- On the disposition and acquisition roles in a wholesaling partnership
- The best type of wholesalers you need to be in relationship with
- The goal of co-wholesaling and its advantages
- How co-wholesalers make money
- On solely focusing in co wholesaling
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In every business, you typically need some capital to get started. Well, I’m going to teach you about a business where you don’t need any capital to get started. And that is co-wholesaling. As a co-wholesaler, it is the one business where you can get started with absolutely no money. I am going to talk about, what is co-wholesaling? What is your job function as a co-wholesaler? How you could solely focus on just co-wholesaling properties? And how do you even make money as a co-wholesaler? And lastly, I’m going to go into why you might just want to focus strictly on co-wholesaling for your entire business. All right, guys. So, let’s get into it. What is co-wholesaling? Co-wholesaling is when you are wholesaling houses, but you’re doing it as partners. So usually, it is when an acquisition wholesaler and a disposition wholesaler are working together to put the deal together and make money together. It’s like a form of a partnership.
I’m going to focus on being a disposition co-wholesaler. So, what the disposition co-wholesaler does is they’re the one that is going to find the buyer for the property or for the contract that you’re trying to sell. So what is your job as a co-wholesaler? As a disposition co-wholesaler, your job is to build a huge buyers list. You want to know every investor in town. You want landlord buyers. You want flippers. You want developers on this list. Because when an acquisition co-wholesaler brings you a deal, you need to be able to confidently say that you’re going to be able to find a buyer for that deal. Another part of the job is you need to make friends with lots and lots of other wholesalers, especially the newer ones that don’t have big buyers list.
These are the people that you are going to build relationships with. So when they have a contract, you are able to work with them and they will keep coming back to you, bringing you all their contracts. And it’s your job to find the buyers for those contracts. So, it’s a very mutually beneficial relationship. I’m going to give you a quick tip. The best wholesalers that you need to make friends with would be the ones that are virtual like the students in my coaching program. The wholesalers that are virtual and they’re doing the acquisitions work. They’re always looking for boots on ground. And you as the disposition co-wholesaler is that exact person. You will be the boots on ground for them. And that is huge. That’s very important. If you can establish those types of relationships, these virtual wholesalers are going to keep bringing you deal after deal.
So, where do you come in the transaction? You come in as the disposition co-wholesaler when there is a contract on a property. So say another wholesaler brings a contract to you and they say, “Hey, I need help moving it.” You are going to handle the whole disposition process. So, you might handle the buyer walkthrough. You’re going to handle marketing it to your buyers list. You’re going to be the one who has all the escrow connections in town. You’re going to help transaction coordinate on the sale. Your goal is to get the most out of this contract and make the most amount of money for both of you guys. The best part about being a disposition co-wholesaler is it eliminates the acquisition part of the job. And many times I hear that this is the hardest part. If you don’t enjoy sales work or marketing, then the acquisition side of wholesaling is not going to be fun for you.
It’s not going to be fun to do the whole process throughout. I personally do the whole process. So, we get our own contracts. We do our own seller marketing. We do our own acquisitions. And then, we also disposition our own deals. I also disposition deals as a disposition co-wholesaler for other wholesalers in my market. I can handle it. My team can handle that type of work. But if you are not into sales and you don’t want to do that type of work, then being a co-wholesaler is very in line with your skill set most likely. You would probably enjoy that business a lot more. So, how do you make money as a co-wholesaler? Well, you typically get a percentage of the wholesale fee. That is my favorite way to structure it. So typically, what I offer as a disposition co-wholesaler is 40% of the wholesale fee.
I only take 40, and there’s a reason. The acquisition work and the marketing costs money and takes up a lot more time. And I’m aware of that. So I feel like it’s fair that I get a little bit less because I am doing less work and there’s no out of pocket expenses for me being the disposition co-wholesaler. So, I’m pretty fair in that way. I do know other co-wholesalers that want straight 50/50. And that, if you can get that deal as the dispo co-wholesaler, good for you. But me personally, I think that I’m going to get the wholesalers coming back for more if I give them a little bit more of the commission. And really I’m trying to build a long-lasting relationship where wholesalers will bring me more contracts. So, how do you focus on just co-wholesaling? You have to build a massive buyers list and you have to make a lot of connections.
Making a ton of friends, make a lot of wholesaler friends, make a lot of investor friends. But most importantly, every day you need to be building that internal buyers list that you have. And these are things that you can do for free. It doesn’t cost money to build a buyers list. It doesn’t cost money to make friends with other wholesalers. So, that’s why this is a great strategy if you have very little funds to start out. You guys might’ve heard of a company called KeyGlee, this company does this exact thing and they’ve really mastered it. I love the KeyGlee model. And I think that it’s great for somebody that just wants to solely focus on co-wholesaling. So co-wholesaling was not something that I did up until about a year ago, believe it or not. I never really thought to just focus on it, but I had some people approach me with contracts and they needed help moving it.
And we had the best buyers list in town. So, we did a few transactions and it really worked out for both of us. We realized that it wasn’t that much extra work for us to find those buyers. And the acquisition wholesaler realized that we provided a ton of value because what we were able to get for that contract was actually way more than what they were able to get. So, it was actually worth it for them to give us 40% of the profit. So we built that relationship, and then we realized we needed to build more of these because we were making a ton of money this way. So, my business now focuses on co-wholesaling for other local acquisition wholesalers. If you guys want to learn more about virtual real estate investing, check out my program at www.wholesalinginc.com/virtual. Thanks again, have a great day.