Introduction

Welcome to the world of real estate wholesaling. This book was written to help you understand a very appealing facet of the real estate investing industry and to help you succeed as a real estate wholesaler. In the pages to follow, you will discover the opportunities and rewards, as well as the risks and challenges, of wholesaling real estate.

If you are new to wholesaling, this book will provide you a comprehensive outline and roadmap of how to get started and succeed. You will also want to use this book as a reference guide to refer back to as you navigate through your first few wholesale transactions.

If you are already actively wholesaling, this book will help propel you to the next level of achievement. I will discuss and uncover many different ways to automate your real estate investing efforts and build a business that is not completely dependent on you as the business owner. Many real estate investors’ sense of success comes from the process of building a business that “works” or is “profitable.” From my point of view, having a business that works is not enough. I believe success is when your real estate investment wholesaling business is not only profitable, but also gives you the time to enjoy your life and fulfill your passions and dreams. I believe success is defined as having a turnkey, systems-dependent business that serves as a vehicle for all the people it touches: the owners, the employees, and the community. Without a doubt, both beginning and advanced investors alike will benefit from implementing the lessons learned in this book.

Over a decade ago, I picked up my first real estate investing book. That book was a catalyst for major change in my own life and I want this book to be the catalyst for you, the next generation of real estate investor. Study hard. Keep an open mind. And take charge of your financial destiny once and for all.

THE SHRINKING MIDDLE CLASS IN AMERICA

One of the reasons I believe you should take a much greater interest in controlling your financial destiny is to ensure you don’t fall victim to the shrinking middle class in America.

Unfortunately, the middle class in the United States is being systematically destroyed and nobody is doing much to stop it. The number of middle-class families who earn between $40,000 and $200,000 a year is shrinking at an alarming rate. Median household income levels have fallen, jobs are being sent overseas, debt burdens have soared to new heights, and millions of formerly middle-class Americans have fallen below the poverty level.

Once upon a time, a college degree was a ticket to the middle class; today’s college graduates are having an increasingly hard time finding work. Here are some scary facts about the shrinking middle class in America:

• Last year, an astounding 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed.1
• According to one survey, 77 percent of all Americans are now living paycheck to paycheck at least part of the time.2
• While debt loads for middle-class families are going up, the net worth of those same families is going down. According to the Federal Reserve, the median net worth of families in the United States declined “from $126,400 in 2007 to $77,300 in 2010.”3
• Each year, the average American must work 107 days just to make enough money to pay local, state, and federal taxes.4
• According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.5
• According to the Economic Policy Institute, America is losing half a million jobs to China every single year.6
• Today, 40 percent of all Americans have $500 or less in savings.7

Statistics tell us that for the first time in history you may not be better off than your parents. People are unfortunately worrying about survival rather than chasing their goals and dreams. We are rapidly being transformed from a country of middle-class citizens into a country of government dependents.

What you are about to learn in this book can help you avoid becoming a statistic. Real estate has long been America’s number-one wealth builder. It is a tried-and-true path to building wealth and has transformed the lives of millions of regular, everyday people.

HOW I GOT STARTED INVESTING IN REAL ESTATE

Twelve years ago, at the age of 23, I was a rookie playing for the Chicago Bears in the National Football League. In the offseason I had what I thought was a great idea and I decided I was going to start a Mexican restaurant with the money I had saved.

Yes, I was officially an entrepreneur. Unfortunately, at the time, with very little business education behind me, I can’t say I was necessarily a good one. Seriously, who starts a Mexican restaurant while he is still playing in the NFL in the prime of his life? I distinctly remember warming up before a game against the Minnesota Vikings and getting a call before kickoff from Alfredo, the manager of my restaurant, asking me what to do because we were out of tortillas.

I started the restaurant because I thought having a good, entrepreneurial idea was enough to make serious money in business. Some people call this an “entrepreneurial seizure.” In my case it was more of an “entrepreneurial burp.”

After injuring my knee and then being released from the NFL (for being too darn fast), I poured all my entrepreneurial energy into the restaurant. I was working 12- to 14-hour days and hating every second of it. I figured out very quickly that it was a tough business and at the time I hadn’t invested enough in my education to make it successful.

There are moments in everyone’s life that have the power to spark massive change—moments that define your future and the path you ultimately choose to take. Not living up to the personal goals I had set for myself in the NFL and then having my entrepreneurial dream turn into a nightmare was too much for me to handle. After close to two years of running the restaurant I realized I didn’t have a passion for the business and I knew I had to make a change—a massive change.

I immediately started reading books about something I had always had a passion for: real estate. I had no prior knowledge, had never taken a class, and had nobody to ask for advice regarding how to invest, but it didn’t matter. I knew I could find the answers and people to learn from if I was determined enough. I also knew I had to spend time learning about the industry before I jumped in headfirst. I was determined not to make the same mistake and get into an industry without the proper education.

As a result, I devoured books and courses and started attending many different real estate investing seminars. After months of studying, I decided it was time to get off the sidelines, take action, and purchase a few properties. I also knew that I would continue my education as I acquired more properties and that I was never going to stop learning as my investment portfolio grew. Thus, my personal journey into the real estate investing world began.

Even though I was still very new to the industry, I quickly realized its potential. I subsequently decided to partner with Paul Esajian, one of my good childhood friends, and Konrad Sopielnikow, one of my old football teammates from Yale University.

To make ends meet, I was still working long hours in my restaurant, wearing what seemed like 15 different hats at once. In the early morning and on the weekends, I’d put on my real estate hat and look at properties. After purchasing a few rental properties, my partners and I decided it was time to start flipping real estate so we could grow our real estate investing business.

WHY WE DECIDED TO START WHOLESALING

After purchasing a few rental properties we then acquired two properties we started rehabbing to flip. The problem was we were pretty much out of capital, yet we still kept finding other good real estate deals.

This is when we discovered how valuable learning how to wholesale real estate could be. With the first two properties we wholesaled we made over $50,000. The two transactions took just under two months to structure and it helped us launch our real estate investing careers.

Wholesaling provided the gasoline we needed to really grow what started out as a hobby and quickly became a business. Over the past 10 years of investing in real estate, wholesaling has been a very large part of our real estate investing business.

Over the years, we have utilized wholesaling in various ways in our real estate business:

• Whenever we need money for other real estate deals we wholesale properties to create some of that capital.
• If we run across a real estate deal that is not in our backyard, we usually prefer to wholesale the property to another investor.
• Whenever we feel we have too many properties we are rehabbing we always wholesale other real estate deals that we find to other investors.
• If we are working on larger redevelopment projects, we will often choose to wholesale other deals that come our way.
• We buy a lot of properties from other wholesalers and it has been one of our better sources for properties we have fixed and flipped.
• We buy a lot of properties from other wholesalers that we keep and turn into rental properties that create...