Collecting Keys - Real Estate Investing Podcast

Wholesaling Real Estate: How It Actually Works (Podcast Guide)

Wholesaling means putting a property under contract with a seller, then assigning that contract, or double-closing, to another investor for a fee. It gets pitched as the no-money way into real estate, and Mike DeHaan, Dan Austin and Dylan Koch have spent hundreds of episodes explaining the parts that pitch skips. This guide pulls together what they've said about marketing, seller conversations, dispositions, exits and regulation, and points you to the episodes worth hearing first.

Start with these episodes

What is wholesaling, and how is it different from being an agent?

In EP 56, Mike and Dan walk the mechanics: you sign a purchase and sale agreement with the seller, then sign an assignment contract with an end buyer who steps into your shoes at closing. They tell buyers to demand to see the original purchase and sale agreement alongside the assignment, and to walk if a wholesaler won't show it.

On EP 1, they framed the difference from an agent as flexibility and risk. A wholesaler is legally on the hook to buy the property rather than collecting a commission, which is what lets them work through title problems and occupants. On EP 146 they describe wholesaling as a service business: if the seller were self-sufficient, they wouldn't need you, and refusing to do the extra work is the main reason wholesalers stall out.

From: EP 56 · EP 1 · EP 146

What marketing actually produces wholesale deals?

Mike's "marketing pyramid" in EP 162 puts targeted channels at the top: direct mail, driving for dollars and courthouse lists. He says roughly 78% of the several hundred deals his team had done over the prior couple of years came from those two channels, and that he'd rather talk to five people and get a deal than a hundred. Speculative channels like SMS and cold calling sit in the middle and take three to four times longer to close. Billboards, TV and radio he treats as brand awareness, not lead generation.

Dan's mail process in EP 197 stacks lists by motivation until the budget is hit, standardizes around roughly $5,000 a month in a new market, and runs a six-month sequence of unique pieces before looping back with refreshed data. His rule is to give any campaign at least three months, and if results are bad, the fix is usually the zip codes or lists, not the copy.

From: EP 162 · EP 197 · EP 165 · EP 428

Why is the seller conversation the whole game?

EP 53 is Mike's answer to what he wishes he'd known starting out: the house isn't the point of the conversation, the seller's situation is. Early on, he and Dan walked houses telling sellers "it's worth 300,000 but your problems mean we can pay 200,000," and got no deals. The shift was asking why the seller wants out and whether selling actually solves their problem.

On EP 129 Mike describes saving the house for last and asking three questions: why not list it, what's your timeline, and why did you reach out. Guest Cody Cressey on EP 342 builds offers collaboratively using the seller's own repair estimate, and warns against industry language like "following up." Guest Noah Gilliom on EP 112 trains around four motivators — financial, physical, emotional, spiritual — and says a "no" is often a seller who didn't understand the offer.

From: EP 53 · EP 129 · EP 342 · EP 112

Why is disposition the harder half?

EP 2 is built around exactly this: getting the contract is half the job. Most buyers who say they want a cosmetic flip never respond once you send the address. By EP 56, Mike and Dan said acquisitions had gotten easier while disposition got harder, and they'd stopped blasting a list in favor of matching specific properties to specific buyers.

EP 34 lays out how to build a buyer list from scratch: local off-market Facebook groups, researching who actually closes, county records, and PropStream filters for recent cash buyers. EP 442 adds skip tracing the buyers who won deals you lost, and charging earnest money big enough to hurt — $2,500 for repeat buyers, up to $15,000 for a new buyer on a hard deal. Guest CJ Moss on EP 177 runs a one-hour open house on every contract with highest-and-best due by noon the next day.

From: EP 2 · EP 34 · EP 442 · EP 177

Should you wholesale it, flip it, or keep it?

The first filter is cash position. On EP 25, Mike and Dan point out a flip and a BRRRR both tie money up four to five months, so wholesaling is often the right call just to keep the marketing machine running. Dan's three "don'ts" on EP 221: don't slow your pipeline, don't spend money you don't have, and don't get outside your buy box.

They have shifted here. EP 341 is about flipping after two years of strictly wholesaling, and Dan's rule is to keep three months of operating costs in the bank first — about $45,000 for their Spokane business — and only take "carpet and paint" flips. The deal that justified it was contracted around $200,000 with a $20,000 rehab and roughly $300,000 exit in about 60 days. He also warns against "commission breath": a $15,000 fee reinvested at a $5,000 cost per deal can produce three more deals.

From: EP 25 · EP 221 · EP 341 · EP 328

Novations, double closes, and the new wholesaling laws

A novation is a conditional release of the original purchase agreement replaced by a new one, which makes the deal financeable. On EP 130, Eric Brewer explains that unlike an assignment, a novation works for FHA, VA, Fannie and Freddie buyers, and that he pitches it to sellers as an "equity protection program" because nobody knows the word. Dan uses them selectively — on EP 427 he walks two live examples, and pushes back on operators who collect $30K–$60K for simply listing a house.

Regulation is moving. EP 328 covers South Carolina's law targeting contracting, marketing, assigning and profiting, which the hosts trace to a 2021 case where a wholesaler cut a listing agent out of a commission. EP 158 covers North Dakota's licensing requirement, and EP 453 covers a Washington rule requiring disclosure of a seller's right to a buyer-paid appraisal plus a cancellation window. Their consistent workaround when assignment is blocked: double close, sometimes at two separate title companies.

From: EP 130 · EP 328 · EP 453 · EP 427

What does the ramp to a first deal really look like?

The numbers the hosts repeat are not fast. On EP 344, Mike says direct mail started in January 2020 and the first deal took about five and a half months and roughly $30,000 in spend. On EP 300, Dylan quit a pharmacist job in October 2021 and didn't close until March, earning $5,500 after about $30,000 in business spend. EP 69 puts their first deal at $7,500 after roughly $20,000 spent, the second at $13,000 to reach breakeven, and a six-figure month about three months later.

Guests match the pattern. Shane Schrader (EP 354) spent about $35,500 on mail for eight deals and roughly $267,000 in revenue. On EP 350, Mike says expect six to eight months to a first deal on the hustle route, and to stay transactional until you have $100,000 in the bank.

From: EP 344 · EP 300 · EP 69 · EP 350

Where do the hosts draw ethical lines, and where have they changed their minds?

On EP 211 Mike and Dan say renegotiation belongs in the due diligence period, not days before closing, because sellers have already committed funds to a move. They note some trainers teach the last-minute price drop as a tactic, and call it the reason wholesalers get a bad name. Their two tests: would you be comfortable if a third party said this to your grandmother, and would it look fine on the front page of the local paper. On EP 459, Greg Helbeck describes the same late "reinspection" retrade as the scummiest common tactic in the business.

They've also changed their minds about scale. EP 376 explains winding down a 15–16 market national operation: $4,800 cost per deal and ~$15,000 average profit nationally versus $2,500 and ~$22,000 locally. On EP 443 and EP 452 they and Cole Ruud-Johnson argue the sweet spot is roughly $1.5M–$2.5M a year with three to five people. In EP 460, Mike and Dan announce they exited their home buying company after nearly six years to run a lending business — and on EP 473 they describe wholesaling as a business to make your first money, not a forever play.

From: EP 211 · EP 376 · EP 460 · EP 443

Frequently asked questions

How much money do you need to start wholesaling?

The hosts consistently describe $20,000–$30,000 in marketing spend before a first deal, spread over four to six months. On EP 435 Dan suggests $3,500–$5,000 a month for mail with a 90 to 180 day commitment, and on EP 433 Mike told a listener with $2,000 to save to $10,000–$15,000 first.

How long does it take to get a first wholesale deal?

Mike's first took about five and a half months, Dylan's about five, and several guests report four to six months. On EP 350 Mike says expect six to eight months on the hustle route, and EP 165 stresses that consistency is one of the two biggest predictors of success.

Is wholesaling becoming illegal?

Some states have added rules. EP 328 covers South Carolina's law targeting contracting, marketing, assigning and profiting; EP 158 covers North Dakota's licensing requirement; EP 453 covers a Washington disclosure and cancellation rule. The hosts' common responses are double closing, transparency with sellers, and expecting more regulation.

What's the difference between an assignment and a novation?

With an assignment you transfer your contract to an end buyer, which cash investors can use but FHA, VA, Fannie and Freddie borrowers generally cannot. On EP 130, Eric Brewer explains a novation replaces the original agreement with a new one, making the deal financeable to a retail buyer.

Is the buyers list or the deal the harder part?

The hosts say disposition. EP 2 makes the case that selling the contract is its own sales process, and EP 56 notes acquisitions got easier while dispo got harder. EP 34 and EP 442 cover building a list from Facebook groups, county records, PropStream and the buyers who beat you on deals you lost.

All 120 episodes on wholesaling