With its beautiful weather, beach-front views, and favorable tax rates, Florida has become one of the Nation’s top destination addresses when folks relocate.
That demand along with a strong climate for real estate investing has made wholesaling real estate in Florida a highly desirable - and often lucrative - venture for many people.
In this article, you’ll learn the step-by-step process of how to wholesale real estate in Florida whether you’re a seasoned investor or just starting out in the wholesaling business.
When wholesalers all across the country are making multiple five- and six-figures per month flipping contracts on real estate, we hope this article inspires you to take action to change your life with real estate investing and wholesaling.
Popular with new investors, wholesaling real estate is an opportunity to generate wealth in real estate by finding properties - residential, multi-family, or even commercial - and putting them into a contract.
Once you find the wholesale deals you’ll either sell the contract or complete a double close on the property. While it sounds easy, without taking the proper steps you are setting yourself up for failure.
There are eight key steps to follow when it comes to wholesale real estate in Florida. Following this path can lead to not only a successful first deal but create a framework that you can build a profitable wholesaling business for years to come.
If you are going to play the game, then you need to know the rules of the game. We’ll cover the laws more in our section “Is it legal to wholesale real estate in Florida?”
The basic premise is that you need to market the contract - not the property - when marketing the property. However, you need to be abreast of Florida’s real estate law.
Wholesaling real estate, like anything worth doing, is hard work, but you can cut into that workload by partnering with a wholesale mentor.
This mentor will reduce the number of mistakes you make in the process and help guide you towards successful deals. Don’t fall for every guru that claims to be a wholesale mentor.
Make sure to vet all your candidates by looking at their number of wholesale transactions completed and their knowledge of your local market. Also, think about what you expect from a mentor and what can a mentor expect from you.
The goal is for them to educate you on their investment strategy and not to provide you with the investment opportunity directly. A successful mentor can shorten the learning curve in wholesaling real estate and be worth their weight in gold.
“If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.”
As you find those real estate mentors, learn more about the market and terminology used in the Florida real estate market. Be prepared to use the words and terms that investors and real estate agents use when analyzing the market. Some of the key ones will include:
This is just a sample of some of the possible real estate terms you’ll need to know.
This is where it begins to get fun for most people. Get out to networking events and meet new potential investors. There are a lot of people out there that don’t want to do the groundwork but want to own real estate.
They have the cash, you find the deal, and together the magic happens. Why build this list before you find the property?
First, the moment you put that property into contract your clock starts ticking towards closing and you don’t want to lose a deal because you couldn’t find a buyer.
Second, it will help you find the property that your investors are looking for. You could find the sweetest single-family home to wholesale in Florida but if your investors are all multi-family focused you’ll be out of luck when trying to assign the contract or double close.
You can also check out this quick video below that talks about how to find cash buyers online for free!
Now the fun part begins, finding that distressed property. The key is to find people that have a higher motivation than the money – for the divorcing couple it is the desire for separation, for the family that lost a member it is moving through the grieving process and closing the estate, or for the person who lost their job it is getting off the house debt.
The easiest market to find are those behind on their mortgage and facing foreclosure. Look for the pre-foreclosure filings at the local court houses and begin calling and working on them. As part of your research be sure to include a title search to find any potential lien holders on the property.
Read Also: Motivated Sellers: How To Find And Negotiate With Them
You’ve identified a property and are ready to start working to put the property into a contract. How much should you offer on the property?
When wholesaling Florida real estate you need to focus on the math and do your due diligence by looking at the after-repair value (ARV), estimating repair costs, and using the maximum allowable offer (MAO) formula when making a purchase.
If you don’t have contractor experience, make friends with one fast and take them to inspect the property with you to provide you with a reasonable repair cost figure. It might sound like a good idea to understate the repair amounts to make the deal look sweeter to investors however they’ll have their own contractors giving them their repair amount values. Vary by too much and the investor will lose faith in your numbers and your ability as a Florida wholesale specialist.
The Maximum-Allowable Offer Formula is a great formula, but like everything else, you need strong numbers. A common calculation is to take the after-repair value times 70% for your base number. Then subtract fixed costs, real estate purchase price, investor’s profit, and your assignment fee.
Make sure you have a contract that allows you to assign the property and that does have a substantial deposit – usually 1% of the purchase price or at least $500 – attached to it. It is a requirement in Florida that all contracts have a deposit attached to them.
And don’t underestimate the concept of wholetailing. This is a combination of flipping houses and wholesaling where you purchase the property with hard money or cash, make minimal improvements to clean up the house, then sell the property on the market to another investor.
The most important thing before signing any contract is to have an exit strategy for every real estate deal you conduct.
That property is now under contract and you have a determined number of days to get the contract assigned before either walking away or buying this property yourself. Go to the cash buyers list you established earlier and start shopping this property to the highest bidder. Work with your mentor to generate an assignment fee that covers your expenses while also keeping the contract’s price within reason for the investor.
Whether you conduct an assignment of contract to the cash buyer or create a separate contract with the new buyer will likely be determined by the investor purchasing the property. The easiest, quickest, and most profitable way is to assign the contract to the new buyer and allow them to proceed to close.
However, sometimes it is required that you conduct a simultaneous closing - or double closing - in which you settle the initial contract purchase and then resell the property to the fix-and-flip or rental property investor.
You’ve put in a lot of hard work. Now is the time that you get to close the deal and collect the assignment fee you earned. Whether it be an assigned closing or you have two closings, you now get paid for all the hard work and effort you put into the transaction.
Yes, wholesaling houses is perfectly legal in the Sunshine State. Florida, like many other states, does not require wholesalers to have a real estate license as long as they follow the established guidelines when wholesaling Florida real estate.
Florida Statute Chapter 475 is the section that covers the transfer of real property and outlines the requirement for who must have a real estate license.
The most important thing for wholesalers to remember is that they can only market the contract and get paid for the sale of the contract. Only a licensed real estate agent can be paid a commission in the real property sale.
Read Also: Is Wholesaling Real Estate Legal In Florida?
The income opportunities are endless when it comes to wholesaling real estate in Florida. With an average assignment fee of $10,000 - $15,000, it doesn’t take long to make $100,000 in gross assignment fees in a year!
As a new wholesaler, it will take time to build up to these returns. There will be missteps along the way and it will take time to get your process ironed out, but once you have the systems in place you can begin seeing a return for your hard work.
To shortcut your path to achieving the highest income with real estate wholesaling, make sure you are educated and receive extensive wholesale real estate training.
The short answer is no, you do not need a license to wholesale real estate in Florida.
The longer answer is that as long as you stay within the parameters of the license law you don’t need to have a license. The key is to always market the contract - not the property - when marketing your wholesaling opportunities.
With its internationally known theme parks, Orlando, Florida has become a key home to many looking for wholesale real estate. The market is competitive but there are opportunities to still be found in this market.
While the wholesaling process is virtually the same throughout the state, look to these prominent organizations in the local real estate market for some of the trends in the Orlando property scene.
With its booming population, South Florida is a hotbed for those moving and there are still opportunities to become a successful wholesaler in the region.
While the rules are similar to other parts of the state, there is still information that can be learned by reviewing the local Realtor boards.
A Realtor can absolutely wholesale properties in Florida. Licensed wholesalers even have advantages over non-agents when it comes to having access to distressed owners and properties.
In addition, a licensed realtor has the opportunity to market the property in traditional methods as a possible exit strategy if wholesaling doesn’t work out as intended.
Like everything in life that is worth doing, it isn’t easy to wholesale real estate in Florida. However, there are lots of ways to make it easier on yourself.
Hire a mentor, or coach, and complete the proper training like Real Estate Skills offers through the Pro Wholesaler VIP Program, the most comprehensive real estate wholesaling program available today.
While wholesaling real estate in Florida is not easy it can be a very lucrative business model if done right. Learning the skills to wholesale real estate virtually or at a local level can help you chart your own path to financial independence and gain time freedom.
When so many other real estate businesses require substantial start-up capital and have long sales cycles, for many, wholesaling real estate provides a perfect business model that is lean, quick, fun, and most important of all, profitable.
We hope this article has inspired you to take action to get out there and wholesale your first or next Florida property!
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