How To Wholesale Real Estate In Georgia: Step-By-Step (2024)Jan 16, 2024
When you think of real estate investing, the first thing that often comes to mind is flipping houses. But wholesaling is a type of real estate investing that differs from buying flips or rental property because a wholesaler doesn’t actually close on the property and take possession. Instead, they work with a second investor and assign them their rights and obligations under the contract. That end buyer then closes, pays the purchase price, and takes possession.
Because it requires less upfront capital, wholesaling is often looked at as a great way for beginners to get into real estate. Wholesaling is widely known as one of the top short-term investment strategies out there.
Whether you’re based in Atlanta, Georgia, or some other metro of the Peach State, read on to learn more about how wholesaling could fit into your real estate investment business strategy.
With this ultimate guide, we’ll show you how to wholesale real estate in Georgia using our proven step-by-step wholesaling process. Let’s get started!
- What Is Wholesaling Real Estate?
- How To Wholesale Real Estate In Georgia (9 Steps)
- Is Wholesaling Real Estate Legal In Georgia?
- How Much Do Real Estate Wholesalers Make In Georgia?
- Do You Need A Real Estate License To Wholesale In Georgia?
- What Are The Requirements To Wholesale Real Estate in Georgia?
- Is It Illegal To Wholesale In Atlanta?
- Is Wholesaling In Georgia Easy?
- Final Thoughts On Wholesaling In Georgia
*Before we begin our guide on wholesaling real estate in Georgia, we invite you to view our video on How To Wholesale Real Estate Step by Step (IN 21 DAYS OR LESS)! Host and CEO of Real Estate Skills, Alex Martinez, provides a comprehensive, step-by-step guide for beginners to start wholesaling real estate!
What Is Wholesaling Real Estate?
While there are some similarities to traditional real estate investment, there are a number of crucial differences that set wholesaling real estate apart. The wholesaler begins by searching for distressed properties with motivated sellers. As with other types of real estate investing, the wholesaler assesses the property’s value to settle on an offer price that will allow a profit and goes under contract.
Homes that end up being wholesaled are usually marked by financial or family burdens that have put the homeowner in the position of wanting a quick sale without reservations about allowing someone else to profit from the sale of the home they own. Often, these homes are close to entering foreclosure. The homeowner does not want to deal with making updates or repairs. By wholesaling their home, the homeowner has found a solution to their financial challenges. The wholesaler becomes the problem solver, which motivates the homeowner to sell.
However, the wholesaler doesn’t close on the contract and take possession. While they may include an earnest payment with the offer, the wholesaler does not ultimately pay the purchase price. Instead, the contract’s terms spell out that the wholesaler may assign their rights and obligations to the contract. It is this third party, the end buyer, who becomes obligated to close on the property and pay the contracted purchase price. The wholesaler may keep any profit they create in the process.
The fact that the wholesaler doesn’t pay the purchase price and instead assigns all their rights and obligations under the contract to a cash buyer is the primary difference that sets wholesaling apart from other types of real estate deals.
*Before we continue our guide, be sure to watch our video on the 10 BEST States To Wholesale Real Estate! Learn why Georgia made our top 10 list!
Covering the entire span of the country, we delve into what sets each of these states apart, creating a perfect environment for both wholesalers and real estate investors.
Want more real estate videos? Be sure to visit our YouTube channel, here!
How To Wholesale Real Estate In Georgia (9 Steps)
If you’re thinking about starting a wholesale real estate business in Georgia, consider developing a process for wholesaling before you launch your business. Wholesalers who are able to develop a process they follow with each transaction often find the success of their business is accelerated. With that in mind, here are nine steps to consider as you get your real estate wholesaling business underway in Georgia.
Here's our simple step-by-step process for wholesaling real estate in Georgia:
- Partner With A Wholesale Mentor
- Learn Georgia Real Estate Wholesaling Laws & Contracts
- Understand The Georgia Real Estate Market & Lingo
- Build A Cash Buyers List
- Find Motivated Sellers & Distressed Properties
- Put Distressed Properties Under Contract
- Assign The Contract To The Cash Buyer
- Close Deal And Collect Assignment Fee
- Double Close Or Wholetail When Necessary
1. Partner With A Wholesale Mentor
A great first step to take while creating your wholesaling business is to engage a more experienced real estate wholesaler as your mentor. Offer a percentage of your profits or a flat fee. Consider it an investment in your company’s success.
In fact, a wholesale mentor is a good first step to take, even if you aren’t new to real estate investing. Flipping houses, for example, is a much different process from wholesaling. Enlisting the help of an experienced real estate wholesaler during the start of your business can put it on the fast track to becoming an established, profitable business. The added bonus? Having more confidence about the transaction process will free you to focus on identifying motivated sellers and establishing relationships with cash buyers.
2. Learn Georgia Real Estate Wholesaling Laws & Contracts
Before you start wholesaling in Georgia, you’ll want to be sure you’re knowledgeable about any state laws that might impact your real estate investment business in general and wholesaling, specifically. Running afoul of Georgia real estate law is one of the quickest ways to derail your business.
The Georgia Real Estate Commission (GREC) administers real estate laws and real estate licensing in the state of Georgia. While there are no Georgia laws that address real estate wholesaling directly, you will still need to familiarize yourself with its real estate laws. For example, unless you are a licensed real estate professional, you need to be sure you market your rights under the contract and not the investment property itself.
You don’t want to act in the role of a real estate broker. You also need to be aware that Georgia requires an attorney to be involved in the entire closing process. This differs from many states where an attorney only needs to be in attendance at the closing table or to draw up the documents—or doesn’t need to be involved in the closing at all.
You will also want to be sure you understand Georgia real estate law as it applies to the disclosure of your profit from a transaction. The amount of your assignment fee must be disclosed to all parties who are a part of the transaction. The exception is a double close or buy-and-sell situation when wholesalers are not required to disclose their profit.
Disclosure of the property’s condition is required regardless of whether you are wholesaling or double closing.
3. Understand The Georgia Real Estate Market & Lingo
If you’re new to the Georgia real estate industry, you will need to build your local network of agents, brokers, and investors for wholesale deals. If you can build a strong relationship with a real estate agent or broker, they can help you to expand your network of qualified investors. These real estate professionals are also great resources for understanding the local real estate market trends, past and present, and even the localized real estate jargon.
Get familiar with the Georgia Association of Realtors (GAR), which is the predominant real estate professional organization in Georgia. With over 51,000 members strong, it is the largest trade organization in the state.
Be sure to compensate agents who provide you with their time and access to market resources. Consider it an investment in your business.
4. Build A Cash Buyers List
If you are already under contract but don’t have some prospective end buyers lined up, you run the risk of having to close on the property because you can’t get it assigned in time.
Build your cash buyer’s list first, before lining up properties, and make note of buyer preferences. Once you think you’ve got a property you want to wholesale, run it past a few cash buyers to gauge interest before going forward.
If you need a fast and free strategy to build your cash buyers list, check out our short video:
5. Find Motivated Sellers & Distressed Properties
Review the preferences of your investors as you set out to find motivated property owners. There are several ways to find potentially distressed properties, including the local Multiple Listing Service (MLS), lists of foreclosures and pre-foreclosures, wholesaling postcard campaigns, your network of agents and brokers, and even driving through neighborhoods.
Be prepared to explain how wholesaling works as a real estate investment strategy when you reach out to sellers. You can usually avoid objections if you are able to reassure the seller they are guaranteed to close on time, through a cash purchase per the contract terms.
Read Also: How To Find Off-Market Properties In Georgia (4 Methods)
6. Put Distressed Properties Under Contract
After you’ve identified a potential property, your next step will be to complete your due diligence to determine the home’s market value and decide whether it is suitable for wholesaling. You can review sales of comparable properties to help calculate the home’s after-repair value (ARV).
Once you have determined the ARV, you will be able to use it to calculate the maximum allowable offer or MAO. It is determined by subtracting fixed costs and costs for rehab from the ARV. Then, deduct a profit for the investor as well as your own anticipated assignment fee. The MAO formula will tell you the approximate price an investor is likely to pay, helping you to better pinpoint an appropriate offer price.
In addition to determining an appropriate contract price that will work for an end buyer while also providing you with a profit, you’ll want to be sure the terms of the contract allow you to wholesale the property without further consent from the seller. If you don’t get this at the time you go under contract, you’ll need to get the seller’s consent before closing, which can muddy the waters unnecessarily.
7. Assign The Contract To Cash Buyer
The assignment of contract involves more than just finding a willing end buyer. Ideally, you will have a cash buyer lined up so you can quickly assign the contract. But before doing so, you want to ensure you include your wholesale fee in the agreement’s terms.
In addition, include a copy of the property condition disclosure and an accurate description of exactly what the investor is receiving through the assignment, including both rights as well as obligations, such as closing costs. Spell out any liabilities in the agreement, should the deal not go through.
8. Close Deal And Collect Assignment Fee
After you’ve successfully assigned the contract to a cash buyer, it will be time to close on the property. If you have not received it yet, this is when you will typically collect your assignment fee.
The end buyer can pay the wholesale fee directly to the wholesaler, or the funds may be transferred through the closing attorney. Make sure to stay available to all parties to ensure the deal closes smoothly and without any delays.
9. Double Close Or Wholetail When Necessary
One of the hallmarks of wholesaling a real estate contract is the wholesaler’s ability to avoid having to close on the property, pay the purchase price and take possession of the property. Instead, the contract allows for the wholesaler to assign rights under the contract to another cash buyer. Because of this, wholesaling is often identified as one of the best ways to get a start in real estate investing, since extensive upfront capital is typically not necessary.
But this isn’t always the scenario. Sometimes, a wholesaler opts for a double closing. This real estate strategy happens when both real estate transactions occur at the same time. Just as with traditional wholesaling, the transactions still involve three parties: the wholesaler, the seller, and the end buyer of the property.
A wholesaler who opts for a double close usually does so because of a desire to conceal what they are making off the transaction. But it can also be helpful in eliminating some of the challenges that can pop up between the seller and cash buyer because both will be working with the wholesaler rather than each other.
Here’s how it works: As the wholesaler, you would first go under contract for purchasing a home from the seller at a discounted price. Since you are indicating you are a cash buyer on the offer, you can expect to minimize your cash outlay for the earnest money and completely avoid a down payment.
Once under contract, you would then enter into a second agreement to sell the property to an end buyer. Working with the title company, you will want the closings to occur very closely together. This would enable the title company to receive the end buyer’s funds, then use them to close out the original purchase transaction, omitting the need for the wholesaler to come up with their own cash to close the deal. Any profits between the second contract and the original purchase price go to the wholesaler.
Should the title company refer to handle the transactions in this way, you can pursue short-term financing, transactional funding, or take out a hard money loan to complete the purchase. This is a reason to include hard money lenders in your real estate network.
Another option that differs from the typical wholesaling process is called wholetailing. With this strategy, the wholesaler closes on the property and then lists it on the local MLS to sell to an investor on the “retail” or open market. Doing so can allow a wholesaler to command a higher price because of additional exposure and also provide an opportunity to find a high-paying, potentially financed buyer.
Is Wholesaling Real Estate Legal In Georgia?
Yes, real estate wholesaling is legal in Georgia. Prior to launching your real estate investment company, it’s important to have a good understanding of what laws in Georgia may apply to your business.
If you aren’t a licensed real estate professional in Georgia, you must avoid marketing the property itself to a cash buyer when wholesaling. Instead, you will need to make it clear you are marketing the assignment of the contract, with all the obligations and benefits that go along with it.
It is not unusual for state laws to require that a real estate attorney be involved in the closing. In the case of Georgia laws, an attorney must be involved in the entire process, from start to finish. This differs from states where an attorney is only required to draw up documents or other states where no attorney is required at all.
Although normally you will need to disclose your fee in a real estate transaction, your profit from a transaction does not have to be disclosed in the event of a double close or buy and sell situation. You are, however, required to provide a disclosure of the property’s condition, whether wholesaling or double closing.
How Much Do Real Estate Wholesalers Make In Georgia?
At this point, you may be wondering how much income you stand to make with a Georgia wholesale business. Although they are two separate real estate investment strategies, a wholesaler can expect to earn about the same income as a flipper. In other words, there’s really no limit to how much you can make. You can increase your chances of reaching your full income potential, however, by establishing a process for every transaction and a system for consistently locating motivated sellers with distressed properties.
If you’re looking for a benchmark, the average wholesaling assignment fee is about $10,000 per transaction, so it doesn’t take too many transactions a year to earn a decent living from wholesaling. A novice can expect to close about five transactions in their first year, while experienced wholesalers are going to close about 5 to 10 transactions a year, accumulating about $240,000 to $600,000 annually. The key to attaining this kind of result is to develop a system and stick with it. Wholesaling also has the advantage of steady cash flow since money is not tied up in properties.
Do You Need A Real Estate License To Wholesale In Georgia?
A license is not required to wholesale properties in Georgia. However, if you are not a licensed Realtor, you must apply a different set of rules to complete wholesale transactions. Without a license, you can only market the rights to assign a contract you have for the property. You can’t market the property itself.
Also, without a license, you collect a fee when assigning the contract. If you have a real estate license, you will receive a commission when the property closes.
With the double close or buy and sell method, you are negotiating and completing two separate transactions independent of each other. As such, you can negotiate the best possible prices when you buy and sell the property and are not required to disclose the amount of profit you’ll make by flipping the property. Many wholesalers prefer this degree of privacy.
Learn more about what it takes to get a Georgia real estate license.
What Are The Requirements For Wholesale Real Estate in Georgia?
If you’re going to operate a wholesale real estate business in Georgia, you’ll need to equip yourself with the right tools to be successful. A surprising amount of business is done via mobile devices in real estate, so be sure you have a smartphone you’re comfortable with. You may also find it useful to have an iPad or other full-functioning tablet.
In addition to a computer and Internet access, you may want to consider investing in some additional real estate wholesaling tools. One of the most useful types for wholesalers would be some kind of customer relationship management (CRM) app. Additional apps that wholesalers typically find useful are marketing tools, deal calculator spreadsheet software, comping software, contract management and e-signature apps.
Read Also: 7 Best CRM For Real Estate Wholesalers
Is It Illegal To Wholesale In Atlanta?
Atlanta does not have any specific statutes, ordinances, or laws of any type that would prohibit you from operating a wholesale real estate business there. While the Atlanta real estate market holds a lot of opportunity for wholesaling due to the size of its metro area, that large size also means you will face more competition from other real estate investors.
Just as you would in any part of Georgia, you will need to market your rights to the contract and not the property itself. This will keep you from acting as a brokerage when you are unlicensed.
Is Wholesaling In Georgia Easy?
Wholesaling in Georgia isn’t easy. But there are things you can do to increase your chances of success with this kind of real estate investing.
If you prepare by learning about the local real estate market, and build your network of investors, you stand a better chance of finding success early on. Consider enlisting the help of a coach or mentor, and take advantage of property training like Real Estate Skills offers in the Pro Wholesaler VIP Program.
The Pro Wholesaler VIP Program is designed for the modern entrepreneur to learn the basics and the easy potholes to spot and avoid. It is 100% online and is used for local and virtual real estate wholesaling.
But don't just take our word for it. View our in-depth interview and learn how Jeff, from Atlanta, Georgia, got his first deal in 3 weeks using the Pro Wholesaler System and made a quick $5,000 wholesale fee! You can also capitalize on the Georgia real estate market using our proven wholesaling strategies.
Final Thoughts On Wholesaling In Georgia
Real estate wholesaling is a popular choice for investors looking for an investment strategy that doesn’t require a lot of capital to launch. At the same time, wholesaling real estate is a business that can be grown to provide a comfortable living. Before getting a start in wholesaling in Georgia, your first step should be to familiarize yourself with the local real estate market where you plan to operate.
To get your business off to a good start, consider making an investment in a mentor’s help so you can get some guidance as you go through your first few transactions. As you do so, establish a process that you can follow repeatedly. Doing so will help you to establish your specific route to success in wholesaling.
Check out our brand new FREE training on how we help investors all across the country wholesale and flip houses from the MLS using only a laptop and a cell phone. See you there!