How To Wholesale Real Estate In Maine: Step By Step (2023)Apr 11, 2023
Real estate investing in Maine is a booming business and has the potential to be an incredibly lucrative opportunity for you. In fact, the housing market in Maine is cooling down currently, which means big opportunities for anyone looking to turn a handsome profit in the state.
The reason is that while home prices in Maine are slowly rising, sellers are more compelled to accept lower offers from buyers. This equates to getting a great price for a home, which can result in higher profits when you sell.
Although there are ample possibilities to generate an enviable income from the real estate market in Pine Tree State, your success is contingent upon how you leverage the market and how smart you play the game.
Many investors find that wholesaling properties is far more advantageous than other real estate transactions. With this in mind, here is a step-by-step guide about how to wholesale real estate in Maine to generate hefty active income today.
- What Is Wholesaling Real Estate?
- How To Wholesale Real Estate In Maine (9 Steps)
- Is Wholesaling Real Estate Legal In Maine?
- How Much Do Real Estate Wholesalers Make In Maine?
- Do You Need A License To Wholesale Real Estate In Maine?
- Is Wholesaling In Maine Easy?
- Final Thoughts On Wholesaling In Maine
What Is Wholesaling Real Estate?
Wholesale real estate is the process of buying and then selling real estate contracts. As a real estate wholesaler, you are a middleman and make money by purchasing properties from sellers as cheaply as possible and then selling them to a real estate investor at a higher price.
Wholesalers typically look for distressed properties or homes in foreclosure as owners of these homes are often motivated to sell cheaply and quickly. This form of doing business in real estate is quite appealing because it does not involve investing in repairs (like house flippers) - it only entails purchasing the contract and reselling it to interested parties for a profit.
How To Wholesale Real Estate In Maine (9 Steps)
Breaking into wholesaling houses in the state of Maine and making a profit is an attractive prospect. However, there are some learning curves for beginners. From building a buyers list to finding wholesale deals - here is our real estate step by step guide that will help you understand the nuances of successful wholesaling.
Be sure to check out our in-depth video showing you how to wholesale real estate step by step here:
With that in mind, here's our simple step by step process for wholesaling real estate in Maine:
- Partner With A Wholesale Mentor
- Learn Maine Real Estate Wholesaling Laws & Contracts
- Understand The Maine Real Estate Market & Lingo
- Build A Cash Buyers List
- Find Motivated Sellers & Distressed Properties
- Put Distressed Properties Under Contract
- Assign The Contract To Cash Buyer
- Close Deal And Collect Assignment Fee
- Double Close Or Wholetail When Necessary
1. Partner With A Wholesale Mentor
One of the best ways to get on the fast track of wholesale real estate is to find a professional who has “been there, done that.” Finding a realtor or a real estate veteran who has earned their stripes in this business is invaluable because he or she can teach you the ropes. Consequently, a mentor can help you avoid making costly or careless mistakes.
There are many ways you can find the ideal wholesale mentor. You can start online and check wholesale real estate meet-ups, chat groups, or discussion forums. Or, network with seasoned experts in real estate on social media and begin building a report. Eventually, you can ask if they might be interested in mentoring you.
You can also find mentors through your state and/or local real estate groups. For instance, the REIA (Real Estate Investors Association), or the Maine Association for Realtors, is a great place to seek out and communicate with a licensed real estate agent and other pros who have a finger on the pulse of the housing market in Maine. Bear in mind these organizations often require an annual membership fee.
Hiring a wholesale real estate coach or enrolling in an educational course for wholesaling might be another option for getting a leg-up on your wholesale enterprise. While these come at a cost, the information you gain might be worth it to avoid making costly mistakes when negotiating your first wholesale real estate contract.
2. Learn Maine Real Estate Wholesaling Laws & Contracts
While Maine does not require you to have a real estate license to wholesale properties, it does have its fair share of laws that you must abide by when conducting business. For example, new wholesalers in Maine need to understand that they can only market and sell the rights to a contract for a property with the owner. They cannot sell or market the physical property itself without a license.
Another point new wholesalers might overlook is the process of collecting assignment fees versus commissions. No commissions are collected on wholesale contract sales, but wholesalers can charge an assignment fee for their middleman services in buying and selling contracts.
Furthermore, you can broaden your understanding of Maine's real estate laws by consulting with the state of Maine Real Estate Commission. There you will find critical information about the current real estate law, legal notices, rulemaking changes, and much more.
Even more importantly, the state of Maine requires a real estate attorney for finalizing real estate closing deals. This means you cannot close a contract without an attorney, according to the real estate laws in Maine. This actually works in your favor. Why? Because it’s advisable to have an attorney on retainer anyway so that you can get legal advice when you need it.
Additionally, an attorney can help draw up contracts that legally comply with Maine state real estate laws, so you are protected from any costly snafus or setbacks in your real estate transactions.
3. Understand The Maine Real Estate Market & Lingo
Are you familiar with the meaning of terms like double closing, FSBO, or quitclaim deed? Do you understand the difference between an appraisal and appraised value? If not, then it’s time to brush up on your wholesale real estate vocabulary and lingo. When it comes to crushing your wholesale real estate game, the more you know, the more satisfactory your results will be. Arming and educating yourself on the lingo and terminology of the real estate industry is tantamount to success.
Moreover, it’s crucial to understand the real estate market in Maine before you proceed with any wholesale real estate deal. For instance, familiarize yourself with the average market value of homes in Maine. Educate yourself on different properties and how each can benefit your endeavors.
For example, learning about certain areas of Maine’s real estate market, such as foreclosures or rental property statistics, can give you invaluable insights and guide you in the right direction about which properties to target within the market.
Your best resource for brushing up on the real estate market and nomenclature is the Maine Association of Realtors. This is Maine’s biggest real estate association, and its goal is to educate, represent and inform individuals about all aspects of the real estate business in the state of Maine.
4. Build A Cash Buyers List
In order to succeed at wholesale real estate, you'll need a cash buyers list. This is a collection of names and contacts that are end buyers and potential investors. Building a buyers list is essential in keeping track of and communicating with individuals who are prime and ready to invest in the purchase contracts you have procured from homeowners and property sellers.
You want to find an investor who can close quickly, and they have enough money to buy without waiting on financing. In the most ideal scenario, this means a cash buyer. These people will readily have the necessary funds, eliminating any delays or obstacles that could threaten the deal.
In building your buyers list, there are a few options. You could go to local property auctions and converse with attendees who might have cash on hand. The fast-paced nature of property auctions means that these people will likely be cash buyers themselves, so it's your best bet.
You can also pay attention to roadside signs that say “We Pay Cash for Houses” (also known as bandit signs). Then call the number listed. Just make sure they aren’t other wholesalers looking for leads. Another option is to contact lenders and find out who is buying up properties, as these investors are your target for selling wholesale contracts.
Ideally, you should have a record of every potential buyer you've encountered through your marketing campaigns, website contacts, phone calls, and face-to-face meetings with real estate investors.
You can also check out this video on how to find cash buyers!
5. Find Motivated Sellers & Distressed Properties
The hard truth is that you can't expect to succeed in wholesale real estate without targeting motivated sellers. There are several ways to track down potential sellers
For example, you could implement what the industry calls “bandit signs.” These can be physical or digital signs with your phone number or website address. The downside of these is that you'll have to get permission to use these in certain areas, as you could potentially be fined for soliciting on private property.
Another way to attract motivated sellers of rental properties or owners of single-family homes compelled to sell is to try direct mail campaigns. This might seem old school, but homeowners who want to get out from under a money pit or distressed property - may be paying close attention to their mailbox for opportunities to sell.
You might also think about creating a website that talks about your services and skills. Make sure your site is optimized for search engines (known as SEO), which will help ensure that people who are looking for your services find you.
Implementing Facebook ads or Google Pay Per Click ads might also be an effective way to connect with motivated sellers. Yes, these ads cost money, but they've proven to be extremely effective in grabbing attention from potential buyers who are browsing Facebook or the internet.
Additionally, consider posting in online homeowner discussion forums and providing advice to forum members. Each time you leave a comment or help a member, leave your website or phone number within the comment. The more comments you give on these threads, the more chances you have to reach out to sellers who are looking for your services. Moreover, the more you engage in homeowner sites, the more likely you are to find incredible prospects such as identifying off-market properties or even no money-down opportunities.
Last but not least, you can subscribe to reputable MLS (multiple listing service) sites that provide lists of various homes for sale on the market. These sites should offer data on foreclosures and distressed homes. You can go a step further and enroll in a foreclosure site which may give you more details about foreclosures in Maine.
6. Put Distressed Properties Under Contract
After you’ve locked onto an ideal property, the next step is to place the property under contract. This entails calculating two different types of figures - the ARV and MAO before presenting an offer.
An ARV figure is the “After Repair Value.” It is the market value of a distressed property after all renovations or repairs are taken into account. ARV calculations are necessary to assess how much the home is potentially worth once the end buyer has put in the money to repair the home.
The MAO stands for “Maximum Allowable Offer,” and is the standard calculation used by real estate investors to assess their offering price on the property. This is an important figure to calculate and share with investors because it helps potential buyers understand the profit range they could earn from the purchase. You calculate MAO by taking the ARV, subtracting rehabilitation and fixed costs of the property, and then subtracting the target profit or equity. The amount you calculate will be your MAO.
After you have these essential figures in place, you can proceed with drawing up the contract. Make sure your attorney is involved in creating and finalizing the real estate contract to avoid breaking any laws. You also want to make sure your purchase agreement is legally binding for both the seller and the buyer. Include an assignment clause, which permits you, the wholesaler, to transfer the rights of purchase to the new buyer. You should also communicate with the title company, as they can help alert you if there are any claims on the title after purchase.
You might be tempted to download a template for a wholesale real estate contract. That’s fine, but do have an attorney preside over the contract to ensure it abides by the real estate laws of Maine (plus, it’s the law to conduct real estate transactions with an attorney in the state of Maine).
7. Assign The Contract To Cash Buyer
Now that you’ve done your due diligence, it’s time to assign the contract to a cash buyer. This entails creating an assignment of contract agreement, which should disclose your assignment fee, which is included in the end amount of the final agreement.
Your final contract should identify the full amount of money to be paid so that all parties involved clearly understand what is being paid. You should also detail the terms of payment in the final contract. Once again, make sure your real estate attorney has perused the assignment contract so that all details are in good order and legally binding.
8. Close The Deal And Collect Your Assignment Fee
Last, but not least, it’s time to collect your assignment fee. After the assignment contract is signed, the purchase agreement is then transferred to the buyer and upon completion of the contract, you should then receive your fee for services from the end buyer.
9. Double Close Or Wholetail When Necessary
Wholetailing is when you purchase a distressed property and make a few minor upgrades without fully repairing the property. Then, you market the property on the MLS and find another investor that will pay top dollar. This method gives the wholesaler more time and flexibility to find a new buyer who may even be able to get a mortgage on the property due to the repairs made. This could be considered a hybrid between a flip and a wholesale, as you are putting in your finances to get the home in a more appealing condition for the end buyer.
A double closing is when a real estate wholesaler makes two separate, concurrent transactions. An example is when a property is purchased outright and then sold to the end buyer. This is typically done on the same day. Wholesalers often prefer this transaction type because it typically supports a “buy low, sell high” scenario. The downside is that this type of real estate investing may require you to bring all of the funds to closing, including paying earnest money as an initial deposit. The wholesaler may be required to pay additional closing costs, which means more money is deducted from your gross profit.
There are a lot of details and nuances to wholetailing and double closing. As such, you should ensure you are fully organized, and go into these unique real estate transactions with all your ducks in a row. While these two strategies can be incredibly lucrative, they can also be tricky when profiting from your investment and earning your fees.
Is Wholesaling Real Estate Legal In Maine?
While wholesaling in Maine might sound too good to be true, rest assured, that it is entirely legal. As mentioned earlier, beginners who might not be familiar with the legalities involved with wholesaling should have a real estate attorney to ensure all the laws are followed.
For example, according to Title 32, Chapter. 114, Subchapter. 1: General Provisions, a wholesaler may only collect their fee for a particular assignment. They cannot, however, collect compensation for activities such as marketing a real estate property or negotiating the sale, purchase, or exchange of real estate. In other words, you may collect your finders fee as a wholesaler, but you may not accept compensation for actions taken on the real estate property itself.
The state of Maine reinforces this law by citing that a real estate license is required whenever one is engaging in real estate brokerage activities. To clarify, it is unlawful for a wholesaler to commit to real estate transactions on the property itself without a real estate license or a brokerage agency license under Title 32 of Maine’s Real Estate Brokerage License Act.
Missed details or missteps could lead to illegal transactions, but wholesaling real estate in Maine is a flourishing practice and wholly legal.
How Much Do Real Estate Wholesalers Make In Maine?
If you’re wondering if you can make a living as a real estate wholesaler in the state of Maine, the answer is yes. The truth of the matter is, your potential to earn money wholesaling is contingent upon how much effort you put into your wholesaling endeavors, and how well your plan.
That said, the sky is the limit with wholesale real estate. If you close one deal per month at a $10,000 profit, you’re easily looking at a six-figure annual net income.
Do You Need A License To Wholesale Real Estate In Maine?
The short answer is, no - you do not need a license to be a wholesaler of real estate in the state of Main. Nevertheless, you might find a real estate license an asset because it provides the foundation that could be essential to your endeavors.
Also, many individuals opt to get a license to make transactions go more smoothly, such as the case of selling properties directly while having them under an assignment contract.
Is Wholesaling In Maine Easy?
Wholesaling in Maine isn’t a walk in the park. It takes time, research, investment, and patience. It also takes savvy and perseverance.
While conducting wholesale real estate transactions in the state of Maine isn’t always easy, you can get ahead of your game by partnering with a mentor or a coach which can significantly reduce your learning curve.
You might also consider getting expert training that equips you with the knowledge of real estate investing and tools to accomplish your wholesaling goals.
Therefore, you should set yourself up for success by utilizing the Pro Wholesaler VIP Program which gives you the resources and training you need to help you realize your vision of mastering the real estate wholesale business.
The Pro Wholesaler VIP Program is designed for the modern entrepreneur to master the fundamentals and avoid the pitfalls typically found by beginners. It is 100% online and is used for local and virtual real estate wholesaling.
Final Thoughts On Wholesaling In Maine
The Pine Tree State presents a bevy of brilliant opportunities for anyone who craves work for themselves in the real estate industry. Moreover, wholesaling requires little-to-no startup cash, which means this could be a fabulous opportunity to start a viable living for yourself and your family.
Additionally, wholesaling is far more appetizing (and less work) than earning in other areas of real estate, such as becoming an agent, home buying, or flipping houses.
That said, there are factors involved that can thwart your efforts in landing your first wholesale real estate contract. That’s why it’s important to seek the wisdom of a mentor or coach to help you find wholesale success. Having an experienced ally on your side who can show you the ins and outs of the business will give you the advantage you need to excel in this satisfying and potentially lucrative industry.
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.