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How To Wholesale Real Estate In Massachusetts: Step By Step (2022)

Over the years, the population in Massachusetts has increased tremendously.

Since 2010, the population has grown by roughly 7.4% to just over 7 million unique citizens. And inevitably, with a massive population surge comes a massive desire for housing and overall living needs.

However, there’s a catch.

Although the population has grown by 7.4%, the housing units have only grown by 6.8%. And, basic economic principles state that when demand outpaces supply, there will be an increase in price to compensate for the heavily desired asset.

This is called "Price Elasticity" and, that is exactly what has happened.

Due to this massive surge in demand, the price of houses in the state of Massachusetts has done nothing but increase.

So where does that leave you, the aspiring investor? How can you get involved in the action with limited capital or experience?

Is it even too late to dive into the real estate market?

Absolutely not! The opportunities exist on a grand scale - especially in wholesaling real estate.

Wholesaling real estate is a fantastic way to increase your net worth by participating in the Massachusetts real estate booming market. Plenty of people have found great success wholesaling real estate and it’s not too late to get involved.

In this article, we’ll explain how to wholesale real estate in Massachusetts and how to do it successfully.

                                                                      

What Is Wholesaling Real Estate?

Wholesaling real estate is the act of connecting buyers and sellers on a property in exchange for a fee. Although it sounds like brokering, it differs in that wholesaling involves selling the right to a purchase contract rather than the actual property itself.

Here is how it works:

You, the wholesaler, reach out to a distressed seller looking to sell their real estate investment or home for cheap. Then, you go under contract with the homeowner. After that, you reach out to an investor on your cash buyer list who can close on the loan with a hard money loan or cash on hand.

You subsequently assign the purchase contract over to the end buyer in exchange for a fee. And that’s it! You’ve just managed to wholesale a property.

We’ll go into more detail on how to wholesale real estate step by step in the next section.

Wholesaling is a great way to make money - either as a full-time job or as a side hustle.

                                                                      

How To Wholesale Real Estate In Massachusetts (9 Steps)

how to wholesale real estate in Massachusetts step by step

Here's our simple step by step process for wholesaling real estate in Massachusetts:

  1. Partner With A Wholesale Mentor
  2. Learn Massachusetts Real Estate Wholesaling Laws & Contracts
  3. Understand The Massachusetts Real Estate Market & Lingo
  4. Build A Cash Buyers List
  5. Find Motivated Sellers & Distressed Properties
  6. Put Distressed Properties Under Contract
  7. Assign The Contract To Cash Buyer
  8. Close Deal And Collect Assignment Fee
  9. Double Close Or Wholetail When Necessary

Step 1: Partner With a Wholesale Mentor

Mentors and coaches are essential to the wholesale process. They have loads of experience and a network that can springboard your journey as a successful wholesale investor.

Wholesale mentors will help guide you through the ins and outs of the traditional experience and ensure you make the right moves the whole way through.

So, how do you find a mentor?

Go on real estate blogs, websites, Facebook groups, and podcasts. Reach out to professionals on LinkedIn and Twitter. You’d be surprised to see how many individuals would be delighted to help you kickstart your journey.

Speak to successful wholesale entrepreneurs and tell them you are new to the Massachusetts market. Mentors will handhold you through the process and ensure you have the right strategy, go to the right market, and spend the right amount of money on a wholesale deal.

Then, once you’ve completed a few transactions, flip right around and pay it forward by mentoring someone else.

Step 2: Learn Massachusetts Real Estate Wholesaling Laws & Contracts

Next, you’ll want to learn the essentials related to the laws, contracts, and regulations surrounding wholesaling in Massachusetts.

Each state has a different set of rules surrounding what a traditional real estate, fix and flip, and a wholesale investor can and cannot do.

For instance, in Massachusetts, every transaction that includes any form of transfer of real property with cash or financing - whether the bank or hard money - needs to include a registered Massachusetts legal professional.

That means you’ll need to hire an attorney that can assist you in your closings.

Speak to brokers and realtors in the industry. Usually, realty companies and brokerage firms have a list of contacts they can share with you whom they trust and rely on.

Next, you’ll need to understand the details surrounding a Massachusetts Standard Residential Purchase and Sale Agreement.

Wholesaling real estate is assigning a purchase and sale agreement to an interested end-buyer. Understand the contract and all its details. It’ll come in handy when negotiating the assignment fee with the cash buyer you engage with.

In Massachusetts, the laws surrounding wholesale investing are slightly opaque. What you’ll want to do is get a good grasp of what is considered a real estate transaction and the requirements therein.

Take a look at the RE08RC12: Massachusetts Real Estate License Law and Regulations. We’ll speak about the requirements surrounding a real estate license in more detail a bit later in the article, but for now, it’s important to know that there are many types of situations that could impact a wholesale transaction that you should be aware of.

For instance, did you know that if you are a licensed auctioneer you don’t need to have a real estate license? Or, if you want to be a property manager you also won’t need a license.

If you’d like to learn more about the laws surrounding different asset classes, you might also want to check these resources below:

Familiarize yourself with these laws and regulations. As a wholesaler - whether full-time or part-time - you’ll want to ensure your interests are protected and that you are always acting within the confines of the law.

Step 3: Understand The Massachusetts Real Estate Market & Lingo

So, you’ve familiarized yourself with Massachusetts laws and contracts - now what?

It’s time to dive deep into the market and understand the right language, terminology, and lingo that investors, homeowners, and home buyers are using. 

As mentioned earlier, the best place to start your search is with a trusted mentor. Mentors have already done most of the leg work so they should be able to guide you in the right direction.

But, what if you want to do a bit more research on your own?

You’ll want to head over to the Massachusetts Association of Realtors. Over there you’ll find a tremendous amount of resources - all related to the Massachusetts market and submarkets.

You can also head over to the Massachusetts government site and toggle around with the large array of atlases surrounding the mapping, transaction history, and tax structures needed to undertake a real estate job.

Another tool would be simply walking the main streets of the towns. Check out Boston, Salem, or Cambridge. Figure out where people like to eat, hang out, and live.

There is no real replacement for physically surveying the streets, smelling the aromas of the shops and restaurants, and of course speaking to the locals.

Step 4: Build A Cash Buyers List

Cash buyers are individuals you’ll want to know and love. They are the investors who are going to ultimately purchase the purchase and sale contract off of you. They are the source of your pride and glory as a wholesale investor.

Talk to your mentor and search Facebook groups. You can also try cold calling and sending postcards if necessary.

Get yourself a large list of reliable individuals who can close on an assignment quickly, effortlessly, and with adequate liquidity.

Cash buyers can typically close on a transaction within a couple of days or weeks. They have the requisite amount of proceeds needed to dive into a property and assume the contract for you.

Network at events and build your cash buyer list. They are going to be essential for this wholesale journey.

Check out this video about how to find and talk to cash buyers!

Step 5: Find Motivated Sellers & Distressed Properties

You can be an efficient and knowledgeable wholesaler, but your ability to profit will entirely depend on the types of deals you are able to source.

Every wholesaler needs to know what a motivated seller and distressed properties are. They go hand-in-hand and can make or break a wholesaler's profit capabilities.

Let’s start with a motivated seller.

A motivated seller is a homeowner that has an asset they want to dispose of quickly. Perhaps they have inherited the property from a relative or are in a cash crunch and need the money.

These individuals are willing to forgo profits and circumvent the typical red tape associated with a real estate deal (think broker fees, inspection costs, large legal bills) in exchange for a good, plain and simple, cash offer.

Connect with these motivated sellers. Keep them in the back of your mind at all times. When the opportunity is right and you notice they need a lifeline or a quick close-pounce.

So what about a distressed property?

A distressed property is a property that is in less than ideal condition. It can be a property that has been destroyed by a fire, a bad tenant, or a bad storm. Or, it could also be a bank-owned property that is being sold in a foreclosure auction.

Keep an eye out for these types of deals. And most importantly, know the laws about making offers on these properties.

For instance, there are very specific laws associated with state-owned property auctions. Familiarize yourself with these ordinances so you always stay ahead of the game.


Read Also: Finding Motivated Seller Leads: Free & Paid Tactics


Step 6: Put Distressed Properties Under Contract

Once you’ve identified the right distressed properties and have contacted the motivated sellers, it’s time to put the distressed properties under contract.

As mentioned earlier, given that Massachusetts requires a lawyer to work through any real estate transaction, you’ll need to work with an attorney to get the property under contract.

Once you negotiate the specifics with the seller, you’ll want to have the attorney draft up a purchase and sale agreement and fine-tune the details. After that, get ready to draft an assignment of contract to flip over to your cash buyer.

But, how do you figure out the right price to pay the motivated seller?

It’s simple. All you have to do is calculate the Maximum Allowable Offer - or the MAO Formula.

1. Calculate the ARV or the After Repair Value.

You can do this by walking the surrounding streets and finding out what similar properties have recently sold for. You can also reach out to mortgage brokers, realtors, and lawyers for more information regarding market comps.

2. Estimate the rehab costs needed to bring the property back from a state of distress.

The best way to do this is to go to Home Depot or Lowe’s and see what kind of building products you’ll need to run the fix and flip. Talk to general contractors as well. They can be a great resource to quote out rehab costs.

3. Input the desired profit you think a fix and flip investor would want.

You can ask a cash buyer for their ideal profit number. Ideally, fix and flip investors would like to make at least a 20% profit margin. There is no true number so this one is likely up to your sole discretion to determine.

4. Calculate your desired wholesale fee.

You’ll need to bake in your wholesale fee to ensure you secure a profit for facilitating the overall transaction. $5,000 - $15,000 should do, but you can always adjust that up or down depending on the time spent and the size of the transaction.

5. Plug and play.

Use the following equation and make an offer for a bit less than the MAO to secure a solid profit:

MAO = After Repair Value (ARV) – Renovation Costs – Desired Profit – Wholesale Fee

Step 7: Assign The Contract To Cash Buyer

Once you enter into a purchase agreement with the homeowner, you’ll want to draft an assignment contract to hand over the purchase agreement to your cash buyer.

Be careful with this one.

You’ll want a lawyer to look over the contract because it is the crux of the wholesaling process. You’ll want to make sure all your interests are being met and your liabilities are in check. You definitely don’t want to get to the closing table and find yourself in an unfortunate crunch because your assignment contract wasn’t rock solid.

Take a look at our downloadable PDF wholesale contract template. It’s a great starting point when drafting your Massachusetts-specific contract.


Download Free Wholesale Real Estate Contracts Here (PDF)


Step 8: Close Deal And Collect Assignment Fee

Once you’ve got the purchase contract signed and the assignment contract executed you are ready to close. Make sure you are in touch with all lawyers, closing agents, banks, and title companies throughout the process. There shouldn’t be any issues that emerge, but if they do you’ll want to be prepared to jump in if necessary.

Once the deal closes you get your assignment fee and voila - you’ve just closed on your first wholesale deal in Massachusetts!

Congrats - you are now a successful Massachusetts wholesaler!

Step 9: Double Close Or Wholetail When Necessary

As a wholesaler, it is important to be flexible in the way in which you close your deals.

Typically, you shouldn’t encounter too many difficulties wholesaling properties, however, there are situations that can arise that’ll require a bit of flexibility. For instance, you might encounter a scenario where you’d like to perform a double closing. This means you’ll close on the property yourself, only to immediately resell it to your cash buyer.

In an ideal scenario, you’d present both contracts to the title company and orchestrate a simultaneous closing. Sometimes, you’ll actually be able to use the funds from your sale to the cash buyer to actually purchase the property from the initial homeowner.

However, title companies don’t always allow that. Since funds would have to be transferred to you before an asset is actually in your possession, you might encounter some pushback from third-party mortgage recording agents, title insurance members, and lenders.

One way to avoid this is by forgoing traditional bank financing and using a transactional lender instead. These lenders provide funding to take advantage of quick wholesale transactions that need to close within a few hours or days.

Another flexible type of wholesaling is wholetailing. Instead of flipping the purchase agreement over to the end-buyer right away, you actually take ownership of the property, do some light, yet high ROI renovation work, and then list the property on the MLS to sell on the open market.

This way, you take ownership of the property, do some minor repairs to make the property show much better and potentially qualify for financing, then sell the property to another investor who completes the rest of the rehab. Ideally, you’ll be able to sell to a mortgaged buyer who is able to pay more - maximizing your wholesale profits.


Read Also: Wholesaling Real Estate For Beginners


                                                                      

Is Wholesaling Real Estate Legal In Massachusetts?

how to wholesale real estate in Massachusetts legally

Yes, absolutely! Wholesaling in the great state of Massachusetts is legal and does not require getting a license.

That being said, it might be beneficial to get a broker's license before you spend time, money, and effort flipping contracts and starting your wholesaling business

In Massachusetts, anyone who engages in the following activities would require a license:

  •  Selling real estate
  •  Leasing real estate
  •  Negotiating pricing in real estate
  •  Advertising or marketing real estate

Additionally, anyone whose primary business is engaging - either directly or indirectly - in the sale or negotiation of real estate would also need a license. (See MA General Law - Part I, Title XVI, Chapter 112, Section 87RR for more details).

So, although wholesaling seems similar to real estate brokerage in that you negotiate pricing and receive a commission, it is not the same. Wholesaling is the act of flipping or assigning a contract and negotiating the details of that transaction. It is not the negotiation of a particular asset or property.

But, it still might be a good idea to get a license.

As a broker, you’ll have access to websites, contacts, and a network of potential buyers and sellers. By getting your license, you can only up your chances of success.

                                                                      

How Much Do Real Estate Wholesalers Make In Massachusetts?

There is no fixed amount wholesalers make. A wholesaler’s salary truly depends on the type of properties you find, the eagerness of the cash buyer, and the distressed nature of the asset.

If you find a property with an After Repair Value of $250,000 selling for only $75,000 that only needs about $30,000 in repairs, you can really upcharge your wholesale fee significantly.

Think of it this way - a cash buyer could make well over $100,000 on a fix and flip with that type of cost basis. That type of return on investment is unparalleled. It makes no difference to them if they pay you $25,000 for the wholesale rather than the typical $10,000. Since they make a handsome amount of profit either way, they’d be happy to pay your higher-than-normal fee.

If you manage to sell 1-2 houses a month with a handful of duplexes and triplexes along the way, you could make upwards of $200,000 annually.

It’ll take a lot of grit and determination, but it is most definitely doable.

                                                                      

Do You Need A License To Wholesale Real Estate In Massachusetts?

No, you do not need a license to wholesale real estate. But, as mentioned earlier, it might be a good idea.

how to wholesale real estate in Massachusetts without a license

Getting a real estate agent license means you’ll have access to broader networks, the MLS, and other resources, websites, and mentors that you might not have had otherwise.

Take the coursework to get certified in Massachusetts. It is definitely worth your while even though you don’t explicitly need it to flip contracts and collect wholesale fees.

                                                                      

Is Wholesaling In Massachusetts Easy?

No, but it can be easier with a coach, a mentor, and the proper training.

You won’t be making $150,000 wholesaling real estate overnight. But, with the right mentorship and coursework, you can become a top performer in the Massachusetts area in no time.

Check out the Real Estate Skills Pro Wholesaler VIP Program. It is a fully immersive, world-class program that’ll help you get on your feet and guide you to your first successful transaction, without spending a dollar in marketing.

Best Wholesale Real Estate Course Virtual Wholesaling

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.

                                                                      

Final Thoughts On Wholesaling In Massachusetts

There is a reason why Massachusetts has grown to over 7,000,000 people over the past ten years. Not only does the state have historical significance, but it is also an enjoyable place to live with many opportunities for wealth creation.

There is a great need for real estate investors and a large desire for housing units. As mentioned, with large demand and a finite supply comes price appreciation and opportunity. Take the necessary steps outlined in this article and begin your wholesale journey.

Buy investment properties, flip rental properties, and wholesale properties. Check the streets of Boston and get an idea of what the market value is for different-sized homes.

Talk to a real estate broker or licensed agent and ask around for some legal advice to help springboard your wholesale business. Familiarize yourself with real estate law and cultivate an exit strategy for how you’d like to escape the traditional 9-5 with a successful wholesale business.

It won’t be easy at first, but with the right tools, mentors, training, and determination, you’ll be wholesaling houses left and right in a blink of an eye.

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.

Pro Wholesaler Program Free Training

It’s your time. Get to it!

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