How To Wholesale Real Estate In Minnesota: Step-By-Step (2024)

Minnesota boasts an intriguing mix of top-quality outdoors and urban amenities. Residents enjoy diverse cuisine, an impressive educational system, a healthy economy, and incredible entertainment year-round. So, it's no wonder that the state is anticipating a population growth of one million plus people in the next few years, with Minneapolis being one of the biggest growing cities in the state. This is good news for anyone looking to take advantage of real estate deals and opportunities in the Land of 10,000 Lakes.

With recent interest rate hikes, Minnesota’s real estate market is cooling down in the state, which could equate to potential profits in real estate investing, but the market is still fluctuating, and there are still risks. Consequently, real estate wholesaling can be a far less risky and more lucrative enterprise than traditional real estate investing. Read further about the benefits of wholesaling properties and learn how you can earn an enviable income wholesaling homes and properties in Minnesota.

• What Is Wholesaling Real Estate?
• How To Wholesale Real Estate In Minnesota (9 Steps)
• Is Wholesaling Real Estate Legal In Minnesota?
• How Much Do Real Estate Wholesalers Make In Minnesota?
• Do You Need A License To Wholesale In Minnesota?
• Is Wholesaling In Minnesota Easy?
• Final Thoughts On Wholesaling In Minnesota

What Is Wholesaling Real Estate?

Wholesaling real estate is a good strategy for people who want a short-term investment with a quick return. At its most basic, wholesaling real estate involves finding a piece of real estate (usually a foreclosure or distressed property that needs repair), placing it under contract with the seller, and then finding potential buyers to sell that contract to (ideally a cash buyer for quick sale).

Wholesalers make money from acquiring attractive wholesale real estate contracts that other investors pay a premium for. Wholesalers may charge a fee, known as an assignment fee, for their services acting as a middleman between sellers and buyers.

These types of real estate deals are quite appealing because almost anyone can get started with little to no money in most cases, and wholesalers don't need to repair a property as flippers do, as most of these real estate transactions are almost completely done via paper contracts.

How To Wholesale Real Estate In Minnesota (9 Steps)

As with any investment strategy, wholesaling houses isn’t always easy, but if you follow a tried-and-true formula, you’ll encounter better success. Wholesaling has become increasingly popular because these transactions can take place without having a real estate license or dealing with a realtor.

Additionally, unlike traditional real estate deals, wholesaling provides a clean exit strategy because you're not sitting on properties waiting on better market trends or waiting for the right buyer to come along. If you're interested in generating income in the real estate industry without being an actual real estate agent, then read these nine simple steps about how to become a successful wholesaler in Minnesota.

Be sure to check out our in-depth video showing you how to wholesale real estate step by step here:

*Before we begin our guide on how to wholesale real estate in Minnesota, 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!

With that in mind, here's our simple step by step process for wholesaling real estate in Minnesota:

1. Partner With A Wholesale Mentor
2. Learn Minnesota Real Estate Wholesaling Laws & Contracts
3. Understand The Minnesota 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

1.Partner With A Wholesale Mentor

It’s been said that behind every successful business operator, there is an educator. Therefore, in order to ace your wholesaling game, you should seek out the expertise, knowledge, and advice from a trustworthy wholesale mentor.

A mentor or coach can be invaluable in helping you understand the market value of properties, connect you with reputable lenders, real estate investors, and a mentor can even point you in the right direction for killer wholesale deals.

There are various ways you can find a wholesale mentor. The most effective way is to hit the internet and get involved with local real estate groups. Search social media networks and connect with a real estate broker, talk to agents, or reach out to people you gravitate to who are experienced in the world of real estate.

From meetup groups to local real estate associations - there are a variety of outlets where you can get in touch with experts in the industry. Once you find the right mentor for you, approach them and inquire if they are available to tutor you. In many cases, they will happily help and probably be flattered by your inquiry.

2. Learn Minnesota Real Estate Wholesaling Laws & Contracts

While you don’t have to have a real estate license to wholesale properties in Minnesota, you do have to be mindful of any state law that directly relates to your transactions. Ideally, you should seek help from your mentor or real estate attorney for legal advice so that you are in compliance and abiding by the legality and regulations set for by the state while conducting business.

As a wholesaler who is not a broker or doing business without a license, the most important thing to remember is this: You cannot sell or market the actual real property linked with your equitable interest. You may, however, market or sell your right to purchase real property as delineated in the purchase contract you present.

*For in-depth training on real estate investing, Real Estate Skills offers extensive courses to get you ready to make your first investment!Attend our FREE training and gain insider knowledge, expert strategies, and essential skills to make the most of every real estate opportunity that comes your way!

3. Understand The Minnesota Real Estate Market & Lingo

You can’t expect to succeed in wholesale real estate if you don’t understand the lingo or if you’re unfamiliar with the Minnesota real estate market. What’s more, there’s nothing worse than looking foolish or unprepared when you approach homeowners or investors because you don’t know the proper terms or don’t have a mind for the market. Educating yourself on the language and the “lay of the land” is crucial for earning trust and ultimately landing your sales. The good news is these details are easily learned.

Your mentor or real estate coach can be tremendously helpful in brushing you up on market trends and key terms in the industry. If you haven’t yet partnered with a mentor, you can get an informal education by researching online. Join social groups to help familiarize yourself with the terminology of the industry. You can also do research online to get a clear assessment of what the real estate market is doing in your area of Minnesota.

If you’re looking for another resource on the Minnesota real estate market, you can seek assistance from your local real estate association. For instance, join SPAAR, which is the Saint Paul Area Association of Realtors, if you are conducting business in this area. You may also want to join the Minnesota State Association of Realtors. These or any number of city, state, and county real estate organizations can help you understand the lingo and the market so you can land that all-coveted sale agreement or instill confidence in your clients.

Read Also: How To Wholesale With A Realtor: The (ULTIMATE) Guide

4. Build A Cash Buyers List

One of the keys to a successful wholesale real estate investing business is having a good list of cash buyers. A big reason for this is that transactions typically happen quickly, so that means you've got to have investor information fast and at your fingertips so you don't miss out on a killer deal.

Building your cash buyer list isn’t difficult, but it does require you to get clever. Think about the types of people who have access to cash or have the immediate capital to invest. Ideally, you may want to approach investors in the real estate industry. However, don’t discount other people, such as friends, family members, or associates, who are looking to make smart investments.

Also, think outside the box when it comes to getting contacts for your buyers' list. For instance, property auctions are a great place to find people who are ready (and eager) to buy purchase agreements. Property auctions typically last for short periods of time, so it's likely that bidders at these events will have cash on them. This makes it a perfect spot for building your list.

You might also approach companies that advertise slogans such as “We Want Your House and We Pay Cash.” Make sure they're not wholesalers before dealing with them. If they're not a wholesaler, they might be interested in your wholesale property contract and would then pay you cash for it.

Consider building a business website. yourself. This is a great way to “put your shingle out” and alert potential investors that you’re wholesaling and you’re ready to sell. Your website can also appeal to potential sellers who are looking for a fast solution to sell their homes. In this way, a website serves a dual purpose in that it can help you build your buyers list as well as help you attract motivated sellers.

The goal here is to talk to as many buyers as you possibly can. Asking questions will allow your list of potential cash buyers to grow, eventually leading to amazing opportunities for you!

You can also check out this video on how to find cash buyers!

5. Find Motivated Sellers & Distressed Properties

The process of tracking down motivated sellers and finding distressed properties is similar to building your cash buyers list. It requires you to be diligent and hunt in unique places to get your needed leads. For instance, do a search on Craigslist for homes for sale. Because this is a cheap way for homeowners to sell houses, the site often attracts low-quality, distressed homes - which is exactly what you’re looking for.

You can also go to real estate websites such as Zillow or Redfin. However, you likely won’t find a ton of distressed properties, as these sites charge homeowners for advertising their houses for sale. However, you can join a service that provides fresh batches of MLS daily so you can always be apprised of potential homes that meet your criteria. Additionally, you can subscribe to a service that provides foreclosure listings, which are ideal for wholesale real estate transactions.

When it comes to finding motivated sellers, you should be equally clever. A motivated seller is someone who, for whatever reason, needs to sell a home or property fast. Because they’re anxious to be rid of a property, they often aren’t focused on making a profit for themselves.

An example of a motivated seller might be a family member who inherited a run-down house on which back taxes are owed. If the heir to the home doesn’t have the hard money to pay the back taxes or repair the home - he or she may be highly motivated to sell, perhaps for as little as the back taxes owed, so that they can pay them off. In reality, most motivated sellers would be thrilled to work with you because, as a wholesaler, you can potentially relieve them of their property in a matter of days, so they never have to deal with it again.

Read Also: 25 Questions To Ask Motivated Sellers: Investor’s (ULTIMATE) Guide

6. Put Distressed Properties Under Contract

Ideally, you've done your homework and have built a cash buyer list and pounced on a seller who is motivated to sell their dilapidated rental, foreclosed property, or distressed home. The next step is to put the property purchase rights under contract with the seller.

Before putting a property under contract, it's essential to calculate integral figures that you'll present to the seller. The trick is finding the “sweet spot” price that will make them take your offer - without you losing any money in the process.

The MAO formula (Maximum Allowable Offer) can help you determine the best offer price and profit margin. To determine the MAO, take the property's ARV, minus any repairs or fixed costs, plus any equity or target profit that has been set. Add your service fee (also known as an assignment fee) from that number. The result will be your maximum allowable offer for the property.

To estimate these figures, you can start by researching the average price of homes in the surrounding area. Secondly, you'll need to figure out the average cost of materials at a hardware store or by getting estimates from contractors.

You can also consult with your mentor or a real estate agent to help you get the right MAO figure. Once you have all the figures and have calculated that golden number, build it into the purchase contract. Be sure to enlist the help of a real estate lawyer. They'll make sure that your contract is compliant and upholds Minnesota laws.

Read Also: Estimating Rehab Costs: (Ultimate) Investor's Guide

7. Assign The Contract To Cash Buyer

After making your purchase contract, your next step is to transfer the contract to a cash buyer. This is known as the “assignment of contract”. As a general rule, you should include your assignment fee within this contract so the seller pays you for your service.

There are several templates online that can help you draft an assignment contract. Whether you use a template or not, we recommend contacting your mentor or utilizing a real estate attorney to look over the contract to make sure it is legally binding and in compliance with Minnesota laws.

8. Close The Deal And Collect Your Assignment Fee

This is perhaps the easiest and arguably the best step for successful wholesaling.

The moment you’ve connected with a buyer and finalized the assignment contract with the buyer, it’s time to close your deal and collect your assignment fee.

9. Double Close Or Wholetail When Necessary

For any reason that you are unable to go the assignment contract route with a buyer, you might be able to land a deal using the double closing strategy or conducting a wholesale deal.

In a double closing, a wholesaler makes two separate transactions simultaneously. To explain, a wholesaler purchases a property outright and sells it to the end buyer at the same time - essentially double closing on two properties. This wholesale method is usually done on the same day.

This type of transaction appeals to wholesalers because it provides the advantage of buying low and selling high. The drawback is that you may have to submit all the cash for payment upfront at closing - including an earnest money deposit. You may also be required to pay closing costs which might eat into your gross profit. Nevertheless, a double-close can be very lucrative if you find the right property for the right price and connect it with the ideal buyer willing to pay a higher price.

Another strategy wholesalers can take is called Wholetailing. This is when you buy a property in distress and make some minor repairs to it. We’re not talking about a full "reno" - just enough upgrades to make the property passably appealing to an interested buyer. You will then market the amended property on MLS. Ideally, this will entice an investor who is willing to pay a higher price than what you’ve invested in the purchase price and minor repairs to the property.

In this scenario, you have some wiggle room in terms of flexibility and time to pounce on the right buyer to get a prime price. Moreover, the few improvements you’ve made on the property may result in a buyer qualifying for a mortgage - which can be very appealing to potential investors.

You can think of wholesaling as a cross between flipping and wholesaling. This is because you are investing in the property, sprucing it up a bit (as a flipper would - but not doing a total overhaul), and selling it to the end buyer as a wholesaler.

In either case, neither double closing nor wholetailing requires a license.

Is Wholesaling Real Estate Legal In Minnesota?

Yes, wholesaling real estate is legal in Minnesota. As long as a real estate wholesaler is not conducting business that is reserved for licensed real estate agents, it is totally legal to wholesale property in the state of Minnesota.

It is critical to remember that as a wholesaler, it is illegal to sell real property without a license. You can only market or sell the equitable interest in the property. That said, you may want to enlist the assistance of a real estate attorney - especially if you are a beginner - so that you can rest assured you are wholesaling to the letter of the state law.

Moreover, it is a good idea to familiarize yourself with Minnesota’s statute, Chapter 82, which covers regulations about real estate brokers and salespersons in the state.

How Much Do Real Estate Wholesalers Make In Minnesota?

Because wholesalers work for themselves, and their income is contingent upon how much effort they put into their wholesale endeavors - it’s hard to pinpoint an exact annual salary. However, there is definitely money to be made in wholesaling houses. According to a national survey, $83,000 is the national average income annual for real estate wholesalers. The same survey indicates that Minnesota state wholesalers average around $73,000 per year.

What’s exciting is the potential income you can stand to earn while wholesaling. In reality, you can earn unlimited income with wholesale real estate. It all depends on how many deals you close, multiplied by your average wholesale fee. For example, let’s say you close one deal per month at a $10,000 profit. Add that up over twelve months, and you’re looking at earning six figures per year!

Do You Need A License To Wholesale In Minnesota?

No. As mentioned, if you are marketing and/or selling only the equitable rights of a property, you do not need a license to wholesale in Minnesota.

However, you do need a license if you are listing, marketing, or selling actual real property.

Read Also: Can A Realtor Wholesale Property? The (ULTIMATE) Guide

Is Wholesaling In Minnesota Easy?

Nothing worthwhile is ever easy. Navigating the waters of wholesaling properties in Minnesota can be tricky, and it takes time to learn the nuances of the trade. However, with the help of a coach or mentor, you can significantly shorten the learning curve.

Furthermore, you can accelerate your success by accessing proven wholesaling training, such as what Real Estate Skills offers with our Pro Wholesaler VIP Program.

The Pro Wholesaler VIP Program is designed for the modern entrepreneur to learn the basics and how to help new real estate wholesalers avoid the pitfalls typically found by beginners. It is 100% online and is used for local and virtual real estate wholesaling.

This exclusive program gives you cutting-edge tips, tricks, and current information that positions you as a wholesaling pro in far less time than it would if you were learning the ropes on your own. Plus, as a Pro Wholesaler VIP member, you have all-access to a national community of seasoned real estate investors and professionals - right at your fingertips!

Final Thoughts On Wholesaling In Minnesota

If you relish the freedom and flexibility of working for yourself, wholesaling could be your ideal business venture. If you’re good with people, have a great sales technique, and are clever about finding information - wholesaling properties might also be right up your alley.

Lastly, if you don’t mind hustling a bit to earn the rewards of big financial payoffs, then this area of the real estate industry is definitely a worthwhile option for you. Ultimately, wholesaling real estate in Minnesota is a great way to earn income, make a difference in the community, and build a solid independent business.

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!