How To Wholesale Real Estate In North Dakota: Step By Step (2023)Jun 14, 2023
Real estate investors thrive in a healthy economy, and few markets boast as strong of fundamentals as North Dakota. In particular, the state’s employment rate and resilient economy appear perfectly capable of facilitating plenty of demand for local wholesalers.
At 2.1%, North Dakota is tied with New Hampshire for the third-lowest unemployment rate in the country. That, combined with years of pent-up demand, suggests now is a great time to learn how to wholesale real estate in North Dakota. As interest rates come down from their highs, demand will only increase, making the potential pool of buyers larger and more hungry for their new home purchase.
Would you like to explore wholesaling real estate in North Dakota? This comprehensive guide is designed to equip you with a thorough understanding of the wholesale process and the confidence to kickstart your career in The Peace Garden State. In doing so, we’ll teach you everything you need to know about wholesaling, including:
- What Is Wholesaling Real Estate?
- How To Wholesale Real Estate In North Dakota (9 Steps)
- Is Wholesaling Real Estate Legal In North Dakota?
- How Much Do Real Estate Wholesalers Make In North Dakota?
- Do You Need A License To Wholesale Real Estate In North Dakota?
- Is Wholesaling In North Dakota Easy?
- Final Thoughts On Wholesaling In North Dakota
What Is Wholesaling Real Estate?
At its core, wholesaling is an investment strategy in the real estate sector that has gained a well-deserved reputation for building wealth quickly. Wholesaling is characterized by its short-term nature, minimal capital requirements, and relatively low barriers to entry, making it an accessible starting point for individuals venturing into the world of real estate investing for the first time.
Digging deeper, wholesaling empowers opportunistic investors to bridge the gap between sellers and buyers, ultimately facilitating transactions that may have never happened. Acting as intermediaries, wholesalers secure the right to purchase a property at a discounted price and subsequently sell that right to an end buyer, typically other property flippers, for a profit. For what it’s worth, the term "wholesaling" aptly describes the role investors fill. It involves securing a purchase price below market value and giving it to a retailer (another investor) for a fair price.
Wholesalers typically do not purchase the investment property (with a few exceptions); they obtain the exclusive right to buy it. Once they have the legal permission, the wholesaler sells their contractual right to an end buyer, earning a fee. This arrangement ensures that the current property owner receives the agreed-upon sales price from the buyer, the end buyer secures their next property for renovation, and the wholesaler makes a profit from their involvement. In the end, it's a win-win scenario for all parties involved.
How To Wholesale Real Estate In North Dakota (9 Steps)
To be successful in real estate wholesaling, you need to develop a step-by-step process, then follow it consistently, fine-tuning along the way. Also, check out our in-depth video on how to wholesale step by step in 21 days or less!
With that in mind, lets dive into understanding how to wholesale real estate in North Dakota starting with the following the steps outlined below:
- Partner With A Wholesale Mentor
- Learn North Dakota Real Estate Wholesaling Laws & Contracts
- Understand The North Dakota Real Estate Market
- Build a Cash Buyers List
- Find Motivated Sellers & Distressed Properties
- Put Distressed Properties Under Contract
- Assign The Contract To The Cash Buyer
- Close Deal & Collect Assignment Fee
- Double Close Or Wholesale When Necessary
1. Partner With A Wholesale Mentor
While wholesaling is commonly viewed as a beginner strategy, investors are under no obligation to do it alone. Newcomers are strongly encouraged to enlist the guidance of a wholesale mentor. Investors can swiftly gain a competitive edge by partnering with an accomplished wholesaler. The invaluable knowledge and expertise of an experienced mentor can shape their entire career.
With the help of a mentor, novice investors can reduce risks, enhance efficiency, and increase their likelihood of success. The synergy of all three may provide the foundation new investors need to start on the right foot.
Most importantly, a mentor can give investors the confidence they need to start, which is invaluable. With helpful advice and a blueprint, taking the first step becomes much more manageable and represents a new beginning for those who have learned how to wholesale real estate in North Dakota. If for nothing else, wholesaling’s potential can’t be unlocked if it’s never attempted.
2. Learn North Dakota Real Estate Wholesaling Laws & Contracts
To wholesale successfully, investors must familiarize themselves with local wholesaling and contract laws. For the most up-to-date information, investors should pay close attention to the following resources:
- North Dakota Real Estate Commission: As the official website of the North Dakota Real Estate Commission, this site will give wholesalers statewide insight into real estate laws, regulations, and licensing requirements.
- North Dakota Century Code: This site officially compiles North Dakota laws. Title 47 refers to real property and includes rules regulating wholesaling.
- North Dakota Association Of Realtors: North Dakota Realtors (and real estate agents) have boots on the ground and know the laws regulating their entire industry, including wholesaling laws.
- Local Real Estate Attorneys: If wholesalers have inquiries regarding wholesaling laws, they should seek guidance from a qualified real estate attorney in North Dakota.
It is crucial to remain updated on evolving North Dakota real estate wholesaling laws, as they are subject to change at a moment’s notice. Seek professional legal counsel to guarantee compliance with North Dakota's regulations about wholesaling.
3. Understand The North Dakota Real Estate Market
Learn about the North Dakota real estate market by retaining the most recent data from the trusted sites listed below:
- Zillow Housing Data Research
- Zillow’s North Dakota Market Overview
- North Dakota Association Of Realtors Market Data
- Realtor.com’s North Dakota Market Overview
- ATTOM Data Solutions’ North Dakota Real Estate & Property Data
- SoFi’s State Foreclosure Data
- U.S. Census Bureau’s North Dakota Data
- Bureau Of Labor Statistics’ North Dakota Economic Data
4. Build A Cash Buyers List
A cash buyers list is a wholesaler’s best friend. With a list of prequalified buyers lined up and ready to go, wholesalers can dramatically reduce the time it takes to complete a deal. That said, having a buyers list and building one are two separate topics. Investors must first create one to take advantage of the benefits offered by a buyer list.
Building a reliable buyers list is a challenging task for wholesalers. They must establish and nurture a network of trustworthy contacts. There are, however, specific strategies that make the job easier. Effective buyers list creation methods include, but are not limited to, the following:
- Implement an email marketing campaign to engage a broad audience.
- Distribute business cards when networking to communicate intentions.
- Generate leads through a compelling website and call to action.
- Capture buyer leads with well-placed bandit signs.
- Find buyers through online portals like Craigslist.
- Attend networking events and tradeshows to seek out active buyers.
- Launch a direct mail campaign to target potential buyers.
- Use today’s most popular social media platforms to gain exposure.
You can also check out this video on how to find cash buyers!
5. Find Motivated Sellers & Distressed Properties
To wholesale properties, investors need to locate motivated sellers, particularly those who are distressed and at risk of foreclosure. While numerous strategies exist for finding potential deals that meet their criteria, those learning how to wholesale real estate in North Dakota should attempt the following:
- Tap into the expertise of local real estate agents and Realtors who possess the market knowledge investors need.
- Utilize the Multiple Listing Service (MLS) through a real estate license or by collaborating with a real estate agent.
- Participate in foreclosure auctions organized by banking institutions to access off-market homes.
- Visit the local Recorder's Office to identify North Dakota properties at risk of foreclosure.
- Implement a targeted direct mail campaign to connect with homeowners in specific areas.
- Explore neighborhoods by driving around and identifying neglected properties.
6. Put Distressed Properties Under Contract
Once investors identify a homeowner willing to collaborate at a mutually agreeable price, investors should move to get the terms in writing. Specifically, investors will sign a real estate contract with the homeowner, granting them exclusive rights to purchase the property, thereby preventing others from acquiring it.
That’s important to note; investors aren’t signing a contract to buy the home; they are signing a contract to maintain the rights to buy it. That way, any transaction with the subject property must go through the investor.
7. Assign The Contract To The Cash Buyer
After obtaining the seller's signature on a purchase agreement, investors must find a buyer to sell their newly acquired rights to. If investors have already created a cash buyers list, all that’s needed is to choose a buyer to assign the contract to. If no list exists, investors must find a buyer within the time allotted to them in the existing contract.
Once a suitable buyer is identified, the next course of action is to obtain their signature on an Assignment of Contract agreement. This legal document enables investors to transfer their purchase contract to the buyer, effectively transferring the rights and obligations outlined in the initial contract to the end buyer.
8. Close Deal & Collect Assignment Fee
Once all parties have agreed and signed the necessary documents, it is time to finalize the deal and receive the assignment fee. The fee varies depending on individual factors, but most investors charge between 5% and 10% of the property's sales price. Some investors are more comfortable requesting a flat fee, frequently asking for somewhere in the neighborhood of $10,000 to $15,000.
The calculation of the assignment fee can and will vary. Still, it ultimately relies on the investor's negotiation skills and ability to convince the end buyer what their services are worth.
9. Double Close Or Wholesale When Necessary
Some homeowners may be uncomfortable with investors assigning contracts to an unfamiliar buyer. As a result, wholesalers must implement a different wholesale strategy: the double close. With a double close, wholesalers purchase the property and resell it shortly afterward, hence the term "double close." This approach involves completing two separate real estate transactions: one with the original seller and another with the final buyer.
Most wholesalers would prefer to assign the contract because the process is more straightforward, less involved, and requires little to no capital. Double closings, on the other hand, come complete with all the nuances of a traditional real estate deal: a lender, closing costs, legality compliance, real estate financing, and everything else. However, investors may need to exercise a double close to facilitate a deal for reasons not always in their control.
Is Wholesaling Real Estate Legal In North Dakota?
Wholesaling real estate in North Dakota is legal and has proven to be a highly profitable career for many investors who have worked within the confines of local law. The key lies in wholesaling while maintaining transparency and integrity, and this requires investors to disclose their intention of acquiring an equitable interest in the property rather than the property itself when entering into a bilateral contract with the seller. Additionally, investors must include a "proof of funds letter" and act as the principal buyer who sells the contract to an end buyer.
Wholesaling deals involve various intricacies, and investors need to seek guidance from a qualified real estate attorney to ensure compliance with the laws in their specific markets when engaging in wholesaling activities.
How Much Do Real Estate Wholesalers Make In North Dakota?
The earnings potential of a wholesaler in North Dakota is directly correlated to several specific factors, such as their personal experience, prevailing market conditions, the sale price of the property, and the amount the end buyer is willing to pay for assuming the contract. As a result, there is yet to be a definitive answer to how much wholesalers make in North Dakota.
That said, it’s possible to estimate how much the average wholesaler can make on a deal if we assume wholesale fees can cost end buyers anywhere from 5% – 10% of the total property price. Therefore, if the median home value in North Dakota is about $244,741, according to Zillow, a 5% wholesale fee would net investors approximately $12,237.05.
Please note that the previous figure is simply an approximation of the potential earnings a wholesaler may receive by charging a 5% fee based on the median home value in the state. The actual amount can vary, either higher or lower, depending on the specific circumstances and factors mentioned earlier.
Do You Need A License To Wholesale Real Estate In North Dakota?
Wholesaling real estate in North Dakota does not require a license.
However, investors with a real estate license must disclose their status as licensed professionals and their role as an intermediary in the wholesale deal. While there is no legal obligation to have a license for wholesaling in North Dakota, transparency is necessary for compliance with local regulations.
Is Wholesaling In North Dakota Easy?
The ease of wholesaling in North Dakota is subjective. While it may be considered “easier” than other real estate strategies, it still requires knowledge of laws and regulations, strong relationships, negotiation skills, and a mind for due diligence.
Assuming it is easy can undermine expertise and pose unnecessary risks. That said, assuming deals will come easy is wreckless. Investors still need to work hard; only then does wholesaling become less complicated.
Here at Real Estate Skills, we offer the Pro Wholesaler VIP Program, a world-class program that has seen thousands of beginners learn the business and make a lot of money along the way.
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.
Final Thoughts On Wholesaling In North Dakota
Learning how to wholesale real estate in North Dakota can offer great opportunities in the current market. Nonetheless, success is not guaranteed, so aspiring wholesalers should prioritize diligence and follow the nine steps in this guide for a competitive advantage.
At Real Estate Skills, our team of experts is ready to provide you with the tools you need for wholesaling houses in North Dakota. We're committed to providing the knowledge, resources, and support you need to successfully navigate a North Dakota wholesale. So avoid common mistakes and maximize your returns by leveraging our expertise